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All in One Star and EU Branch: up to the ECJ

16. October 2020

In the All in One Star case, Advocate General Szpunar delivered his Opinion on the free movement of commercial establishment and the establishment of a branch in another EU Member State. Our law firm Meyer-Dulheuer achieved considerable interim success in this case.

EU Zweigniederlassung

The German Federal Supreme Court (BGH) had submitted a reference to the European Court of Justice (ECJ) for a preliminary ruling, the reply to which ultimately determines the host Member State’s room for manoeuvre in cases where a branch is to be established in another EU Member State. This week, Advocate General Szpunar delivered his Opinion on this question.

In particular, the question referred by the BGH was aimed at German law, according to which the managing director of a company from another Member State is obliged to give an assurance that there is no obstacle to his appointment and that he has been informed in this respect by, inter alia, a notary of his unlimited duty to provide information to the court of registration.

The Background

All in One Star Ltd. is a private company limited by shares, registered in the United Kingdom (UK), with its registered office in the UK and registered in the English Commercial Register since 2013. In 2014, All in One Star Ltd. applied to the local court of Frankfurt am Main (Germany) for registration of a branch office in the commercial register, but without success.

In accordance with the German Commercial Law (§ 13g para. 3 HGB), the registration of such a branch office requires that the managing director of the company assures at the time of registration that there are no personal obstacles to the appointment of the managing director. Above all, however, he must also affirm that he has been informed of his unlimited duty to provide information to the court by a notary, a representative of a comparable legal advisory profession or a consular officer.

However, All in One Star Ltd. did not comply with that requirement, the Registry Office found and rejected the registration.

BGH referred a question to the ECJ

The case was continued before the OLG Frankfurt and the BGH. In the opinion of the BGH, however, the decision in this dispute depends on the interpretation of Art. 30 of the EU Directive 2017/1132 and Art. 49 and 54 TFEU (Treaty on the Functioning of the European Union (TFEU)). This is because, in the opinion of the BGH, the obligation to provide the insurance pursuant to § 13g (2) Sentence 2 HGB (in conjunction with § 8 Paragraph 3 GmbHG) would be contrary to the Directive if it were to fall within the scope of EU Directive 2017/1132.

The question referred to the ECJ is therefore:

Does Article 30 of EU Directive 2017/1132 preclude national legislation – such as German § 13g(3) HGB in the present case – or do Articles 49 and 54 TFEU preclude such national legislation?

Advocate General follows the reasoning of our law firm

Advocate General Szpunar in his Opinion recommends an interpretation that the obligations under EU Directive 2017/1132 do not constitute an “obligation to disclose” within the meaning of Article 30 of that directive. Articles 49 and 54 TFEU, in turn, do, admittedly, legitimately lead to the obligation of an assurance by the managing director that there are no obstacles to his appointment. However, the Advocate General decided that Articles 49 and 54 TFEU do not justify further obligations to involve a notary, even as an obligation subject to penalties.

The Advocate General was thus in line with the arguments of the plaintiff All in One Star. Our law firm Meyer-Dulheuer, which has been advising All in One Star and are giving legal assistence since 2013, thus achieved a considerable interim success.

If the ECJ were to follow the Advocate General’s opinion, this would have far-reaching consequences with regard to the free movement of the commercial establishment and the establishment of a branch in another EU Member State. In Germany in particular, the establishment of a branch office would then be significantly simplified, as § 13g (3) HGB in its previous version would no longer apply.

Our attorneys-at-law and patent attorneys have many years of expertise in the entire field of intellectual property and in commercial and competition law.
We are entitled to represent you before any court – in Germany and internationally.
Please contact us if you are interested.


 

 

Sources:

Opinion of Advocate General “All in One Star”, EU:C:2020:822,

Image:

geralt | pixabay.com | CCO License

 

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Category iconNews from our law firm Tag iconBGH,  ECJ,  Advocate General,  GA,  Articles 49 and 54 TFEU,  freedom of establishment,  branch office,  EU branch office,  freedom of movement of commercial establishment,  § 13g (3) HGB,  All in One Star,  Kanzlei Meyer-Dulheuer,  Meyer-Dulheuer

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