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Abuse of law and Case C-212/97

By Bartolus

Dr. Wolf-Georg Ringe of Oxford University, England, has written an interesting article entitled "Sparking regulatory competition in European Company Law: The impact of the Centros line of case-law and its concept of 'abuse of law'".

The article traces the impact of the judgment of the Court of Justice in Case C-212/97 Centros Ltd v. Erhvervs- og Selskabsstyrelsen and its progeny. Here's what the abstract states:

The case-law of the European Court of Justice in the field of company law has repeatedly touched on the question of abuse, most notably in the situation where a company was set up in a Member State only to do business exclusively in another. Starting with the landmark case of Centros in 1999, the Court has repeatedly stressed that it employs a liberal approach towards abuse in this field. According to the Court, making use of the disparities of different legal standards when setting up a company is not abuse, but explicit use of the freedom of establishment.
This paper analyses the Court?s approach towards abusive behaviour in company law and assesses the impact that the leading cases since 1999 have had both on business behaviour in the EU and on the national law-makers who have responded to the opening of the markets. It is shown that the Court has provoked a sizeable entrepreneurial migration from various countries towards the UK. This in turn has led to regulatory competition, in that other Member States in continental Europe have been forced to adapt their company law to make it more attractive for businesses.
It is argued that at least so far, the (limited) competition between Member States has been beneficial and has reduced both registration time and costs. Questions remain as to the relevance of any comparison with the United States and the future developments for corporate re-incorporations.

You can download it here.

Full post as published by EU Law Blog on January 21, 2009 (boomark / email).