Case C‑546/18

FN and Others

v

Übernahmekommission

(Request for a preliminary ruling from the Bundesverwaltungsgericht)

Judgment of the Court (Fourth Chamber), 9 September 2021

(Reference for a preliminary ruling – Company law – Takeover bids – Directive 2004/25/EC – Article 5 – Mandatory bid – Article 4 – Supervisory authority – Final decision making a finding of infringement of the obligation to make a takeover bid – Binding effect of that decision in subsequent proceedings for an administrative sanction initiated by the same authority – EU law principle of effectiveness – General principles of EU law – Rights of the defence – Charter of Fundamental Rights of the European Union – Articles 47 and 48 – Right to silence – Presumption of innocence – Access to an independent and impartial tribunal)

Freedom of establishment – Companies – Directive 2004/25 – Takeover bids – Supervisory authority – Sanctions – Final decision making a finding of infringement of the obligation to make a takeover bid – Binding effect of that decision in subsequent proceedings for an administrative sanction initiated by the same authority – Parties to those proceedings not having been able, in the earlier proceedings for a finding of infringement, to exercise the rights of the defence or the right to silence, and not having had the benefit of the presumption of innocence – Parties unable to exercise the right to an effective judicial remedy against that decision in proceedings before a court or tribunal exercising unlimited jurisdiction – Unlawful

(Charter of Fundamental Rights of the European Union, Arts 47 and 48; European Parliament and Council Directive 2004/25, Arts 4 and 17)

(see paragraphs 58-62, 70, 71, operative part)

Résumé

By decision of 22 November 2016, the Übernahmekommission (Takeover Commission, Austria; ‘the Takeover Commission’) determined that GM, a natural person, and four companies had acted in concert so as to incite another company to enter into a transaction that led to a significant increase in the holding of its principal shareholder. On the basis that the parties in question held a controlling interest, within the meaning of the Austrian legislation transposing Directive 2004/25, ( 1 ) in the company concerned, the Takeover Commission held that they should have made a takeover bid.

After that decision had become final, the Takeover Commission initiated proceedings for the imposition of administrative sanctions against GM and two other natural persons, HL and FN, the latter two in their respective capacities as board member and director of two of the companies to which the decision of 22 November 2016 related.

By decisions of 29 January 2018, the Takeover Commission imposed administrative sanctions on GM, HL and FN on the basis, amongst other things, of the findings of fact set out in the decision of 22 November 2016.

The Bundesverwaltungsgericht (Federal Administrative Court, Austria), before which actions against the decisions of 29 January 2018 have been brought, is in doubt as to the compatibility with EU law of the national administrative practice followed by the Takeover Commission. Under Austrian law, a decision making a finding of infringement, such as the decision of 22 November 2016, once final, is binding not only on the authority which made it, but also on other administrative and judicial authorities which may have cause to rule, in other proceedings, on the same factual and legal situation, provided that the parties concerned are the same.

As regards HL and FN, the Federal Administrative Court doubts that this condition is met, given that they were not ‘parties’ to the proceedings in which the finding of infringement was made, but simply acted as representatives of two of the companies which were parties to those proceedings. Nevertheless, it states, in the proceedings for an administrative sanction the Takeover Commission treated the decision of 22 November 2016 as having binding effect as regards HL and FN. As HL and FN were not ‘parties’ to the proceedings for a finding of infringement, they did not have the benefit of all the procedural rights of a ‘party’, including the right to silence.

By its questions, the Federal Administrative Court asks, essentially, whether Articles 4 and 17 of Directive 2004/25, read in the light of the rights of the defence guaranteed by EU law, in particular the right to be heard, and of Articles 47 and 48 of the Charter of Fundamental Rights of the European Union, preclude a national practice such as that followed in the present case by the Takeover Commission.

Findings of the Court

As Directive 2004/25 does not lay down rules governing the effect that final administrative decisions adopted pursuant to that directive are to have in subsequent proceedings, the rules at issue in the main proceedings are within the procedural autonomy of the Member States, subject to compliance with the principles of equivalence and effectiveness. Thus, Directive 2004/25 does not, in principle, prevent the Member States from establishing an administrative procedure divided into two separate stages, as in the present case, or a practice under which binding effect is given, in subsequent proceedings, to administrative decisions which have become final. Indeed, such a practice may help to ensure the efficiency of administrative proceedings for a finding of failure to comply with the rules of Directive 2004/25, and for the imposition of a sanction in respect of such a failure, and thus to ensure the useful effect of that directive. However, the rights of the parties as guaranteed by EU law, and in particular by the Charter of Fundamental Rights, must be respected at both of those procedural stages.

As regards persons who, like GM, were parties to the proceedings which led to the adoption of a decision making a finding of infringement, it is permissible for the Member States to give binding effect to such a decision in subsequent proceedings for the imposition of an administrative sanction on those persons in respect of that infringement, provided that they were able to exercise their fundamental rights, such as the rights of the defence, the right to silence and the presumption of innocence, in the proceedings for a finding of infringement.

In contrast, having regard to the subjective nature of the rights of the defence, the same does not apply to persons who, like HL and FN, were not parties to the proceedings for a finding of infringement, even if those persons acted as members of a representative organ of a legal person which was a party to those proceedings. Accordingly, in proceedings for the imposition of an administrative sanction on a natural person, the administrative authority must disregard the binding effect which attaches to the assessments made in a decision the infringement of which that person is accused and which has become final, without the person concerned having had the opportunity to challenge those assessments, in his or her personal capacity, in the exercise of his or her own rights of the defence. Similarly, the right to silence precludes a situation in which such a person is deprived of that right in relation to factual matters which are subsequently to be used in support of the allegation and will therefore have an impact on the sentence or the sanction imposed. Furthermore, the presumption of innocence precludes a situation in which a natural person is held liable, in proceedings for an administrative sanction, for an infringement found to have been committed in a decision which has become final without that person having had the opportunity to challenge it, and which can no longer be challenged by that person, in the exercise of his or her right to an effective remedy, before an independent and impartial tribunal with jurisdiction to rule on issues of both law and fact. The benefit of the right to an effective judicial remedy must be available to all parties to the proceedings for an administrative sanction, whether or not they were parties to the earlier proceedings for a finding of infringement.

( 1 ) Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids (OJ 2004 L 142, p. 12).