Acta Jure Gestionis as Restrictions on Free Movement of Capital under EU Law

What is it about?

The aim was to demonstrate the potential of certain acta jure gestionis to restrict the free movement of capital by way of establishing so-called “golden shares” (i.e. special rights). To that end, a Montenegrin case study is used, since it conveniently displays that privatization contract and subsequent shareholder’s agreement–typically jure gestionis acts – were utilized to perpetuate a state's influence over a privatized company in a manner equally efficient as that of certain jure imperii acts, which were found more than once by the CJEU to represent impermissible restrictions on the free movement of capital. Finally, arguments were offered and conclusion was made that the CJEU should essentially adopt the same approach with regard to each of the two types of legal instruments regularly utilized by states to secure their influence over privatized companies, meaning that both should be regarded as potential restrictions under the concept of vertical direct effect of EU law.

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Why is it important?

This article delineates between jure gestionis acts and purely private law instruments, which are understood as legal instruments created exclusively by private parties. Based on vertical direct effect of EU law on acta jure gestionis that was established in the past by the CJEU (e.g. M. H. Marshall v. Southampton and South-West...(1986)), the article essentially proposes equal treatment of jure gestionis acts and jure imperii acts by the CJEU in terms of freedom of capital movement provisions. To that end, a case study is presented and arguments are offered that the emphasis should be on the existence of the restrictive effect, its type and intensity, and not on differentiating between the public and private nature of legal instruments created by states and other public authorities in the privatization context.