Judgement from the European Court of Justice on the “Rato Act”

6 May 2008

The European Court of Justice has declared a measure adopted by the Spanish State in 1999 to be illegal, which in its time required all foreign public companies, participating more than 3% in any Spanish company from the energy sector, to request authorization from the Council of Ministers to be allowed to exercise the right to vote, thus obliging Spain to modify its internal legislation.

Following the modification in December 2003 by the Spanish parliament of the aforementioned regulation, the European court considered, at the request of the Commission, this reform to be insufficient and that the State still maintained a controlling position on these companies.

As a result, the Court gave judgement for the case in question on February 14, indicating that this measure was still restricting the free circulation of capital, one of the cornerstones of the European Union.

In this manner, the Spanish State must definitively amend these irregularities in order to respect EU legality.

For further information, please contact Werner Jahnel: wjahnel@mmmm.es