THE EFFECT OF SECTION 9 OF THE EUROPEAN COMMUNITIES ACT 1972 ON ENGLISH COMPANY LAW
| Author | D. G. Powles,J. H. Farrar |
| Published date | 01 May 1973 |
| Date | 01 May 1973 |
| DOI | http://doi.org/10.1111/j.1468-2230.1973.tb01367.x |
THE EFFECT
OF
SECTION
9
OF
THE
EUJXOPEAN COMMUNITIES ACT
1972
ON
ENGLISH COMPANY
LAW
SECTION
9
of the European Communities Act
1072,
which came
into force on January
1,
1973
makes some drastic changes to the
ultra
vires
doctrine, the
so
called rule in
Royal
British
Bank
v.
Turquand,2
the rules on pre-incorporation contracts, and on the
registration and publication of corporate inf~rmation.~ Although
some of the provisions reflect recommendations of the Jenkins
Committee's Report the immediate impetus has been the imple-
mentation
of
the First Directive of the Council
of
the European
Economic Community (the
"EEC
'7,s
issued March
9,
1968,
the
object of which was the harmonisation of the national safeguards
required of companies and firms6
so
as to protect both members
and third parties.'
In its terms the Directive represents a compromise between the
views of German lawyers who wished the
EEC
to follow the
precedent of their own law and abandon the principle
of
specialitk
statutaire
(which corresponds to the
ultra vires
doctrine) and those
of
other Member States whose laws still imposed some such limita-
tions on the powers of companies.8
1
i.e.
the date of entry; see
8.
9 (9).
(1856) 6
El.
&
BI.
327.
See Gower,
Modern Company
Law,
3rd
ed. p.
160
et
seq.,
for
a modern statement of the rules.
In addition
8.
9 (7)
specifies details which must appear on letter headings and
order forms.
5
68/151/EEC;
see generally Professor
W.
Fikentscher and
llr.
B.
Grossfeld;
"
The proposed Directive on Company Law
":
(1964-65) 2
C.M.L.Rev.
259.
(based on the first draft): Hugh
J.
Ault:
"
Harmonisation of Company Law
in the EEC
";
(1968)
20
Hastings
L.J.
77;
P.
Van Ommeslaghe;
"
La
Premiere Directive du conseil
du
9
Mars
1968
en matiere de RociEtCR
I1
"
1909
Cahiers de Droit EuropPen
619:
and
J.
A.
Emlyn Ihvies
'*
Company Law and
the Common Market: the first step," in
An
Introduction
to
the
Law
of
the
EEG,
Ed.
B.
A.
Wortley, p.
32.
6
See Treaty
of
Rome,
Art.
58.
The Act applies
to
all companies defined by the
Companies Act
1948,
8.
455;
see
8.
9
(8).
See the preamble
to
the Directive.
S.
3
(2)
of
the Act requires the Engli~h
Courts
to
take judicial notice of
(inter
aha)
the Treaties and Officinl Journal
of
t,he Communities. Since the Directive ha8 been published in the Official
Journal (OJ
No.
Ii65
of March
14, 1968,
p.
8),
it ie therefore admissible as
evidence in construing
8.
9.
Under Art.
189
of the Treaty
of
Rome,
R
Directive
is binding
upon
oach Member State to which it is addreseed, but leaves to the
national authorities the choice
of
form
and methods
for
its implementation. It
has, however, recently been held by the European Court that an EEC Instru-
ment must he judged by its substance rather than its form,
end
provisions con-
tained in an instrument labelled n Directive might be capable of taking direct
effect in the same way as if they were contained in a Regulation. See
Trans-
ports
Lesage
v.
Hauptzollamt
Freiburg
(1971) 10
C.M.L.R.
1.
8
See
hilt
op.
cit.,
pp.
106-109.
E.
Stein:
The
Harmonisation
of
European
Company
Lam,
p.
289
et
seq.
4
Cmnd.
1749
para.
42.
270
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