Protection of the right to redemption of shares of banking company reorganized by merger – internal rules and European case law
Protection of the right to redemption of shares of banking company reorganized by merger – internal rules and European case law

Author(s): Andreea Corina Tarsia
Subject(s): Law, Constitution, Jurisprudence, Law on Economics, EU-Legislation, Commercial Law
Published by: Societatea de Stiinte Juridice si Administrative
Keywords: shares; good; protection of assets; right of withdrawal; general interest of the bank; ECHR; CURIA;
Summary/Abstract: The exercise of the right protected by art. 1 of Protocol no. 1 of the European Convention on Human Rights does not only depend on the obligation of the State not to interfere, but may require positive protective measures, especially when there is a direct link between the measures that the complainant can legitimately expect from authorities and the right to an effective observance of its "assets". Although art. 1 of Protocol no. 1 does not contain explicit procedural requirements, the Strasbourg Court has ruled that states have an obligation to provide judicial proceedings that can offer the necessary procedural guarantees and therefore allow local courts to rule effectively and equitably on any litigation between persons, both in cases involving state authorities and in cases involving only private parties. On the other hand, the European Court of justice has ruled that, in other circumstances, the right of withdrawal of shareholders in the event of a merger of the banking company may be limited on grounds of public interest, invoked in the context in which, banks or small groups of banks are not able to cope with, without excessive difficulties, for example in the case of financial deposits imposed by the newly established system of the European Banking Union. These situations highlight the serious shortcomings in resolving reimbursement of shares disputes, as they may raise the issue of reconciliation between shareholders' rights, based on Article 1 of the Protocol, and the general interest in consolidating the capital of the banking system and the need to maintain bank’s stability.

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