Information Note on the Court’s case-law 187

July 2015

Bolla and Others v. Italy  (dec.) - 44127/09

Decision 19.5.2015 [Section IV]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Peaceful enjoyment of possessions

Transposition of European directive likely to entail significant changes in management of certain companies: inadmissible

Facts – The five applicants were all members of the same family. They were also all members of the Board of Management of the Erogasmet Group – which included the company Erogasmet Holding (the sixth applicant) – which operates in the natural gas sector. Erogasmet is a “vertically integrated company”, as the Group, whi ch is directed by the applicant holding company, caters for the supply, transport, distribution and storage of natural gas. The European Union adopted its Directi ve 2003/55/E C* in June 2003, requiring the manager of the transport network to be independent, at least as regards its legal form, organisation and decision-making procedure, from other activities unrelated to transport in vertically integrated companies. The Directive was transposed into domestic law via the Integral Text on Unbundling (“TIU”), which laid down a number of subjective and objective incompatibilities as regards those who could be members of the independent body managing activities subject to separation.

The applicants lodged an appeal with the regional administrative court. They submitted that as a result of the incompatibilities laid down in the TIU and the family relationships between them, some of them might have to stand down from their du ties as directors in the companies belonging to the Erogasmet Group, putting an end to their career opportunities in those companies. For its part, the applicant holding would no longer be allowed to appoint members of the independent managing body or pers ons related to them by blood or marriage as managers of the companies in which they were majority shareholders. They submitted that this would render the body’s supervisory powers purely illusory. It could force the holding to sell its shares, which would result in the separate ownership of the holding company and the companies it controlled.

Law – Article 1 of Protocol No. 1: It was unnecessary to assess whether an incompatibilities regime applicable to members of the supervisory bodies operating within a company could amount to interference in the rights of that company or of its directors and employees to respect for their property as, even if that was the case and Article 1 of Protocol No. 1 was applicable to the present case, the complaint was neverthel ess inadmissible, for the reasons set out below.

It was not contested that the impugned incompatibilities regime had an adequate legal basis in Italian law, namely the TIU. Moreover, as recommended by Directive 2003/55/EC, it pursued the public-interest ai m of ensuring the independence of the agency managing the transport network. The State had a wide margin of appreciation in both deciding on the practical arrangements and assessing whether their consequences were legitimated, in the public interest, by th e pursuit of the aim of the law in question.

The “subjective” and “objective” incompatibilities laid down in the TIU did not appear arbitrary or unjustified. They were mainly designed to prevent a member of the independent management body recommended by Di rective 2003/55/EC from being in a potential situation of conflict of interest by reason of family relationships, his or her position in the vertically integrated company or economic interests. The fact that Italy had gone beyond the demands of European Un ion law and that other States had introduced a less strict regime could not by itself give rise to a violation of Article 1 of Protocol No. 1.

Moreover, the incompatibilities introduced could, by their very nature, require a restructuring of the organisational chart within the company in question. That did not, however, mean that the obligation on some of the managers to renounce certain posts or to discharge specific duties necessarily imposed an individual and excessive burden. The same applied to the possible requirement on the company to appoint new managers and to bear the associated expenses.

Finally, the applicant holding company had had am ple time to apply to the administrative courts, which had conducted an assessment of the proportionality of the impugned measures, including the incompatibilities regime. Furthermore, the regional administrative court had nullified certain provisions of th e TIU. There was nothing in any of the aforementioned proceedings to indicate that the applicant holding company had been deprived of the opportunity to argue its case before the competent courts.

Under these circumstances, even assuming that Article 1 of Protocol No. 1 was applicable in the present case, there was no appearance of a violation of that provision.

Conclusion : inadmissible (manifestly ill-founded).

Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1: The concept of “vertically integrated company” by definition covered companies which, like the Erogasmet Group, were characterised by their combination of the activities of gas s upply and distribution. By the very nature of things, the requirement to set up a body responsible for managing a transport network independent from the other activities unrelated to transport, and to establish an incompatibilities regime in order to ensur e the effectiveness of such independence was likely to apply only to companies of that kind. Vertically integrated companies were therefore not in a comparable situation to other operators in the gas sector.

Conclusion : inadmissible (manifestly ill-founded ).

*Directive 2003/55/EC  of the European Parliament and the European Council of 26 June 2003 concerning common rules for the single market in natural gas, abrogating Directive 98/30/EC.

© Council of Europe/European Court of Human Rights This summary by t he Registry does not bind the Court.

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