## Facts

- Dionysios Diamantis was a shareholder of Plastika Kavalas AE (PK), a Greek company placed into a special restructuring regime under Greek Law 1386/1983 and administered provisionally by a public restructuring body (OAE).
- During restructuring, OAE carried out multiple capital operations, including increases and reductions of share capital, including an increase through new share issuance and later measures that further altered PK’s capital structure.
- Shareholders were granted pre-emptive rights for at least one capital increase, but no shareholder (including Diamantis) exercised those rights; OAE consequently acquired a majority shareholding.
- After additional changes and transfers of control, another company eventually acquired a majority interest in PK.
- Years after the capital operations, Diamantis brought an action in Greece seeking a declaration that certain capital increases and reductions were invalid because they were not decided by the general meeting, allegedly violating EU company-law rules requiring general-meeting approval for capital increases and protecting pre-emptive rights.
- The defendants argued that, even if EU rules were breached, Diamantis’s reliance on them was an abuse of rights under a national civil-code doctrine, citing his earlier support for the restructuring regime, his non-exercise of pre-emptive rights, and his delay in suing amid intervening corporate actions.
- The national court referred questions to the Court of Justice on whether EU law permits applying a national abuse-of-rights rule to rights asserted under the relevant EU directive and, if so, whether the cited circumstances could justify finding abuse.

## Issues

1. Whether EU law allows a national court to apply a domestic abuse-of-rights doctrine to assess whether an EU-law right is being exercised abusively, provided EU law’s effectiveness and uniformity are preserved.
2. Whether a shareholder’s invocation of the EU requirement that capital increases be decided by the general meeting may be treated as abusive solely because the shareholder is a minority, benefited from restructuring, did not exercise pre-emptive rights, supported entry into the restructuring regime, and/or delayed bringing suit.

## Decision

- The Court held that EU law does not bar national courts from applying a national prohibition on abuse of rights to EU-law-based claims, so long as application does not impair the full effect and uniform application of EU law.
- The Court held that a shareholder cannot be found to abuse the EU-law right at issue solely on the grounds that the shareholder is a minority, benefited from restructuring, failed to exercise pre-emptive rights, supported the company’s entry into the restructuring regime, or waited years before filing suit.
- The Court left it to the national court to decide, under these constraints, whether abuse was established on the full facts.

## Legal Principles

- EU law rights may not be relied upon for abusive or fraudulent ends; national courts may police abuse when EU-law rights are invoked.
- National abuse-of-rights rules may be applied to EU-law claims only if they do not prejudice the full effect and uniform application of EU law or effectively neutralize EU-law rights.
- Where an EU directive does not prescribe sanctions for breach, Member States retain discretion over consequences, subject to effectiveness and equivalence, and subject to safeguarding EU-law rights.
- In the context of shareholder protections governing capital increases and pre-emptive rights, minority status, incidental benefit from restructuring, non-exercise of pre-emptive rights, prior support for restructuring measures, and mere passage of time (absent applicable limiting rules) do not, without more, establish abuse.

## Conclusion

The Court of Justice confirmed that national courts may apply domestic abuse-of-rights doctrines to claims based on EU company-law rights, but it restricted that doctrine’s use by holding that the specified factors—minority status, benefits from restructuring, failure to exercise pre-emptive rights, participation in placing the company under a restructuring regime, and delay in suing—cannot alone justify denying enforcement of the EU-law requirement that capital increases be decided by the general meeting.


Diamantis v. Elliniko Dimosio (Greek State), Case C-373/97 (C.J.E.U. 2000)