## Facts

- La Comercial Internacional de Alimentación SA was incorporated in Spain as a public limited company by three founders, including Barviesa SA.
- Marleasing SA, a creditor of Barviesa, sued in a Spanish court seeking a declaration that La Comercial’s incorporation was null.
- Marleasing alleged the incorporation was a sham lacking lawful cause and intended to defraud Barviesa’s creditors, relying on Spanish Civil Code rules treating contracts without lawful cause as having no legal effect.
- La Comercial argued that EU company law limited the grounds on which a public limited company could be declared null and that Marleasing’s asserted ground was not permitted.
- At the relevant time, Spain had not implemented the EU directive governing nullity of public limited companies.
- The Spanish court referred questions to the Court of Justice of the European Communities concerning the effect of the unimplemented directive in a dispute between private parties.

## Issues

1. Whether a provision of an unimplemented directive could be relied on directly in a dispute between private parties to bar a national-law ground for declaring a company null.
2. Whether the national court had to interpret domestic law, as far as possible, in conformity with the directive even though the directive was unimplemented and the domestic provisions pre-dated it.
3. Whether alleged fraud on creditors could fall within the directive’s permitted nullity ground for “illegality of the objects of the company.”

## Decision

- The court held that directives cannot, by themselves, impose obligations on individuals and therefore cannot be relied upon as such against a private party in a horizontal dispute.
- The court held that national courts are bound, within their jurisdiction, to interpret national law as far as possible in light of the wording and purpose of a directive to achieve the result it seeks, regardless of whether the national provisions were adopted before or after the directive.
- The court ruled that the directive’s list of grounds for declaring a public limited company null is exhaustive; national law must be interpreted to prevent nullity on any other ground.
- The court interpreted “objects of the company” to mean the objects stated in the instrument of incorporation or articles of association; founders’ alleged fraudulent intent or lack of contractual cause did not, as such, constitute “illegality of the objects” under the directive.

## Legal Principles

- Directives lack horizontal direct effect: a directive may not of itself impose obligations on an individual and cannot be invoked as such against a private party.
- National courts must interpret domestic law, as far as possible, in conformity with an EU directive’s wording and purpose to attain the directive’s intended result, including where the domestic rules pre-date the directive.
- Where a directive establishes a closed list of permissible outcomes (here, grounds for corporate nullity), national courts must interpret national law to avoid results that expand beyond that list.
- For corporate-nullity rules tied to “objects of the company,” the relevant objects are those set out in the company’s constitutional documents, not alleged improper motives behind incorporation.

## Conclusion

The court rejected horizontal direct enforcement of the unimplemented directive but required the national court to construe domestic nullity rules, as far as possible, to align with the directive’s exhaustive grounds, thereby blocking a declaration of nullity based on “lack of cause” or creditor fraud allegations not fitting the directive’s permitted categories.


Marleasing SA v. La Comercial Int’l de Alimentación SA (Marleasing), Case C-106/89, 1990 E.C.R. I-4135 (E.C.J. 1990)