## Facts

- A German association of Daihatsu car dealers sought to compel Daihatsu Deutschland GmbH, a German importer organized as a limited liability company, to disclose its annual accounts or face periodic coercive fines.
- EU company-law rules required publication of annual accounts and required Member States to provide “appropriate penalties” for failure to disclose.
- German law implemented the disclosure duty and provided a coercive-fine mechanism, but allowed applications for fines only by specified groups (including company members, creditors, and certain employee representative bodies).
- The association was not within any statutorily authorized category and its application was rejected as inadmissible by German courts.
- A German appellate court referred questions to the Court of Justice concerning whether EU law required broader standing and whether the directive rule on penalties could be relied on directly.

## Issues

1. Whether EU law requiring “appropriate penalties” for non-disclosure of annual accounts forbids national rules limiting who may initiate penalty proceedings to specific categories (e.g., members, creditors, works councils).
2. Whether the directive’s penalties provision is sufficiently clear, precise, and unconditional to have direct effect in national courts.
3. If direct effect exists, whether a private association lacking standing under national law may rely on the directive to obtain imposition of penalties on a company.

## Decision

- The Court held that EU law did not require Member States to allow all interested third parties to request imposition of penalties for non-disclosure.
- The Court held that Member States may set procedural rules, including standing limits, so long as the penalty system secures effective enforcement of the disclosure obligation.
- The Court held that the directive provision requiring “appropriate penalties” lacked direct effect as to who may trigger sanctions because it left substantial discretion to Member States.
- The Court concluded that an association outside the nationally defined categories could not rely on the directive alone to compel penalty proceedings against the company.

## Legal Principles

- A directive obligation to provide “appropriate penalties” can leave Member States discretion over sanction design and procedural arrangements, including which persons may initiate enforcement.
- National procedural autonomy is permitted where the chosen mechanisms do not render EU obligations practically ineffective; penalties must be effective, proportionate, and dissuasive.
- A directive provision has direct effect only if it is clear, precise, and unconditional; programmatic language that leaves key choices to Member States generally cannot create directly enforceable rights to override national standing rules.
- A directive that does not define eligible applicants for sanctions does not confer a general right on private actors to bring a public enforcement action against private companies.

## Conclusion

The Court upheld national limits on who may seek coercive fines for failure to publish annual accounts, reasoning that EU law required effective penalties but did not mandate an open-ended right for third parties to initiate sanction proceedings, and the relevant directive provision could not be invoked directly to expand standing beyond national law.


Verband Deutscher Daihatsu-Händler eV v. Daihatsu Deutschland GmbH, Case C-97/96 (C.J. Dec. 4, 1997)