The Third Section of the Contentious-Administrative Chamber of the Supreme Court (TS) has rejected the request for precautionary measures presented by Ganz-Mavag (Magyar Vagon) to agree to the suspension of any business or process of acquisition of shares or participation of any kind in the share capital of the company Talgo and the notification of the same to the National Securities Market Commission (CNMV). It occurs when Talgo’s main shareholder, Trilantic, negotiates with Sidenor to transfer 29.9% of the train manufacturer’s shares.
Magyar Vagon requested that these precautionary measures be adopted while the contentious-administrative appeal it filed against the agreement of the Council of Ministers of August 27, 2024, which denied the request for foreign investment authorization of this company for the acquisition of 100 % of Talgo’s capital, alleging reasons of national security and public order. The Supreme Court considers that the requirements of existence of ‘periculum in mora’ and appearance of good law are not met to adopt the requested precautionary measures. Specifically, it says it does not appreciate that the failure to accept the precautionary measure “has an impact in such terms that makes the execution of an upholding judicial ruling impossible, because the harmful effects derived from the execution of the administrative act are not susceptible to repair.”
The high court emphasizes that the proposed precautionary measure thus affects general and third-party interests, “since there is no doubt, as regards the latter, that the exclusion of Talgo’s shares from the rules of freedom of supply and demand that govern the securities markets entails a deprivation of rights to third parties who may be interested in acquiring Talgo shares, and furthermore, may eventually cause harm to Talgo’s own shareholders, to the extent that such prohibition on the acquisition of shares could negatively influence the price of said shares in the stock market.
In addition, it considers that the prohibition on the acquisition of shares and participations in Talgo that may entail the taking of a control position, “affects the public interest represented by the reliability and regular functioning of the securities markets, which would be undermined.” by the requested measure, insofar as it represents a limitation on the transferability of negotiable securities protected by article 11 and related provisions of Law 6/2023, of January 17, on Securities Markets and Services. of Investment.
As a result of the weighing of the competing interests, the Chamber “considers the public interests and competing third parties to be of greater weight in this case and, therefore, the execution of the appealed Council of Ministers Agreement is preferable, without the adoption of the precautionary measure.” requested.
Regarding the appearance of good law invoked by the appellant, the Chamber recalls that it has been making a restrictive application of it, and that “in this case the requirement demanded by our jurisprudence to accept precautionary measures based on the criterion does not exist. of the appearance of good law, which requires that a manifest nullity be present, since the appreciation of the misuse of power as a case of nullity of full law due to alteration of the foreign investment control regime requires “That we delve into the examination of the merits of the matter to extremes that it is not possible to reach in a piece of precautionary measures.”
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