The European Court of Justice (ECJ) has just delivered its judgment in Azul Impacto against BPSA 9 case (C-186/12), in which he dealt with an issue of liability for the debts of related companies.
The dispute between the parties concerned the possibility for Azul Impacto (claimant) to reach into the pocket of another entity: Bouygues Immobilier – a parent company of BPSA 9 (the defendant), which was sued for breaching a contract. Portuguese Commercial Companies Code establishes the principle of the joint and several liability of parent companies vis-à-vis the creditors of their subsidiaries. This provision is debatable because this liability applies only to companies which seats are located in Portugal. Therefore, a company with seat outside Portugal are in a better position because they do not carry risk for the debts of their Portuguese subsidiaries. It was the case here, because Bouygues Immobilier is seated in France. The Court had to decide whether such provision is consistent with Community Law and, specifically, with Article 49 of the Treaty on the Functioning of the European Union (TFEU).
Having examined the case, the ECJ first noted that, due to the absence of a harmonized settlement of this issue at EU level, Member States are in principle competent to pass provisions on mutual liability between related companies.
Consequently, ECJ held that the lack of joint and several liability of parent companies which are seated abroad for the obligations of its subsidiaries is not incompatible with the EU Law, namely art. 49 TFEU. Such provision does not make less attractive the exercise, by the parent companies seated outside Portugal, of the freedom of establishment guaranteed by the Treaty. On the contrary: it is beneficial for these entities.
In the thesis of the ruling, the Court concluded that Article 49 TFEU must be interpreted as not precluding a national legislation, such as those excluding the application of the principle of joint and several liability of parent companies vis-à-vis the creditors of their subsidiaries to parent companies having their seat in the territory of another Member State.
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