Kuwait Court of Cassation principle number 289

Summary: - A holding company. It is a company that owns shares or equity interests in the capital of another company or companies independent of it in a proportion enabling it to exercise financial and administrative control over that subsidiary company. Each subsidiary retains its legal personality and its separate patrimony, independently of the other subsidiaries and of the holding company. Its implication. One subsidiary conducts a commercial activity that confers a right upon it or imposes an obligation upon it, concerning which a judicial dispute arises. Its effect is that it is the party with standing in the litigation, whether as claimant or defendant, to the exclusion of the other subsidiaries of the holding company. Rule: It is apparent from Article Two of the Commercial Companies Law 15 of 1960(*) and its amendments, and Articles 226 to 229 contained in Chapter Eight of the same Law concerning holding companies, that commercial companies—with the exception of undisclosed partnership companies—enjoy legal personality independent of one another and of the persons of their partners. A holding company is a company that owns shares or equity interests in the capital of another company or companies independent of it in a proportion enabling it to exercise financial and administrative control over those subsidiaries. Nevertheless, each of those subsidiaries retains its legal personality and its separate patrimony, independently of the other subsidiaries and of the holding company. Accordingly, if one subsidiary conducts a commercial activity that confers a right upon it or imposes an obligation upon it, and a judicial dispute arises concerning it, that company alone, to the exclusion of the other subsidiaries falling with it under the umbrella of the holding company, has standing in the litigation, whether as claimant or defendant.