Kuwait Court of Cassation principle number 329

Summary: - Holding company. A company owning shares or 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. Each subsidiary retains its legal personality and financial patrimony independent of the others and of the holding company. Its implication. A subsidiary carrying on 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 has standing in the litigation, whether as plaintiff or defendant, to the exclusion of the other subsidiaries of the holding company. Rule: It is apparent from the stipulation of 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—except joint participation companies—have legal personality independent of one another and of the persons of their partners, and that a holding company is a company owning shares or 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 financial patrimony independent of the others and of the holding company. Accordingly, if a subsidiary carries on 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 alongside it under the umbrella of the holding company, has standing in the litigation, whether as plaintiff or defendant.