Kuwait Court of Cassation principle number 87

Summary: - A holding company. It is a company that owns shares or interests in the capital of another company or other 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 financial patrimony independently of the others and of the holding company. Its implication. A 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 alone has standing in the proceedings, whether as plaintiff or defendant, to the exclusion of the other companies affiliated with the holding company. Rule: It is apparent from the affirmation in Article Two of 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 venture companies—enjoy a legal personality independent of one another and of the persons of their partners, and that a holding company is a company that owns shares or interests in the capital of another company or other companies independent of it, in a proportion enabling it to exercise financial and administrative control over those subsidiary companies. Nevertheless, each of those subsidiary companies retains its legal personality and financial patrimony independently of the others and of the holding company. Consequently, if a 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 subsidiary companies falling with it under the umbrella of the holding company, has standing in the proceedings, whether as plaintiff or defendant.