National law university odisha corporate law I national law university odisha
Parent- Subsidiary Relation under the SEE Doctrine
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- Viho v. Commission 26, and subsequently it was first adopted in Indian regime in the case of Shamsher Kataria v. Honda
- DHN Food Distributors v Tower Hamlets
- Viho Europe BV
| Parent- Subsidiary Relation under the SEE Doctrine Generally, this doctrine of SEE gets invoked in the cases which involve the relationship between a parent company/holding and a subsidiary. The cases which involve sister companies and relationship between agencies are still preladious. This doctrine first evolved in Viho v. Commission 26 , and subsequently it was first adopted in Indian regime in the case of Shamsher Kataria v. Honda 27 , wherein there was a formation of an agreement between Hyundai Motor Company and subsidiary company Hyundai Motor India Limited. A subsidiary company although can be separate legal entity yet it does not have the powers to freely decide its lead and say in the market and it is bound to act as per the order of its parent company, and therefore any deal between the subsidiary and the parent company cannot therefore be considered anticompetitive. A rebuttable assumption of the activity of unequivocal impact by the parent is brought up in instances of entirely or about completely owned subsidiary. In the case of Hydrotherm 28 , the doctrine was applied to legal businesses having a common owner. Similarly, AEK Athens and Slavia Prague were not allowed to compete together during the 1998 and 1999 UEFA Cup because of the common ownership of the English National Investment Company. For sister entities who have a common owner, or partly owned subsidiaries, the single economic entity doctrine maybe invoked if it is shown that there is a unity of economic interest between the enterprises. This entails a scrutiny of any evidence of a coordinated strategy, organisational linkages and economic synergy This justification for raising the curtain is for companies within a corporate community. The basis of this argument is that, given the separate legal identities of the entity within the corporation, they actually represent a single unit for economic purposes and therefore should be regarded as one legal unit. Therefore the liabilities should be attached to the entire group, 25 Michelin v Commission of the European Communities [1983] ECR 110 (EU. Case Ci Viho Europe BV v Commissionn of the European Communities [1996] ECR I (EU. 27 Shamsher Kataria v Honda Seil Cars India Ltd And Ors 2014 Comp LR 1 (CCI). Case C- 170/83 Hydrotherm Gereatebau GmbH v Compact del Dott [1984] ECR I- 271 (EU. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii since companies aim to achieve a single economic objective. This argument was presented successfully in DHN Food Distributors v Tower Hamlets 29 the 1976 case where the veil was lifted in order to benefit the parent company in a group situation. It was observed that DHN owned the land of its subsidiaries and was entitled to compensation for the Tower Hamlets corporate torts committed. In Viho Europe BV 30 case, the ECJ observed that one of the companies involved (Parker) used to hold one hundred percent of the shares of its subsidiaries in Germany, Belgium, Spain, France and the Netherlands and that the sales and marketing activities of the subsidiaries were directed by an area team appointed by the parent company and which controlled sales targets, gross margins, sales costs, cash flows and stocks This team also set out the product range to be sold, tracked advertising and issued price and discount directives. The ECJ therefore concluded that Parker and its subsidiaries formed a single economic unit where the subsidiaries did not enjoy real autonomy in determining their course of action in the market, but carried out the instructions issued by the parent company Download 0.88 Mb. Share with your friends:
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