Corporate Veil Case

The applicants were six Greek limited companies with a combined shareholding of more than 50 per cent in another Greek limited company, Karolos Fix Brewery ("Fix Brewery"). Under Greek law, legal personality as a limited company gives it autonomy in relation to its founders and shareholders and confers on it legal capacity in its own name. Limited companies have their own assets which are distinct from that of the shareholders, who have no right of ownership in their investment in the company. Shareholders were not personally liable for the company's debts.

Since 1975, Fix Brewery's business was in decline and was accumulating substantial debts. In 1976, with a view to overcoming its financial problems Fix Brewery began studies into potentially lucrative developments on its former factory sites in Athens, in Syrangou Avenue and Patission Street. Disputes with Athens Municipal Council as to the use of the sites under its development plans prevented any progress with Fix Brewery's proposed schemes. Then, in 1981, the Council began erecting signs at the sites bearing the words "area to be expropriated", which set in train a series of legal disputes as to the future of these sites. Meanwhile on August 30, 1983 Fix Brewery went into voluntary liquidation. Despite resistance from the applicants, the Greek State then used statutory powers to intervene in the liquidation and required a special winding-up procedure to be followed which, inter alia, took the appointment of the liquidators out of the shareholders' hands. On June 26, 1984 as part of this special procedure the Athens Court of Appeal appointed two liquidators, one of which was to represent the interests of the National Bank of Greece, Fix Brewery's main creditor. At various times following the appointment of the two liquidators one or more of the applicant companies called upon the liquidators to take various measures and pursue specific litigation in relation to the two sites. The liquidators did pursue some of the litigation, though they did not take all the actions demanded by the applicants. The domestic litigation had not yet been concluded by the time of the hearing before the European Court, as Fix Brewery's appeal against one planning decision was still pending before the Supreme Administrative Court. From October 1991, Fix Brewery had a single liquidator designated by the National Bank of Greece. In the course of the litigation which led to the new liquidator's appointment, the Court of Appeal commended the actions of the previous liquidators, at least up to September 1990, following which it considered there had been unjustified delay in the sale of the two sites. In March 1993 the Syrangou Avenue site was expropriated due to planned works on the Athens underground train system.

...