CYPRUS: ENGLISH GUIDANCE ON THE OBLIGATION OF A PARENT COMPANY TO DISCLOSE DOCUMENTS OF IT’S SUBSIDIARIES
In a recent judgment issued by the English Commercial Court in Pipia v BGEO Group Limited [2020] EWHC 402, it has been held that, initially, the parent company does not have automatically control of its subsidiaries’ documents, merely by virtue of its shareholding .
According to the Court, a parent company have control over it’s subsidiaries documents for disclosure purposes in one of the following distinct circumstances:
i. “Where there is an existing arrangement or understanding, whether or not legally enforceable as a contract, that in practice provides the parent with a right of access to documents held by its subsidiary….. .
ii. “Where the parent company has a presently enforceable legal right to obtain the documents from its subsidiary.”
The court also stated that to determine whether a subsiadiary’s documents are within the “control” of the parent company, by virtue of standing consent, it is helpful to ask:
i. “firstly, the scope (subject matter) of the consent – the documents or types of document covered by the consent;
ii. secondly, the type of consent – how, under the consent given, the disclosing party will get hold of those documents (e.g. by looking through documents for itself and taking copies if it wishes, or by having documents located and sent (or copied) to it, or by having documents located and sent (or copied) to it to the extent they match some further (review) criteria);
iii. thirdly, the quality of the consent – whether it involves free and unfettered access to the documents covered, of which (or copies of which) the party will get hold in that way.”
The above English judgment provides helpful guidance to Cypriot Courts, in deciding issues of parent’s obligation or right over it’s subsidiary’s documents for disclosure purposes.
For further information on this topic please contact
Ms. Eleana Dimitriou( edimitriou@pittaslegal.com ) at SOTERIS PITTAS & CO LLC,
by telephone (+357 25 028460) or by fax (+357 25 028461)
The content of this article is intended to provide a general guide to the subject matter. Specialist advise should be sought about your specific circumstances.
