## Facts

- Überseering BV was incorporated under Dutch law with its registered office in the Netherlands.
- Überseering acquired land in Düsseldorf and contracted with Nordic Construction Company Baumanagement GmbH (NCC), a German company, for construction/renovation work.
- A dispute arose over alleged defective performance, and Überseering sued NCC in Germany.
- By the time of litigation, all shares in Überseering were acquired by two German nationals, and its actual center of administration moved to Germany without reincorporation under German law.
- German courts applied the “real seat” doctrine, treating a company’s legal capacity as governed by the law of the place of its actual center of administration.
- Applying that doctrine and German civil procedure linking standing to legal capacity, the German courts considered Überseering lacking capacity to be a party and dismissed the action as inadmissible.
- The German Federal Court of Justice stayed proceedings and referred questions to the Court of Justice about whether non-recognition of legal capacity and standing was compatible with the Treaty freedom of establishment.

## Issues

1. Whether the Treaty freedom of establishment required Germany to recognize the legal capacity and capacity to sue of a company validly incorporated in another Member State with its registered office there, even after moving its actual center of administration to Germany.
2. Whether refusing recognition of that capacity based on the real-seat doctrine constituted a restriction on freedom of establishment.
3. Whether such a restriction could be justified (including by reliance on the absence of an inter-state convention concerning mutual recognition of companies).

## Decision

- The Court held that refusing to recognize the legal capacity of a company validly formed under another Member State’s law, and consequently its capacity to be a party to proceedings, was a restriction on freedom of establishment.
- The Court ruled that Germany was required to recognize the legal capacity and procedural standing that the company possessed under the law of its Member State of incorporation.
- The Court rejected justifications based on the absence of a convention on company recognition and found no sufficient overriding public-interest justification for an outright denial of capacity.

## Legal Principles

- Companies formed under the law of a Member State, with a registered office (or other qualifying connecting factor) within the Union, are protected by the Treaty freedom of establishment.
- A host Member State must recognize the legal capacity, and thus the capacity to sue and be sued, that an EU company enjoys under the law of its Member State of incorporation.
- A host state’s refusal to recognize such basic capacity because a company’s central administration moved into the host state is a restriction that effectively nullifies freedom of establishment.
- The absence of inter-state conventions on mutual recognition does not permit Member States to deny recognition where Treaty provisions govern the matter.
- General-interest objectives (e.g., creditor or shareholder protection) cannot justify an outright denial of legal and procedural capacity; any protective measures must be proportionate.

## Conclusion

The Court concluded that Germany could not, consistent with the Treaty freedom of establishment, deny an EU-incorporated company its legal capacity and standing to sue solely because the company’s central administration had moved to Germany without reincorporation under German law.


Überseering BV v. Nordic Constr. Co. Baumanagement GmbH, Case C-208/00, 2002 E.C.R. I-9919 (ECJ 2002)