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III. The single economic entity doctrine

and liability of innocent subsidiaries

The first consideration will focus on the reasonings of the CJEU in the case
where it was required to justify the contradiction between the single economic entity
doctrine and the principle of personal liability. The following topic will then examine

whether the decisive influence plays a significant role in the attribution of liability or
not. The chapter will conclude with the recent preliminary reference from the Spanish

Court in case Sumal.

The contradiction with the principle of personal liability

One of the contradicting principles against the single economic doctrine is
the principle of personal liability. Limited liability is a fundamental principle of corporate
law which based on the simple rule that the investors in the corporation are not liable

for more than the amount they invest. However, there are some circumstances that
the liability may be attributed to the shareholders, known as the ‘piercing the corporate

veil’, in order to prevent companies from taking advantages from the principle.
The veil of the corporate organisation is considered to be pierced when specific criteria,
which are different in each jurisdiction, are met.

It should be borne in mind that the possibility to rely on the derogation of the

principle of limited liability by the corporate veil piercing is slim, owing to the economic
significance of the principle and hesitant determination of the national courts to permit
such derogation.
68
In EU law perspective, the principle of personal liability is recognised at the
primary level. Charter of Fundamental Rights of the European Union (CFREU) stipulates

that to hold one liable for any infringements, primarily criminal, and the law enforcer

68 Phillip I. Blumberg, Limited Liability and Corporate Groups, Faculty Articles and Papers. 28 available
th
at https://opencommons.uconn.edu/cgi/viewcontent.cgi?article=1027&context=law_papers) accessd 25 May 2020;
David W. Leebron, Limited Liability, Tort Victims, and Creditors, (1991) Colum. L. Rev. Vol. 91, No.7, 1565; Alison
Jones, The Boundaries of an Undertaking In EU Competition Law, supra (n.55), p.319

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