Annabelle &

International court of Justice,1970

Case concerning Barcelona Traction, Light & Power Co. Belgium v. Spain

Facts The Barcelona Traction, Light, and Power

Co. A. Incorporated in 1911 under Canadian law B. Supply electricity in Spain

C. A limited liability company

Its capital was represented by shares. D. Operated in Spain but was owned mostly by Belgians-88% shareholders
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Contextual background
A. Barcelona Traction issued bonds In 1936, the servicing of the BT bonds suspended by Spanish civil war. After war, Spanish Authorities refuse resumption B. In 1938, Spain declared the company bankrupt Took actions detriment to its shareholders. C. Belgium (Plaintiff) brought a suit against Spain (Dependant) in the ICJ
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Belgium V Spain
Plaintiff: Belgium, seek reparation for damage Defendant: Spain, refuse compensation to Belgian shareholders

Barcelona Traction(BT):
1) Headquarter: Canada. 2) Business place: Spain 3) Major shareholder: Belgian
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 Transaction diagram

Plaintiff: Barcelona Traction Have subsidiary companies in Canada & Spain

electricity

Defendant: Spain government

Money Servicing of the Bonds

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shareholder
A shareholder or stockholder A. an individual or institution that legally owns one or more shares of stock in a public or private corporation.

B. Shareholders own the stock, but not the corporation itself

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Shareholders' direct rights

Independent rights of complaining:

The right (not interests)to

1)any declared dividend, 2) attend and vote at any general meetings, 3) share in the residual assets of the company in liquidation.

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Judge s interpretation
1. Not a diplomatic claim :Belgium lacked just standi 2. The act only infringed the companys rights No responsibility to shareholders.

3. Distinction: Direct infringement to shareholders rights & Difficulties or financial losses of interests result from company's action
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Issue

A. Whether the shareholders can be a legal entity separate from the company itself B. Whether Belgium can complain on behalf of Barcelona Tractions shareholders
C. Whether Spain has an obligation to make reparation for Belgium shareholders
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Rule of Law The general rule is that

A. The entity of the company is separate from that of the shareholder with a distinct set of rights.

B. The shareholder cannot be identified with company

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Application
Corporations are juridical entities Have legal identities separate from that of their owners.

Corporate entities have rights and obligations to themselves with independent corporate personality. It means that rights and benefits accruing to the company belong to the company and not its owners.
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Application
A. Only a company can claim to damage or financial loss caused by unfair or illegal actions by other entities such as a State.
B. In any event shareholders are bound to take account of the risk of capital depreciation or loss, resulting from commercial hazards or from prejudice caused to the company by illegal treatment.
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Application
C. There is a distinction

Between injury of a right &

injury to a simple interest. D. They cannot claim on financial loss of their investment.

Only when their rights such as the right to any declared dividend is directly infringed, they have an independent right of action.
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Conclusion
The fact that shareholder who were suffered from damage were Belgian cannot justify a diplomatic claim. Answers A. Yes. The shareholders can be a legal entity separate from the company itself B. No. Belgium cant complain on behalf of Barcelona Tractions shareholders C. No. Spain doesnt have an obligation to make reparation for Belgium shareholders
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More contextual settings:

Injured party: company, but not shareholders.

Belgium could not sue Spain for BT's Belgian owners. Interensitnlgy, Canada gave up the right of protection of BT.
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Case Points

Company &Shareholders are mutually independent

shareholders' limited liability

limited assets & rights of the company

Only the company can seek judicial remedies

unless the shareholder's direct rights have been infringed

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Argument

"Community of destiny": the relationship between shareholders&company--interconnected in suffering from damage--should be seperated in defending their own rights.

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Thank you