Ejaz Ahmad

Since its birth New York Convention 1958 has been subject to interpretation and application by National judges of State courts parties to the convention. Whereas, there is no central court to issue an authoritative interpretation and its practical consistent application, convention has undergone variant and sometimes conflicting interpretations in various legal systems. While according to the principle of autonomous interpretation as per Vienna Convention on Law of Treaties, New York Convention shall be interpreted  in accordance with the ordinary meaning to be given to the terms of the treaty, sometimes, justice demands, under circumstantial evidence, judges to apply and interpret the convention’s terms expansively.

Comply-or-explain is an approach which positively recognises that an alternative to a code provision is justified if it achieves good governance and companies are prepared to be transparent. Departures from code provisions are not presumed to be breaches because accompanying explanations should provide insight into how companies think about improving their corporate governance.

Abstract
Since its birth New York Convention 1958 has been subject to interpretation and application by National judges of State courts parties to the convention. Whereas, there is no central court to issue an authoritative interpretation and its practical consistent application, convention has undergone variant and sometimes conflicting interpretations in various legal systems. While according to the principle of autonomous interpretation as per Vienna Convention on Law of Treaties, New York Convention shall be interpreted in accordance with the ordinary meaning to be given to the terms of the treaty, sometimes, justice demands, under circumstantial evidence, judges to apply and interpret the convention’s terms expansively.

Corporate groups form a large part of the EU economy, however this typical form of business organization is less regulated than any other part of corporate law and involves enormous complexities. The agency conflicts in corporate groups are more intricate than in an independent company and thus need special rules and regulations to deal with. Large number of jurisdictions regulate corporate groups with ordinary civil and company law principles, however some jurisdictions have adopted a separate body of group law. Although the discussion on regulation of corporate groups is going on for decades in the EU, very less has been achieved on the harmonization of laws governing the affairs of corporate groups. The management of the subsidiary company is the most vulnerable constituency in context of parent-subsidiary relationships. Directors of a subsidiary company owe duties towards all the stakeholders involved in the company, however these stakeholders have competing interests. The discharging of duties towards one side may expose them to liabilities towards the other side. They constantly face the dilemma of balancing among various competing interests of different stakeholders. Despite subsidiary’s directors critical position they are subject to the same duties and liabilities as directors of an independent company.  The position of the minority shareholders of a subsidiary company is weaker than that of the minority shareholders of an independent company. They can easily be exposed to the opportunistic behaviour of the controlling shareholder (the parent company). Frequent intragroup transactions makes it hard for the minority shareholders of the subsidiary company to judge the transparency and fairness of the related party transactions.  The creditors of the subsidiary company like all other constituencies also face heavier risks. All those acts, arrangements and transactions undertaken at the instructions of the parent company which are prejudicial to the interests of minority shareholders are equally harmful to the interests of the creditors. While voluntary creditors are in the position of before-hand bargaining, risk is shifted to the involuntary creditors without being given any opportunity for negotiations.  This thesis addresses the position of the directors, minority shareholders and creditors of the subsidiary company in group management under the German and English legal systems. While the German legal system contains a separate body of group law, the English legal system governs the group affairs through general civil and company law principles. A legal comparison is performed between the solutions provided for by the two legal systems addressing the problems associated with the governance of groups and group management.