The Court of Appeal has ruled overseas parent companies are liable for the actions of their New Zealand operations, in a decision involving a case against a Swiss-owned freight-forwarding company.
The court, in a decision released this week, upheld an earlier High Court decision and rejected Kuehne+Nagel's legal argument that the Commerce Commission did not have the jurisdiction to take it to court over cartel allegations.
Kuehne+Nagel had argued it was a Swiss holding company without involvement in the operation or management of freight forwarding.
The case will now go to the High Court.
In 2010, the commission took six international freight-forwarding companies to court arguing they colluded over covering the cost of air security charges.
Five of them, EGL, Geologistics International (Bermuda), BAX Global, Schenker AG and Panalpina World Transport, have since settled with the commission and were ordered to pay penalties totalling $8.85 million.
Commission chairman Mark Berry said the Court of Appeal decision was an important clarification of the court's jurisdiction over overseas companies.
"The decision recognises the potential for overseas parent companies to be held to account in this country for the conduct of their New Zealand subsidiaries."The case is separate from the "air cargo case", where the commission took action against a number of airlines in relation to security and fuel surcharges.
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