[1] There was no countervailing justification by any overriding requirements relating to the general interest to not uphold the right of freedom of establishment.

3 The Zivilprozessordnung (German Code of Civil Procedure) provides that an action brought by a party which does not have the capacity to bring legal proceedings must be dismissed as inadmissible.

4 According to the settled case-law of the Bundesgerichtshof, which is approved by most German legal commentators, a company's legal capacity is determined by reference to the law applicable in the place where its actual centre of administration is established (`Sitztheorie' or company seat principle), as opposed to the `Gründungstheorie' or incorporation principle, by virtue of which legal capacity is determined in accordance with the law of the State in which the company was incorporated.

That rule also applies where a company has been validly incorporated in another State and has subsequently transferred its actual centre of administration to Germany.

It was cited in order, in some way, to assimilate the situation in Daily Mail and General Trust to the situation which under German law entails the loss of legal capacity and of the capacity to be a party to legal proceedings by a company incorporated under the law of another Member State.

[...] 68 At paragraph 20 of that judgment, the Court pointed out that the legislation of the Member States varies widely in regard both to the factor providing a connection to the national territory required for the incorporation of a company and to the question whether a company incorporated under the legislation of a Member State may subsequently modify that connecting factor.