Überseering BV, a Dutch company, was told that because its shares had been all acquired by Germans but it had failed to reincorporate under German law, it had no legal identity in Germany and could not, therefore, enforce a contract to develop land against Nordic Construction. Überseering BV argued that this represented a restriction on its right to freedom of establishment, and this was prohibited by TEC article 43 and 48. The German court referred to the ECJ the question of whether German law could lead to this result.
The European Court of Justice held that TEC articles 43 and 48 precluded German courts denying legal capacity to companies like Überseering BV, because it was fundamental that states recognised companies incorporated abroad, regardless of whether member states had conventions on mutual recognition of companies under article 293. Despite change in ownership, Überseering BV was still a valid company in the Netherlands. There was no countervailing justification by any overriding requirements relating to the general interest to not uphold the right of freedom of establishment.