The Iraqi Federal Court of Cassation has confirmed that registration of a foreign company branch in Iraq does not create a legal personality separate from the foreign parent company.
Background
The dispute arose from commercial works performed in connection with the Iraqi operations of a foreign company. The claim for outstanding fees was directed against the manager of the registered branch in an official capacity.
Court’s Findings
The Court held that branch registration authorises the foreign company to conduct business in Iraq but does not create a new Iraqi company. The foreign parent remains the legal person holding the rights and obligations arising from the branch’s activities.
A claim directed only against the branch may therefore be dismissed because the branch does not possess independent legal personality.
Practical Implications
Contracts should identify the foreign parent as acting through its Iraqi branch. Powers of attorney, invoices, guarantees and pleadings should consistently use the parent’s legal details and correctly identify its representative.
Conclusion
The decision reinforces the distinction between a foreign company and its Iraqi branch. The branch may maintain an operational presence, but the foreign parent remains the entity capable of suing and being sued.