Federal union’s tort liability for damages caused to mixed capital companies: an analysis of the conflict between public interest and the federal union’s interest as majority shareholder

Abstract

This study aims to examine legal aspects around the tort liability of the Government for damages caused to mixed capital companies as a result of acts in the self-interest of the Government as majority shareholder that fail to meet the public interest for which the company was set up or that cause a negative financial impact on the company. The methodology that was used for this purpose is basically a comparative doctrinal study and analysis of theoretical works associated with descriptive research of legal rules applicable to the subject. Case studies can be used as a way to illustrate the analysis that was carried out. Using inductive or deductive methods, information will be analyzed to achieve the paper’s objective, namely, that of clarifying whether and how the tort liability of the Government can be characterized for damages caused to mixed capital companies as a result of acts in the self-interest of the Government but not in the public interest. The research mainly addressed issues related to social role and tort liability, taking into account latent conflicts of interest in mixed capital companies, which must meet the primary public interest that justified their creation and the interests of the Government as majority shareholder, the interests of minority shareholders, and its responsibilities toward its employees and the community that it serves. It was seen that the law provides for the preponderance of primary public interest over the self-interest of the Government as majority shareholder and over the interests of private shareholders, even if the company’s profitability has to be reduced for this purpose. Nonetheless, studies have determined that it is not possible to establish criteria in advance to define conducts that may be characterized as abuse of power and that the public interest that justified the creation of a mixed capital company must be analyzed in each case and compared to the conduct adopted by the Government as majority shareholder.