CJEU: Piercing the Corporate Veil Is Not Subject to the Lex Societatis

On January 15, 2026, the Court of Justice rendered its judgment in Wunner, C-77/24, addressing the application of the Rome II Regulation (864/2007) to the personal liability of company directors in the context of unlawful online gambling.

The judgment clarifies the scope of the company law exception in Article 1(2)(d) of the Rome II Regulation and raises questions about characterization in EU private international law as well as the relationship between company law limited liability and tort-based accountability in international situations.

Background

Before going into bankruptcy, a Maltese company operated an online casino accessible throughout the European market. Access to the gambling services required users to accept the company’s general terms and conditions. After losing nearly 20 000 Euros during a few months, a person from Austria filed a lawsuit in Austria against two of the company’s former directors alleging that they were personally liable for his losses. The legal basis for the claim was that the contract he had entered into to access the online casino was null and void under Austrian law for infringing the Austrian gambling monopoly law and that the former directors consequently were liable in tort.

The Austrian court of first instance first dismissed the claim for lack of jurisdiction under the Brussels I bis Regulation’s Article 7(2) which grants jurisdiction to the court where the harmful event occurred. In the court of appeal, that decision was set aside. The two defendant directors appealed this decision to the Austrian Supreme Court.

Noting that the issue of jurisdiction presupposes that Austrian law (on which the claim was based) is applicable, the Austrian Supreme Court referred questions on, not the Brussels I bis Regulation, but on the Rome II Regulation determining the law applicable in torts. The question concerned the explicit exception for company law issues in Article 1(2)(d) of the Rome II Regulation and whether the Regulation was applicable at all. Being dependent on a positive answer to the first question, the second question was how to apply the Rome II regulation’s general conflict-of-laws rule in Article 4 pointing out the law of the place where the damage occurred to online casino losses.

Judgment

The Court of Justice first answered whether the Rome II Regulations conflict of laws rule could be applied to the claim in question or if it was to be considered subject to the lex societatis exception in Article 1.(2)(d). This exception states, in what is relevant here, that “non-contractual obligations arising out of the law of companies and other bodies corporate or unincorporated regarding matters such as […] the personal liability of officers and members as such for the obligations of the company or body” are excluded from the Regulation’s scope. As the Austrian claim clearly sought to “pierce the corporate veil” by making the managers liable for actions carried out in the name of the Maltese company, the question for the Court was whether the exception applied.

With reference to its judgment in BMA Nederland, C-498/20, the Court held that the lex societatits exception shall be interpreted as a “functional criterion” (p. 24). Holding that it is the connection to company law issues relating to the operation and organisation that are excepted, the Court decided that an “external” claim like the one in the case at hand cannot be subject to the exception (p. 27). In other words: tort claims against company directors by third parties are, as a rule, governed by the Rome II Regulation.

Second, the Court of Justice also ruled on the localization of damage. Here, the Court relied on the established case-law principle that it is the place where the alleged damage actually manifests itself that is determinative (p. 41). In the context of online gambling, one could have thought that the damage would primarily be financial. In the case at hand, however, the alleged damages were characterized as non-pecuniary in the sense that it was the violation of the gambling prohibition in itself that constituted an “interference with [the alleged tort victim’s] interests” (p. 42).

According to the Court, the localization of such non-pecuniary harm occurs in the Member State where the gambler is habitually resident. Read literally, this reasoning produces an asymmetry between online and real-world gambling. If damage in online gambling is deemed to occur at the gambler’s habitual residence, online gambling may be subject to the law of that State even when the online gambler is physically present elsewhere. In practical terms, this suggests that a person habitually resident in Austria who travels to Malta could lawfully enter a Maltese (real-world) casino, yet might still trigger the application of Austrian law when accessing the same services online from Maltese territory. However, in the opinion of the General Advocate that the Court refers to in these parts, it seems that the localization is made with respect to the long-lasting relation that the gambler had with the online casino (see particularly the General Advocate’s discussion leading up to the part-conclusion in p. 69 of the opinion).

Comment

The Wunner judgment is not only clarifying that the lex societatis exception is limited, it also illustrates the power of the claim and the role of national substantive law for the issue of private international law characterization.

From the facts presented in the case, it is clear that the online gambling in question was originally subject to a contract between the claimant and a Maltese company. Disregarding both the contract and the corporate personality, the claimant directed the claim against the managing directors behind the Maltese company. For such a claim to be characterised as non-contractual under the Rome II Regulation, it is sufficient that damage has occurred in the country whose law forms the basis of the claim. Consequently, neither corporate personality nor the contract prevails over the tort law of the country where the damage occurs.

For international company law liability issues, the Wunner judgment may be of great importance. A fundamental principle of modern company law is the idea of limited liability that the corporate personality creates not only for the shareholders but also for managers and other actors within the company. The judgment indicates that this structural protection is not immune from the operation of foreign tort law under the Rome II Regulation. In effect, the shield of limited liability guaranteed by the lex societatis is no stronger than the tort law in the country where alleged damage may have occurred.

More generally, the reasoning aligns with the broader legislative trend toward expanding personal accountability not only by piercing the corporate veil, but also by imposing direct liability within contractual chains.