In recent months Spain's Supreme Court has handed down an important ruling that directly shapes the framework of company directors' liability in Spain.
Summary of the ruling
The Supreme Court reiterates that a breach of the duty of loyalty is not, on its own, sufficient grounds for a company's liability action against its directors unless the loss caused to the company is proven.
Directors' liability remains one of the central issues in company law.
In this area, recent Supreme Court case law stresses the importance of distinguishing between a breach of the duties inherent in the office and the requirements for obtaining an award of damages.
In Judgment 1129/2026 of 13 July, the Supreme Court examined a company liability action concerning related-party transactions involving a person who held management and executive roles.
The Court upheld the dismissal of the claim because the loss suffered by the company had not been proven, even though a breach of the duty of loyalty had been alleged.
Impact of the ruling
This judgment highlights a fundamental point: conduct that may run contrary to a director's duties does not remove the need to prove the specific requirements of the action brought.
In particular, a company liability action must meet the requirements set out in the Spanish Companies Act, including the damage caused to the company's assets and its causal link to the conduct alleged.
In practical terms, this doctrine underlines the importance of properly documenting business decisions, identifying potential conflicts of interest and scrutinising related-party transactions with particular rigour.
It is also essential to define the litigation strategy correctly and to set out clearly the facts, losses and claims on which any action is based.
Our recommendation
Preventing shareholder and boardroom disputes and properly protecting the company's interests therefore calls for legal advice that combines regulatory knowledge, risk analysis and experience in commercial litigation.
In an increasingly demanding business environment, anticipating disputes and acting with legal rigour is an essential tool for protecting companies' assets and safeguarding those who manage them from liability.
