Practice Note - Ministerial Determination ­ overseas listed companies and their subsidiaries ­ Part 2

[27] When the Lease was executed on 19 September 1996, the defendant was a subsidiary of Mobil Petroleum Co., Inc. Mobil Petroleum Co., Inc. was, in turn, a wholly owned subsidiary of Mobil Oil Corporation, an entity listed on the New York Stock Exchange (‘NYSE’).

[28] Exxon Corporation and Mobil Oil Corporation merged in November 1999, and the defendant became a wholly owned subsidiary of ExxonMobil Australia Pty Ltd, which in turn, is a wholly owned subsidiary of Exxon Mobil Corporation. Both Mobil Oil Corporation and ExxonMobil Corporation were listed on the NYSE at the time of the merger. ExxonMobil Corporation remains listed on the NYSE.

[29] On 22 March 2000, defendant converted to a proprietary company known as Mobil Oil Australia Pty Ltd (‘the defendant’).

[30] Until 2013 the NYSE, then known as NYSE Euronext, was a member of the World Federation of Exchanges (‘WFE’). NYSE Euronext was acquired by Intercontinental Exchange Group Inc. (‘ICE’) on 13 November 2013. The NYSE is not a member of WFE as the WFE ceased to exist on or about 29 October 2013. Subsequently, Intercontinental Exchange, Inc., a subsidiary of ICE, became a member of a differently constituted company called The World Federation of Exchanges Limited. Intercontinental Exchange, Inc. was also previously a member of the entity previously known as WFE. In summary, therefore:

(a) WFE ceased to exist on or about 29 October 2013. From that date, section 4(2)(d) of the RLA could not operate and the Act applied; and

(b) alternatively, if the subsequent entity The World Federation of Exchanges Limited is to be read as WFE for the purposes of s 4(2)(d) of the RLA, then from 13 November 2013 the NYSE was not eligible to be a member of WFE. From that date, s 4(2)(d) of the RLA could not operate and the RLA applied to the Lease.

[31] It is not in dispute that the defendant is a subsidiary of its ultimate parent, Exxon Mobil Corporation, for the purposes of the Corporations Act 2001 (Cth) and s 4(2(d) of the RLA.

It is important to note that the Associate Justice did not make a finding that s 4(2)(d) of the RLA 2003 ceased operating on or about 29 October 2013, but left the question open as one of the two alternatives that had the same effect on the case before the Court.

Practitioners considering a lease to an overseas company (or the subsidiary of an overseas company) that was entered into before 12 August 2016 should be aware of this decision, as well as the other potential problems with s 4(2)(d) of the RLA 2003 discussed in my earlier post.