Corporate Veil Research Articles

Enhancing Corporate Accountability under the Criminal Code through Enforcing Corporate Social Responsibility

Domestic and international legislation and jurisprudence continues to recognize the prominent role that corporations play in, and the significant impact they have on, contemporary society. As a result, in Canada, corporations are subject to multifarious regulation and penalties for noncompliance, which traditionally result in substantial fines against corporate entities and, more rarely, piercing of the corporate veil to impose individual liability. However, it is widely recognized that those directly responsible for the offending behaviour often go unpunished, or that the fines and punishment are simply the cost of doing business. This approach to sentencing is of limited effect in curbing recidivism and promoting respect for the law and the maintenance of a just and safe society. In this paper, I seek to draw attention to and expand on the paucity of legal scholarship and jurisprudence considering whether greater emphasis on rehabilitation and corrective sentencing for corporate offenders under the Criminal Code would be more consistent with the legislated objectives of sentencing and good corporative citizenship. Ultimately, I take the position that a more principled approach to sentencing, which would utilize, for example, the existing probation and policy-making powers where appropriate, would result in more meaningful sentencing process and effective sanctions to combat corporate accountability and achieve corporate social responsibility in greater accord with the public interest. Part one of the paper outlines the purpose and objectives of sentencing under the Criminal Code of Canada and examines why a narrow approach of deterrence is not effective in achieving corporate accountability. Part two explains the concept of CSR and how it accords with the sentencing objectives and considerations for corporate offenders. Finally, part three provides practical examples of how CSR principles have and can be employed by courts to more effectively achieve corporate accountability.

L’« extension » de la clause compromissoire à des

The jurisdiction ratione personae of an arbitral tribunal has preoccupied legal theory and practice since many years; the discussion focuses nowadays on the existence of implicit consent to arbitration. Arbitrators, in view of deciding on their jurisdiction over a non-signatory, may directly apply certain specific legal concepts of a national law that imply consent, but more often than not they turn to an analysis of parties' conduct pragmatically examining all the factual elements and the surrounding circumstances of a particular case. By this process, they may conclude - on application of concepts akin to a règle matérielle of French origin - that a non-signatory has actually consented to arbitration or determine - on application of the theories of piercing the corporate veil and alter ego or better, on direct application of general principles of law - that a non-signatory should be considered as a real party to the arbitration. What is important is that arbitrators arrive at the conviction that the nonsignatory must be retained as a party to the arbitration and firmly establish all relevant reasons in their award. The risk, however, of an opposite conclusion of a national court at the stage of enforcement of the award cannot be excluded. The decision of the UK Supreme Court in the Dallah case, by which enforcement of the award against Pakistan was denied because according to French law there had been no "common intention" for Pakistan to be a party to the arbitration agreement, is a frustrating example of this risk from various angles, not limited to the conflict of this decision with the decision of the Paris Court of Appeal.

A Parent Company's Liability for a Subsidiary's Actions

Chandler v Cape suggests that parent companies may be confronted with new and expanded risks for the actions (or omissions) of their subsidiaries. This comment looks at the history of lifting the corporate veil before giving advice to business entities with group structures when dealing with this issue.

Piercing the Corporate Veil in China: Where Is It Now and Where Is It Heading

This Paper presents the results of the first comprehensive empirical study of China’s cases adjudicated under the statutory veil piercing regime introduced as part of the 2005 corporate law reform. It provides insights into the way Chinese courts have interpreted and applied the veil piercing doctrine, an area of law renowned for its complexity and uncertainty. Some comparisons are drawn between the results of this study and similar studies undertaken in common law jurisdictions, which served as a model for the new Chinese veil-piercing regime. The empirical findings are analyzed in an attempt to answer the question whether and how China’s veil-piercing law has fulfilled its stated mission, namely to protect creditors. A number of suggestions are offered with a view to improve its efficacy. The Paper also applies the interest-group theory to explain and project the development of China’s veil-piercing rules. The outcome of the research can be of considerable significance, especially to foreign lenders, business partners or investors in Chinese companies.

Corporate-Participant Liability for Direct Patent Infringement: A Look to Copyright Law’s Vicarious Liability Analysis

Under current Federal Circuit doctrine, district courts must “pierce the corporate veil” before holding corporate officers and shareholders personally liable for their corporations’ direct infringement under § 271(a) of the Patent Act. This Note traces the statutory and jurisprudential development of direct and induced patent infringement leading up to the Federal Circuit’s most recent discussion of its veil-piercing standard in the Wordtech case. It then examines the Federal Circuit’s veil-piercing doctrine, its criticisms, and the various proposals to remedy the current problems. This Note responds to the proffered solutions, and argues that adopting the vicarious liability doctrine from copyright infringement law is a more appropriate approach than the veil-piercing analysis and other alternatives for deciding corporate-participant liability under § 271(a). Accordingly, a court would impose liability where a corporate-participant has the right and ability to control the infringing activity and receives an obvious and direct financial benefit from the infringing activity. Vicarious liability is preferable because it does not have a scienter requirement, is not jurisdiction specific but rather applies universally, and targets omissions in addition to affirmative acts. In sum, the vicarious liability approach is consistent with the congressional intent behind the Patent Act and is a well-crafted tool to address the problems that frequently arise in patent infringement litigation.

Challenging the Limited Liability of Parent Companies: A Reform Agenda for Piercing the Corporate Veil

This article examines the liability of parent corporations within company groups in Australia, to determine whether the law needs to be reformed. It gives an overview of the theory behind limited liability and situations in which piercing the corporate veil is arguably justified. It then considers whether the veil should be pierced to impose liability on parent companies. It makes the case that fault should be the basis of liability, and it looks at examples of veil‐piercing laws overseas to determine whether any of them might provide an appropriate template for liability. Recent Australian initiatives are considered before making suggestions for reform.

Don't Touch that Dial! You Don't Know What You are Doing - Contractions in the Birth of a New World Order

Practical Procedural Focus: First world parent corporations create thinly capitalized third world subsidiary corporations and outsource to sub-contractors in order to externalize costs of doing business (pollution, accidents, defective products) onto third world populations. When and how may first world courts attribute liability to main-offices for the extraterritorial torts of their subsidiaries? Substantive Law Exposed: Laws in the EU and Member States which are similar to the U.S. Alien Tort Statute (e.g., Brussels Regulation I) and the U.S. Torture Victims Protection Act (e.g. Convention Against Torture). Synopsis: Universal civil jurisdiction is lawful under international law because States may do all things within their powers which are not prohibited by their treaty obligations or customary law to which they have not persistently objected ab initio. International law (CAT) and EU law (Brussels Regulation) as well as contemporary Romanist law (Actio Popularis, action civile, Adhasionsverfahren) permit civil claims for violations of various jus cogens rules. Describes the rise of private enforcement of individual human rights under international law. International human rights, initially purely hortatory norms, which were applicable - if at all - only to states have since become binding rules of international law which often entail private law claims, whether through direct effect or indirect horizontal (third party) effect (Drittwirkung). Contextualizes human rights rise as a needed reaction to the abuse of human rights as cause and pretext for war under the pre-war system of only mediate enforcement by states (usually through diplomatic protection and self help remedies). Describes currently valid rules of national, E.U., and public international law (C.A.T.) which entail, or can entail, private law enforcement of human rights. Reiterates the black letter U.S. common law of procedural defenses to extraterritorial jurisdiction and the rules U.S. common law rules of piercing the corporate veil.

Piercing the Corporate Veil: US Lessons for Romania & Slovakia

This article describes and analyses the doctrine of piercing the corporate veil. First it introduces this doctrine and its history and development in the United States - the jurisdiction which represents its. Second, it analyses its possible implementation within two chosen jurisdictions in Central and Eastern Europe: Romania and Slovakia. Authors’ aim is to assess their home jurisdictions and whether they apply the doctrine or only some parts of it or nothing at all. Authors go through different areas of the legal system, as company law, civil law or bankruptcy law and reflect on them. Finally, authors reason why this doctrine is of an importance to any legal system and why the legislators in CEE region should insert and apply it.

The Vodafone Tax Journey

The authors describe the Vodafone controversy in India, which involves the indirect transfer of an Indian company. The key principles enunciated in the landmark decision of the Supreme Court such as the difference between tax avoidance and tax evasion, the India-Mauritius tax treaty, lifting of the corporate veil, the need for judicial reforms and so on, as well as the impact of the decision are also analysed.

Research of Legislation and Practice for Piercing the Corporate Veil under New Companies Act in China

Pierce the corporate veil rules together with the company's independent personality constitutes a complete, rigorous corporate system. Pierce the corporate veil rules as part of a corporate system, and improve its position in the supplement, which is the balance between corporate interests of shareholders and creditors of the company's results. Pierce the corporate veil rules apply to particular legal relationship, it is by denying the company's independent personality behind the company investigated for abuse of corporate personality and limited liability of shareholders independent of the liability of shareholders. Make up the deficiencies inherent in the corporate system to protect the legitimate interests of creditors of the company. Pierce the corporate veil in order to achieve the value of the rules of fairness and justice, our country should be based on the theory from abroad. With China's judicial practice, judicial interpretation and give full play to the role of a typical case, a reasonable allocation of the burden of proof. Prudential rules applicable to pierce the corporate veil and do advance prevention. Try to avoid piercing the corporate veil applies the rules to further improve the new company law in China under the rule of piercing the corporate veil.

The Lifting of Corporate Veil Doctrine in Hong Kong: An Empirical Comparative and Development Perspective

This paper provides an empirical, comparative, and development perspective on the corporate veil doctrine. It contains a comprehensive survey of the corporate veil cases in Hong Kong. The survey results are then compared with comparable surveys of the US cases to highlight relevant characteristics in the Hong Kong courts' approach to the doctrine. The paper also analyses the doctrine and the limited liability principle in a development perspective to suggest that the Hong Kong courts should apply the doctrine more assertively to address externalization of corporate business costs, which is the inevitable consequence of limited liability.

Piercing the Corporate Veil in Taxation Matters

This article is the winning entry to the 7th Nani A. Palkhivala Research Paper Competition which was conducted by the All India Federation of Tax Practitioners. The authors comprehensively discuss the “piercing of the corporate veil” in the context of Indian tax legislation and jurisprudence.

Corporate Personality and Lifitng of the Corporate Veil

Corporate veil has been one of the most controversial subjects under corporate. Over the year, various judicial and legislative bodies have looked into the subject and have had differing and varied views. This paper will provide an understanding of the concept of corporate veil and will analyze how different Courts have interpreted this concept over the period of years. This paper then looks into various attributes of corporate personality and analyses each one of them. The paper along with explaining the characteristic feature of corporate personality also analyses when and why Courts can lift corporate veil. An analysis of reasoning of Courts is provided in the last part of the paper. This paper concludes by providing explanation on Statutory provisions under which veil of a corporation can be pierced.

Legal accountability of multinationals: the current state of play in the UK

FOCUS □ BUSINESSAND HUMANRIGHTS Legal accountability of multinationals: the current state of play in the UK I Whether lawyers jurisdiction may principle, courts States, Access on host inability be legal the the corruption, will intimidation, or State Canada to impeded home conveniens UK, forum applied to expertise justice Australia depends exercise to muster United courts State fund and non by or in in hostStatecourts maybe impeded by intimidation, corruption, or inability tofund lawyers ortomuster legalexpertise Whether homeState courts willexercise jurisdiction depends ontheforum non conveniens principle, appliedin theUK, United States,Canadaand Australia RICHARD MEERAN has been partner atLeigh Day since 1991 and represented the claimants in the cases referred to in this article Holding legally, oping country multinationals forharm operations arising ('MNCs') from used their to to account, be develan Holding legally, forharmarising from their developing country operationsused to be an almostimpenetrable challenge.However,over thepasteighteen yearsthere hasbeena progressiveimprovement inMNCvictims' access to justiceintheUK courts. Thisis consistent withthe growing recognition overthesameperiodofthe responsibility of businessto respectthehuman rights ofthoseaffected bytheir operations. That said,thegreat leap forward hastakena fewsteps backwards intheUK as a result ofthecombined effect ofrecent UK legislation on therecovery of costsincivilcasesanda changeinEuropeanlaw, whichhavepassedlargely undertheradar. The two keylegal obstacles Accessto justicein victims' local courtsmaybe impededby intimidation, corruption, or victims' invariable inability tofundlawyers andtomuster thelegalresources andexpertise necessary tolitigateagainsta well-resourced MNC. Access to adequate legal resources, more particularly lawyers whoareina position andwilling totake on complex,protracted and expensivelitigation, has resulted in victims filing claimsin theMNC homecourts wheretheMNCparent is based and overwhichthehome courtscan exercisejurisdiction . In thepastthisapproachhas been confronted bytwokeyobstacles. First, whether the home courtswill agree to exercisejurisdiction or halttheproceedings on thegrounds thatthevictims local courtsare the appropriate venueforthecase. Thisforumnon conveniens ('FNC') principleis applied by the courts ofcommon lawstates inparticular theUK, UnitedStates,Canada and Australia. It was an FNCapplication thatcaused thesevenand half thousandSouthAfrican asbestosminers'claims tobe bouncedup anddowntheUKcourt system for four yearsbyCape pic,purely on theissueof wherethecase shouldbe heard, before thelandmark ruling oftheHouse ofLordsintheir favour in 2000.Tragically, duringthatperiodapproximatelyone thousandof the claimantsdied. Thankfully, following a rulingof the European Court ofJustice in2005FNCisno longer an issue incasesagainst EU-domiciled defendants suchas UK-basedMNC parentcompanies.It is forthis reasonthatclaimssuchas thosebrought in2009 bythirty twoindigenous Peruvians, alleging that UK-registered Monterrico Metalspic was complicit intheir torture bythePeruvian police,have beenable toprogress without lengthy and costly disputes overvenue. Secondly,it is universally difficult, legally,to 'piercethecorporate veil'thatprotects a shareholder (such as an MNCparentcompany)from liability forthe conductof othercompaniesin whichitinvests (inthecase ofa multinational, its overseassubsidiaries). This 'corporate veil' has beenusedtoprotect theheadoffice parent company , and MNC group structures have been devised accordingly. Of course,the degreeto whichan MNCparent company controls orinfluences its worldwideactivities variesfromone MNC groupto another, but an MNC parentis rarelya mere 'hands-offshareholder. In an attempt tocircumvent thecorporate veilobstacle ithasbeenarguedina seriesofcasesthat theliability oftheMNCparent arisesnotbyvirtue ofits shareholding inthesubsidiary butrather because ofa breachofa legal'duty ofcare'.Thisdutyis allegedtoflowfrom thenature oftheMNCparent 'srelationship withanddegreeofcontrol over relevant functions ofthesubsidiary andtheharm that itoughttohaveforeseen might arisefrom its subsidiary's activities. Usingthisapproach,the liability oftheMNCparent isbaseddirectly on its own conductand functions rather thanforthe conductofitssubsidiary. Parentcompany 'dutyofcare' In theThorChemicals litigation (1994-1997 and 1997-2000)itwas allegedthatthreedeathsand numerous seriouscases ofmercury poisoning at Thor'sKZNfactory hadresulted from theUKparent 's negligencein designingand exporting unsafetechnology to SouthAfrica and in failing tosupervise andmonitor health andsafety atthe factory adequately. Thefirst waveoftwenty cases was settled for£1.3million andthesecondwave of twenty was settledforan undisclosedsum within weeksoftrial. A claim broughtagainstRio Tinto pic by EdwardConnelly,a Scottish workerwho had contracted throat cancerallegedly from dustduring his workat the RössingUranium minein Namibiaalleged thatthe London parenthad devised the Namibiansubsidiary's policy on health,safety and theenvironment, and thatits employeeshad supervised health, safety and/or environmental protection at the mine. Having won on jurisdiction intheHouse ofLords(1997) theclaimwas struck outon timebargrounds. The centralallegationin the Cape pic case (1996-2003)was thatthe London-based parent hadbeenineffective control oftheSouthAfrican miningoperationsin particular withregardto healthof miners, dustcontrol in theworkplace and intothe local environment. It was alleged thatepidemicscale of asbestosisin theminers and of mesothelioma in theminers and people living intheimmediate vicinity was theresult of theparent's failure to carry outitsfunctions toa reasonable standard.Followingits jurisdiction INTERNATIONAL union rights Pa9e 18Volume 19Issue 4201 2 FOCUS □ BUSINESS ANDHUMANRIGHTS defeat, Cape picranintofinancial difficulties and the litigation had to be settledbeforetrialfor approximately£10.5million. In thelitigation againstMonterrico Metalspic (2009-2011)referred to above...

Corporate Veil Piercing: A Proposal for Mexico

This article uses an Economic Analysis of Law approach to propose the adoption of the doctrine of corporate veil piercing in Mexico. This study not only recognizes the economic benefits of limited liability for society, but also identifies the incentives it creates for shareholders to abuse of the corporate form by using the corporation to unduly appropriate a corporation’s assets at the expense of the corporation’s creditors. On this basis, the article describes the American equity doctrine of veil piercing that courts apply in order to reach shareholders’ assets in cases of fraud or misconduct against the corporation’s creditors. Finally, the paper describes the current legal framework in Mexico and proposes the adoption of corporate veil piercing in the Mexican legal system.

The Doctrine of Limited Liability and the Piercing of the Corporate Veil in the Light of Fraud: A Critical Multi-Jurisdictional Study

The Doctrine of Limited Liability and the Piercing of the Corporate Veil in the Light of Fraud: A Critical Multi-Jurisdictional Study

Levantamiento Del Velo Corporativo Latinoamericano: Aspectos Comparados Con El Derecho Estadounidense (Piercing the Corporate Veil in Latin America: Comparative Aspects with U.S. Law)

The article examines the history and uses of the piercing the corporate veil doctrine in the United States. It identifies the doctrine’s main elements, and highlights the different theoretical components of its application by U.S. courts. The study then analyzes how the veil piercing theory has been received in Latin American civil law jurisdictions. The article does not purport to provide an exhaustive review of the veil piercing doctrine in the United States, but only to identify its main expressions in order to present an analytical framework for comparative law purposes.

The Lifting of Corporate Veil Doctrine in Hong Kong: An Empirical, Comparative and Development Perspective

This paper provides an empirical, comparative, and development perspective on the corporate veil doctrine. It contains a comprehensive survey of the corporate veil cases in Hong Kong. The survey results are then compared with comparable surveys of the US cases to highlight relevant characteristics in the Hong Kong courts' approach to the doctrine. The paper also analyses the doctrine and the limited liability principle in a development perspective to suggest that the Hong Kong courts should apply the doctrine more assertively to address externalization of corporate business costs, which is the inevitable consequence of limited liability.

LEVANTAMIENTO DEL VELO CORPORATIVO: SENTENCIA DE LA CORTE SUPREMA DE 2 DE JUNIO DE 2009 (ROL N° 1527-2008)

we are going to analyze a decision from the Supreme Court that upheld and applied the theory of piercing the corporate veil. Even though the case presents certain special features and the decision is not precise enough with regards to both scope and standards of the technique for lifting the veil, it constitutes an interesting precedent for future decisions on the subject which might accept in a more plentiful and rigorous way the referred theory.

The Corporate Veil Doctrine Revisited: A Comparative Study of the English and the U.S. Corporate Veil Doctrines

This Article undertakes a comparative study of corporate veil piercing doctrines under U.S. corporation and English company law. The Article highlights some fundamental differences between the doctrines in terms of jurisprudential approaches, treatment of specific case types, and other related issues. The Article demonstrates that despite these substantial differences, many English corporate veil cases in fact share a similar analytical approach to the instrumentality doctrine under U.S. law. There-fore, it is possible to construct an English instrumentality doctrine that will bring structure and clarity to the English corporate veil doctrine. The Article concludes with a revival of the much-maligned single economic unit theory, first propounded by Lord Denning. This reformulated theory will provide a more systematic approach to veil piercing cases involving corporate groups.