The Law governing piercing of corporate veil in transnational cases
We could see from the example above there are a number of methods of piercing. And…
So which law to apply in case of transnational cases which involve parent-subsidiary…
First of all, if corporate group law exists it may be applied mandatorily (loi de police).…
We started this section and even this article from the notion on “legal personality”.…
Suggesting that secondary establishment is recognized in the Member State of the…
Looking through our examples in the beginning of this section, we may start from…
a) Torts. In the first example we considered a tort vis-à-vis creditors; a false appearance of creditworthiness was created with the knowledge and support of the parent company. The latter is a substance of the tortuous act committed by a parent company in the place of subsidiary’s location- lex loci delicti/damni. As…
b) Directors’ liability may be governed in different ways depending on the case. If directors-parents violate the rules of company law, we make reference to company law. It is submitted that a director-parent company acting as a director of a subsidiary should respect the lex societatis of…
From the point of view of rights of third parties suffered, lex societatis of subsidiary will…
In case of bankruptcy again, the choice-of-law depends on the violation substantive…
The main point is that if the rule giving rise to liability is a rule of a company…
Regarding bankruptcy proceedings it is also important to stress that lex concurus is…
As an example of the important fact that lex concursus governs issues of veil…
c) Voluntary piercing is only applied if it is allowed in the legislation. The legislation supposedly that one of the lex societatis of…
d) For the Identification we would repeat: When application of legal norm of the subject matter or contractual rule of the main obligation doesn’t explicitly refer to legal persons, it is deemed that two legal persons concerned have different
Now we can turn for some examples in common law. …
a) We assume that principles of applicable law for Fraudulent and Wrongful Trading will…
b) Abuse of company name in our example in the UK is concerned with the provisions of Insolvency Act, so in that case liabilities for shadow directors is specified by the bankruptcy law of the lex concursus,…
c) Other types of directors’ liability may be for the breach of general duty…
d) Common Law Exceptions to Limited Liability constitutes judicial piercing. In the case Adams v Cape Industries…
e) We will complete our overview of the examples given above with one the most typical…
Because the underlying idea of this type of judicial piercing is that shareholders…
As we are talking about abuse of legal personality of the subsidiary, this is likely…
The lex loci actus may be taken into account (as a matter of fact for ascertaining liability) in cases of abuse of legal personality if it is necessary to measure the fault of the parent company in tort or if it is necessary to appreciate the civil consequences of parent’s actions.…
So, the lex loci actus have only alternative role (as a connecting factor) to the lex societatis when…
When liability derives from a personal fault on the part of the parent company, either…
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