National law university odisha corporate law I national law university odisha
on the other hand, it was blatantly rejected by the House of Lords in the case of Woofson v. Strathclyde Regional Council
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- Adams v Cape Industries Plc. 18
| 14 on the other hand, it was blatantly rejected by the House of Lords in the case of Woofson v. Strathclyde Regional Council 15 which doubted the aspect of the Courts application of the principle in the DHN case. Generally, the courts in the English jurisdiction have shown astringent determination of not embarking any such development in this area. In the case of Adams v Cape Industries plc 16 ,it was noted by Slade LJthat: “There is no general principle that all companies in a group of companies are to be regarded as one. On the contrary, the fundamental principle is that each company in isa separate legal entity possessed of separate legal rights and liabilities.” 10 Knight Ltd v Birmingham Corp [1939] 4 All ER 116. 11 Woolfson v Strathclyde Regional Council [1979] 38 P & CR 521 HL. 12 Adams v Cape Industries plc [1990] BCLC 479. Supra 7. 14 DHN Food Distributors Ltd v Tower Hamlets LBC [1976] 3 All ER 462 at 467 CA. 15 Woofson v Strathclyde Regional Council [1979] 38 P & CR 521. 16 Adams v Cape Industries plc [1990] BCLC 479 at 508. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Iii Counsel suggested beguilingly that it would be technical for us to distinguish between parent and subsidiary company in this context economically, he said, they were one. But we are concerned not with economics but with law. The distinction between the two is, in law, fundamental and cannot here be bridged.” The Challenges to the famous doctrines of separate legal personality and limited liability at common law tend to raise more fundamental challenges to these doctrines, because they are formulated on the basis of reasons for not applying them, such as fraud, the Company being a sham or facade, that the company is the agent of the holder, that the companies are part of a Single economic unit. However, the courts seem, if anything, more reluctant to accept arguments against the doctrines than arguments based on particular statutes or the terms of particular contracts. The landmark casein this regard is Adams v Cape Industries Plc. 18 This case brought up the issues in a sharp fashion. It was concerned with the liability in a group of companies and the very objective of the claim to ignore the distinct and separate legal personality of the subsidiary was to conclude the parent company liable for the acts of the subsidiaries towards involuntary tort victims. The main question before the Court to decide was whether judgments obtained In the United States against Cape that was an English registered company who was involved in the business of mining asbestos in South Africa and marketing it worldwide, would be recognised and enforced by the English courts As there was no presence of any submission to the foreign jurisdiction on Cape’s part, this solely depended on whether Cape could be said to have been present in the United States. On the facts of the case, the answer to this question was based upon whether Cape could be said to be present in the United States through a company (CPC) with which it had close business links or through its wholly owned Subsidiaries. All the arguments of Cape were rejected by the Court and thus sought to hold Cape liable. One of the arguments was that of a Single economic unit. Download 0.88 Mb. Share with your friends:
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