National law university odisha corporate law I national law university odisha
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| Exclusive Motors Pvt Ltd v Automobili Lamborghini [2014] 121 CLA 230 (CAT. 38 Sodhi Transport Co v State of Uttar Pradesh AIR 1986 SC 1099. Case Ci Viho Europe BV v Commissionn of the European Communities [1996] ECR I (EU. Case 66/86 Ahmed Saeed Flugreisenand Silver Line Reisebüro GmbH v Zentrale zur Bekämpfung unlauteren Wettbewerbs [1989] ECR I (EU. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii economic unit within which the subsidiary had no real freedom to determine its course of action on the market. The Competition Commission of India in the case of Shamsher Kataria 42 held that an internal agreement/arrangement between an enterprise and its group, parent company is not within the purview of the mischief of section 3(4) of the Act. The Commission noted that the exemption of single economic entity stems from the doctrine of inseparability of the economic interest of the parties to the agreement. It held thus generally, entities belonging to the same group e.g. holding-subsidiaries are presumed to be part of a single economic entity incapable of entering into an agreement.” 43 In the case of National Insurance Co. Ltd 44 , one of the issues decided by the Commission was whether the public sector insurance companies constituted a single economic entity. It was argued that until 2002, all National insurance companies were owned by General Insurance Company and pursuant to the enactment of the General Insurance Business Nationalization) Amendment Act, 2002, Government of India held 100% shares of each of the insurance companies and controlled the management and affairs of the companies through Department of Financial Services (Insurance Division, Ministry of Finance. It was finally held by the Commission that pursuant to the recommendations of the Malhotra Committee, two major regulatory changes will be introduced in 1993, including, ending the monopoly of General Insurance Company in the general insurance business and ending the control exercised by General Insurance Company over its four wholly owned subsidiaries, i.e., the four public sector insurance companies Furthermore, it was observed that These regulatory changes will usher into allow the public sector insurance companies to act independently and to compete with the private players to offer better services to consumers Further, even though the public sector insurance companies are presently under the overall supervision of the Central Government, all decisions relating to submission of bids, determination of bid amounts, business sharing arrangements, etc. will betaken internally at company level without any ex ante approval/directions from Ministry of Finance. 41 Voltas Limited v Union of India AIR 1995 SC 881. 42 Shamsher Kataria v Honda Seil Cars India Ltd And Ors 2014 Comp LR 1 (CCI). 43 Shamsher Kataria v Honda Seil Cars India Ltd And Ors 2014 Comp LR 1 (CCI). 44 Government of Kerela v National Insurance Co Ltd 2012 Comp LR 2 (CCI). NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii The Commission, (in a slight deviation from its own stand in Exclusive Motors-Lamborghini) held that the conduct of the insurance companies in relation to the RSB Y/CHIS tenders issued by the Government of Kerala during the period between 2010-11 and 2012-13 were based on their own volition and the Ministry of Finance had no role to play. On this basis, the Commission held that the Ministry of Finance did not exercise any de facto or de-jure control over their business decisions. As such, they cannot be said to constitute a single economic unit. In the case of Arshiya Rail v. Ministry of railways 45 and container corporation economic oneness or single economic entity was used in the context in deciding the dominance of the company in the relevant market. In the case, the commission held that for determining dominance in the relevant market, the strength or the market share of the parent company which is working indifferent markets will not be used to determine the strength of its subsidiary in another relevant market. Hence, this case cleared the juxtaposition of parent- subsidiary relationship in relation to the strengthening of relevant market. 45 Arshiya Rail Infrastructure Ltd v Ministry of Railways [2013] 119 SCL 364 (CAT. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii bCONCLUSION In light of the above, it can be observed that it is very common for companies within a group to be closely associated. In some cases, there may exist some form of overlapping in the management or the unity in operations of the companies. However, this very fact in itself cannot lead to the conclusion that they maybe considered as one single legal entity. Instead, each and every company is considered in law to have its own separate legal existence and personality. The position in the jurisdiction of Singapore, a colonial jurisdiction, that has evolved into one of the most modern and progressive jurisdictions provides some clarity in this regard. In 2014, the High Court of Singapore in its decision in a case addressed the exact issue being a question as to whether there is a legal principle that treats some companies as having the same corporate personality on the grounds of being a single economic entity In the said case, the Singapore Court indulged in an analysis of international cases and analysed the single economic entity concept to a multidirectional version of the piercing the corporate veil doctrine. Thus, under the laws governing companies a company is considered to be a separate legal entity distinct from its holding / parent company. However, the doctrine of piercing the corporate veil provides an exception to the rule and the courts use this exception in order to penalise companies. On the other hand, the antitrust laws validate the single economic entity doctrine where entities within the same group maybe considered as one for the purposes of claiming advantage from scrutiny of competition regulators. Therefore, in conclusion , it is stated that the application of the doctrine of single economic entity vis-à-vis the corporate separateness doctrine is a grey area yet and it is still a question of law as to whether one or both of these doctrines can be applicable to a given set of facts. NATIONAL LAW UNIVERSITY ODISHA CORPORATE LAW Ii bBIBLIOGRAPHY Download 0.88 Mb. Share with your friends:
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