Legal aid oyo journal of legal issues vol. 1, Issue 1, 2017


StoczniaGdanska SA v Latvian Shipping Co and others) C.P.L.R. 65



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THE SALOMON PRINCIPLE OF WHAT RELEVANCE
Company Law Notbeook
StoczniaGdanska SA v Latvian Shipping Co and others) C.P.L.R. 65where it was argued that to find a parent company liable for inducement merely on the grounds of the fact that it controlled a subsidiary would be to unfairly deny the parent of the protection in
Salomon v Salomon & Co Ltd. The Court agreed. The simple fact of control did not justify the Court in reaching the conclusion that the directors of the subsidiary performed like automatons and treated requests as if they were instructions to be carried out without question. The subsidiary was a separate legal entity and to make another presumption would mean that the principles underpinning the separate incorporation of the subsidiary would have to be ignored. In the final analysis the Salomon principle was upheld the subsidiary was deemed to be a separate legal entity distinct from its ultimate parent.
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From the foregoing, the trend that seems to have been established by the courts in applying the Salomon principle is that where an argument of mere sham or “façade”, agency or fraud cannot be imputed, the court is predisposed to maintaining the veil as in Adams V Cape (supra however, where these factors upon consideration of the peculiar facts of a case Did company law benefit from the decision of the House of Lords - http://www.lawteacher.net/company- law/essays/
December 17, 2014 at 11:57 am


LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017.
111 can be said to exist, the courts in lifting the veil as in Jones v. Lipman (Supra) would not hesitate in stripping a company of its corporate defense established in Salomon (Supra)

CONCLUSION
After examining the origin, consequences and trends in the application of the principle espoused in Salomon V Salomon, the question remains – is it relevant to today‟s business world I am of the view that yes it is as the advantages the corporate vehicle aided by the principle espoused in
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