Current thinking on piercing the corporate veil

Transcript:Current thinking on piercing the corporate veil:
Current thinking on piercing the corporate veil and obtaining relief against non-parties Talk by Duncan Matthews Q.C. and Charlotte Tan 20 Essex Street 17 June 2013 Introduction Expansionist approach: freezing injunctions against cause of action defendants Restrictive approach: Chabra juridiction; The Mahakam [2012] 2 All ER (Comm) 513 Piercing the corporate veil; VTB v Nutritek [2013] 2 W.L.R. 398 and Petrodel v Prest [2013] UKSC 34 Expansionist approach: freezing injunctions against CAD defendants Freezing injunctions: “one of the law’s two nuclear weapons”: per Donaldson LJ, Bank Mellat v Nikpour [1985] F.S.R. 87 at 92 “we live in a time of rapidly growing commercial and financial sophistication and it behoves the courts to adapt their practices to meet the current wiles of those defendants who are prepared to devote as much energy to making themselves immune to the court’s orders as to resisting the making of such orders on the merits of their case”: per Lord Donaldson, Derby v Weldon (Nos 3 and 4) [1990] 2 Ch 65 at p77 “international fraud is nowadays of growing concern in the international community – if anything it has grown in recent years”: per Patten LJ, BTA v Solodchenko [2011] 1 WLR 888 at [53] Expansionist approach: freezing injunctions against CAD defendants BTA v Ablyazov [2009] EWHC 2840 (Comm) Continuation inter partes of Freezing Injunction obtained ex parte, including continuation of passport retention following Bayer v Winter [1986] 1 WLR 497. BTA v Ablyazov [2009] EWHC 3267 (Comm) Defendant restrained from dealing with any of his assets worldwide, even in excess of the amount of the claim (plus interest and costs), if his assets in England and Wales are less than the amount of the claim. BTA v Ablyazov [2010] EWHC 1779 (Comm); [2010] EWCA Civ 1141 Imposing receivership in aid of Freezing Order; continuing passport retention order in aid of Freezing Order; restricting the scope of the ordinary course of business permission. BTA v Ablyazov [2010] EWHC 2219 Disclosure order in support of Freezing Order may extend to information leading to the identity of further wrong-doers (even if the Defendants and/or those further wrong-doers are in another jurisdiction) and may be backed with debarring unless order even if the Freezing Order is subject to jurisdictional challenge. Expansionist approach: freezing injunctions against CAD defendants BTA v Solodchenko [2011] 1 WLR 888 Freezing Order can extend to assets where Defendant holds legal but not beneficial