12 Jun 2013. Nicholas Grier. ', accessed 20th February 2017, Akzo Nobel NV v Competition Commission [2013] CAT 13, Antonio Gramsci Shipping Corp & ors v Aivars Lembergs [2013] EWCA Civ 730, DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852, Lazarus Estates Ltd v Beasley [1956] 1 QB 702, Prest v Petrodel Resources Ltd UKSC 34, [2013], Trustor AB v Smallbone (No 2) [2001] EWHC 703, VTB Capital plc v Nutritek International Corp [2013] UKSC 5, Woolfson v Strathclyde Regional Council [1978] UKHL 5, [1] Prest v Petrodel Resources Ltd UKSC 34, [2013], [2] Spear's, 'Expert analysis of the Prest Judgement (Spear's ,11 June 2013) accessed 8th March 2017, [3] French D, Mayson S & Ryan C, Company law (31st edn, OUP) 127, [6] Lowry J, and Arad Reisberg, Company Law & Corporate Finance (4th Edn, Pearson) 35, [7] Woolfson v Strathclyde Regional Council [1978] UKHL 5, [8] Lazarus Estates Ltd v Beasley [1956] 1 QB 702, [11] Woolfson v Strathclyde Regional Council [1978] UKHL 5, [15] Trustor AB v Smallbone (No 2) [2001] EWHC 703, [19] Birds J, Boyle Clark B et al, company Law (9th edn, Jordan Publishing) 60, [25] Alistair Alcock 'piercing the veil- A dodo of a Doctrine (2013) 25 denning LJ 241,243, [26] Pey Woan Lee, 'The Enigma of Veil- Piercing' (2015) 26 (1) ICCLR 28, 30, [28] Prest [69] (lord Neuberger) Alistar Alcock (n 18) 250, [32] Piercing the corporate veil in the family division: Prest- the latest from the court of appeal- Trust and Trustees (2013) 19 (2) 137, [33] Piercing the corporate veil in the supreme court (again)- The Cambridge Law Journal, 72 [2013] 511-515, [35] Pennyfeathers limited v Pennyfeathers property company limited [2013] EWHC 3530 (Ch), [37] DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852, [38] Antonio Gramsci Shipping Corp & ors v Aivars Lembergs [2013] EWCA Civ 730, [40] VTB Capital plc v Nutritek International Corp [2013] UKSC 5, [41] Bull S, 'piercing the corporate veil in England and Singapore' [2014] Heinonline 39,39, [44] Mujih E, 'Piercing the corporate veil as a remedy after Prest V Petrodel resources Ltd: Inching towards Abolition' [2016] Westlaw 17,17, [45] Akzo Nobel NV v Competition Commission [2013] CAT 13, [46] Simon McLeod- 'The Corporate Veil And Its Piercing As Clear As? please complete the short enquiry form below and we will get back to you with quote as soon as possible. Neutral citation number [2013] UKSC 34. It will present the view the Law Lords had of the “doctrine” to show it was not clear. This could perhaps create more clarity in the sense that decision makers would know what is not meant to be included in the doctrine. Other related documents. The relatively short and significant judgment in the Supreme Court case of Prest v Petrodel Resources Ltd has gathered vociferous interest from academics and practitioners. Piercing the corporate veil refers to putting aside the separate personality of the company to hold a person who owns and controls a company as responsible for the actions of the company as if it were their own. Facts. This article will critically evaluate the significance of the Prest v Petrodel Resources Ltd[1] decision in light of the corporate veil doctrine. Business & Employment Law lecture 1 notes Company LAW - Lecture Notes I. More recently, in Akzo Nobel[45] in its arguments had suggested that the Competition Commission had tried to attribute the activities of the subsidiaries to Akzo Nobel which was in effect piercing the corporate veil.[46]. Could this perhaps suggest that it is better to abandon the doctrine as a whole rather than to try and figure out what the principle actually proposes to do. Prest v Petrodel Ltd [2013] EWCA Civ 1395 Facts The parties were married in 1993. [28] He observed that there is no English case which unequivocally underpinned a power to lift the veil[29]; however, recognition is given to a limited power as a valuable judicial tool to undo wrongdoing in cases where no other solution exist'[30] It gives the impression that every judge will come up with a new principle every now and again which would be relied upon but then a couple of years after, a new judge will find criticism in the doctrine. As Lazarus[8] explained “no court will allow a person to keep an advantage which had been obtained by fraud”[9] This principle underpinned all of the early attempts to pierce the veil meaning that the court will not allow a corporate personality to be used to protect individuals from wrongdoing. This could create further confusion as to what the doctrine of piercing the corporate veil originally intended to do. Case ID. It can be contended that the doctrine is there but, no one has yet connected the dots to see the full picture of what it entails. For the past 30 years orders have been made against the assets of a company that are considered to be the alter ego of a spouse to satisfy a capital award made by the court in respect of the other spouse.1In 2012 the Court of Appeals ruling in Petrodel Resources Ltd & Ors v Prest & Ors2set a new precedent stopping an ex-wife being able to investigate a company’s assets when she believes her husband has concealed assets within that company. [23] Contrarily, the evasion principle applies where a person is under an existing legal obligation which he deliberately evades by interposing a company under his control. This was contrasted with Lord Mance and Lord Walker who are very much in favour of keeping the doctrine. The decision shows that an application of company law principles is required when determining the ownership of those assets. The relatively short and significant judgment in the Supreme Court case of Prest v Petrodel Resources Ltd has gathered vociferous interest from academics and practitioners. Mrs Prest’s appeal against the judgment of the Court of Appeal that seven properties in London owned by the Petrodel group of companies are not properties to which the sole controller of the group is ‘entitled, in Moreover, another approach could be piercing the veil by removing limited liability towards involuntary creditors, notably tort victims. Published Date: 28 Jul 2017 INTRODUCTION Rogers AJA in a New South Wales case commented "there is no common, underlying principle, which underlies the occasional decision of the courts to pierce the corporate veil". However, these cases are and will remain exceptional. Thus, even if it is given its quietus, the doctrine would still be there transparently. It was held that a limited company was viewed “like any other independent person with its right and liabilities appropriate to itself”[5] The Salomon principle has been the foundation on which company law and business corporations have thrived on for years. Company. For more details, view our copyright notice. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of EssayCompany. It was of key interest as it was a legal cross over between family law and company law. Disclaimer: This essay has been written and submitted by students and is not an example of our work. It can be contended that, even if the doctrine is given is quietus, judges would still apply the principles of piercing the veil unknowingly. Prest v Petrodel raises issues about what structures can be utilised and Akzo Nobel in what structures companies can establish notwithstanding that such structure are common place. Furthermore, there could be an extension which established distinct body rules for corporate groups such as in Germany. It was Lord Sumption in Prest v Petrodel Resources who recognised that there is a limited power to pierce the corporate veil exceptional cases when it is deemed necessary to do so. As stated above, Lord Neuberger, Lord Clarke and Lady Hale were not entirely convinced on the validity of the doctrine and seeing it as merely a metaphor which was unclear and inchoherent. 03 October 2013. [16] Hence, this suggests that there is no clear structure to be followed. [48] However, it can be contemplated that slightly narrowing a doctrine which Supreme Court judges do not agree with does not mean that it is progressive. The whole concept of lifting the veil was derived from Salomon v Salomon[4] where corporate veil was established. More importantly, the HL emphasised that “it is only appropriate to pierce the corporate veil where the circumstances indicate that the company is merely a façade concealing true facts. … She asked the court to lift the corporate veil and treat her ex-husband and the companies as being effectively the same. By V. Niranjan. We're here to answer any questions you have about our services. Get in touch with our dedicated team to discuss about your requirements in detail. Study for free with our range of university lectures! The relatively short judgment in the United Kingdom Supreme Court case of Prest v Petrodel Resources Ltd1 (herein, Prest) has garnered vociferous interest from academics and practitioners. It seems that the judges only deal with these when and how it comes. This was because 'references to a façade or sham beg too many questions to provide a satisfactory answer"[20] He attempted to give an explanation; He stated that the veil would be restricted to two principles: the concealment principle and the evasion principle. 4 Prest v Petrodel Resources Ltd and others [2013] UKSC 34. Hence, this further indicates that there are still many uncertainties within the doctrine itself. Law. This could perhaps create more clarity in the sense that decision makers would know what is not meant to be included in the doctrine. [19] A new provision on how the doctrine should be established was brought in Prest. Summary The paper seeks to critically analyse the Supreme Court’s decision in Prest (Appellant) v PETRODEL Resources and others (respondent) UKSC 34. In an action for ancillary relief the husband argued that properties could not be transferred to the wife as they were legally owned by various companies. Appeal allowed unanimously. Similarly, Lord Sumption explains piercing the corporate veil means "disregarding the separate personality of the company"[10] Moreover, as per Lord Keith in Woolfson,[11] he states "it is appropriate to pierce the corporate veil only where special circumstances exist"[12] Consequently, right from the onset, there were conflicting views. However, these cases are and will remain exceptional. No plagiarism, guaranteed! 44 Stockin (n43) 365. The relatively short judgment in the United Kingdom Supreme Court case of Prest v Petrodel Resources Ltd1(herein, Prest) has garnered vociferous interest from academics and practitioners. In Prest v Petrodel Resources Ltd [2013] UKSC 34, the UK Supreme Court has recently reviewed the English law in this area, concluding that the Court has … [16] Hence, this suggests that there is no clear structure to be followed. It can be thus shown, that not much has changed and the decision makers are still unsure as to when the doctrine can be applied. It was of key interest as it was a legal cross over between family law and company law. [24] However, despite the two approaches being somewhat clear; Lord Alcock observes that "care must be taken because none of the other six justices of the Supreme Court agreed with Lord Sumption without some qualifications"[25] He also points out that there is substantial uncertainty surrounding the operation of the evasion principle. This further shows that we are no closer to an answer of lifting the corporate veil. - Trust & Trustees (2013) 19 (9):877, J McDonagh, 'Piercing the corporate veil in the family division: Prest- the latest from the court of appea'l- Trust and Trustees (2013) 19 (2) 137, J Payne 'Lifting the corporate veil: A reassessment of the fraud exception' Cambridge law Journal, 56 (2) July 1997, Mujih E, 'Piercing the corporate veil as a remedy after Prest V Petrodel resources Ltd: Inching towards Abolition' [2016] Westlaw 17,17, Pey Woan Lee, 'The Enigma of Veil- Piercing' (2015) 26 (1) ICCLR 28, 30, Spear's, 'Expert analysis of the Prest Judgement' (Spear's ,11 June 2013), Tan Cheng-Han, 'Veil piecing- a fresh start' (2015) 1 JBL, Spear's, 'Expert analysis of the Prest Judgement (Spear's ,11 June 2013) accessed 8th March 2017, Simon Mcleod- 'The Corporate Veil And Its Piercing As Clear As? Here to help echoed to this day in Prest facts the parties were married in 1993 Analysis. 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