Presentation on theme: "IBSR Topic 21 Topic 2: Legal Responsibility of Transnational Corporate Groups is Parent liable for acts of Subsidiary? under Home or Host country law?"— Presentation transcript:
IBSR Topic 21 Topic 2: Legal Responsibility of Transnational Corporate Groups is Parent liable for acts of Subsidiary? under Home or Host country law? can TNC choose its preferred legal system? is TNC exposed to multiple jurisdictions? International Business Structures & Regulation Sol Picciotto Law School
IBSR Topic 22 Transnational Corporations simplified Parent A State X Home State Y Host branch Subsidiary A-1 State Z Host?
IBSR Topic 23 National Jurisdiction over Companies Territorial where acts take place; constituent elements: sales? where effects felt residents: place of central control / management Nationality state of incorporation / residence / central HQ Prescriptive jurisdiction: claim to regulate Enforcement jurisdiction: power to sanction location of assets markets: products; capital - Sarbanes-Oxley Act visits by directors
IBSR Topic 24 Overlap, Conflict or Choice of Jurisdiction? Firm Liable under Laws of state of incorporation (nationality) residence (nationality/territory) place where it does business (territorial) Business Abroad via Subsidiary Host jurisdiction over Parent? Home jurisdiction over Subsidiary? Obedience to Local Law Home state standards higher? Does Overlap Entail Conflict?
IBSR Topic 25 Jurisdictional Coordination Civil: Conflicts of Law Choice of forum: rejection if non conveniens Choice of Law: contractual? Judicial Assistance: Jurisdiction & Judgments: Brussels (EU), Hague Service of Process Taking of Evidence Arbitration: enforcement of awards Criminal / Penal Extradition: double criminality
IBSR Topic 26 Coordination of Regulatory Laws e.g. c ompetition, corporate, labour, consumer, tax higher standards, no conflict? National Treatment in Host State harmonisation? Mutual Assistance in enforcement
IBSR Topic 27 Civil Jurisdiction: Liability to be Sued Right to Sue Defendant within jurisdiction Present/doing business: at least branch/office UK: may add foreign defendant if necessary to case: Gillette Forum non conveniens dismissal if other forum more suitable for parties & justice: UK: Spiliada, Lubbe no deference for foreign plaintiffs, US: Piper must show other forum inadequate - Bhopal Brussels (Hague) Jurisdiction & Judgments Convention allocates appropriate jurisdiction other member states must enforce
IBSR Topic 28 Can Parent be Sued? Vicarious Liability lifting the `corporate veil’? Subsidiary as mere Agent of Parent? Direct Liability was Parent involved in the activities Presumption for or Against? separate legal personality involvement based on central control? Amoco Cadiz
IBSR Topic 29 Liability under Home State Law What is Basis of Parent’s Liability? Right to Sue Parent? Forum non conveniens? is Host state more suitable forum (UK) is Home state better forum (US)
IBSR Topic 210 Bases of Liability - 1 Tort: breach of legal duty duty of care - negligence infringement of (intellectual) property rights breach of statutory duty US: Alien Torts Claims Act US corporations actions abroad Actions contrary to international law
IBSR Topic 211 Bases of Liability 2: Contract Who is Liable? Party to Agreement Is Parent party to contract? Guarantor? Was Subsidiary Agent? Did Parent provide Guarantee Letter of Comfort Choice of Law/Forum?
IBSR Topic 212 Bases of Liability 3: Regulatory Duties Who is Liable & for What Bribery of Foreign Official payment made by Agent/Employee of Subsidiary Parent/Principal knows/approves of payment complicity: aiding & abetting/conspiracy? Restrictive Business Practices anti-competitive agreements (cartels) abuse of dominant position