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Chandler v. Cape: An alternative to piercing the corporate veil beyond Kiobel v. Royal Dutch Shell

Palombo, Dalia (2015) Chandler v. Cape: An alternative to piercing the corporate veil beyond Kiobel v. Royal Dutch Shell. British Journal of American Legal Studies, 4 (1). pp. 453-471. ISSN 2049-4092

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Abstract

For over a century, since the case of Salomon v. Salomon, litigators have attempted without success to pierce the corporate veil of corporations in order to sue the holding companies for the torts committed by their subsidiaries. However, Salomon v. Salomon is still good law and the concept of separate legal personality is established all over the world. Recently, United States litigators have attempted to establish a cause of action based on a combination between common law torts and the violation of customary international law. However, this approach too has been unsuccessful. In Kiobel v. Royal Dutch Petroleum, the Supreme Court of the United States ruled against holding the multinational corporation liable for the violation of customary international law committed by its subsidiary. The current issue is what strategy human rights litigators might adopt in front of United Kingdom courts in these types of cases. This article suggests that human rights activists should argue that holding corporations are liable for the human rights abuses committed by their subsidiaries on the basis of domestic tort law rather than customary international law. In this context, the line of cases, which was first established with Lubbe v. Cape and then further developed with Chandler v. Cape, offers an alternative to either piercing the corporate veil or establishing a cause of action based on a combination of tort and customary international law. In Chandler, the U.K. Court of Appeal held the holding company directly responsible for the human rights violations committed by its subsidiary without the need to address the issues related to piercing the corporate veil or customary international law. Chandler has the potential to become an authority not only in the United Kingdom, but also abroad as it establishes a parent company's duty of care toward its subsidiary's employees. However, the case left some unanswered questions, such as whether the parent company owes a direct duty of care toward third parties and whether this could be applicable to the multinational context. This article will address these questions by analyzing Chandler v. Cape and its application in the Dutch decision of Akpan v. Royal Dutch Shell.

Item Type: Article
Official URL: http://www.bcu.ac.uk/law/research/centre-for-ameri...
Additional Information: © 2015 The Author
Divisions: Law
Subjects: K Law > K Law (General)
Sets: Departments > Law
Date Deposited: 17 Oct 2017 08:37
Last Modified: 23 Jul 2019 23:07
URI: http://eprints.lse.ac.uk/id/eprint/84765

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