Corporations In International Litigation: Problems of Jurisdiction and the United Kingdom Asbestos Cases

Abstract

In his seminal work The Multinational Challenge to Corporation Law Professor Phillip Blumberg assets that, “jurisdiction continues to be one of the most litigated areas involving the clash of enterprise and entity.”1 Indeed, in a world where business is increasingly conducted through the medium of economically integrated multinational enterprises (MNEs), the question of whether a forum has jurisdiction over disputes arising out of the operations of non-resident entities of the MNE brings into contrast the mismatch between the territorial reach of the legal system and the transnational reach of the enterprise. In terms of corporation law this raises the further matter of whether, and how far, the legal organisation of the MNE into distinct legal entities, in distinct legal jurisdictions, should affect the applicable rules of private international law as to the reach and scope of forum jurisdiction. Such issues have recently been aired before the English courts in a series of cases, arising out of the asbestos mining and milling operations of the British based MNE Cape plc in South Africa, which culminated in a judgment given by the House of Lords on 20 July 2000. It is the purpose of this paper to explore the issues of jurisdiction over non-resident entities of MNEs, first, through an examination of these cases in the light of Cape's industrial and management structure. It is striking how little such matters are addressed in the Anglo-American legal literature pertaining to private international law. Rather than considering the economic realities of the cases in issue, and developing new doctrines to deal with them, lawyers have tended to rely on legal concepts—in particular, the territorial nature of legal jurisdiction and the single unit corporate form—to lead them to often unsatisfactory results that would appear to a lay person not to accord with justice. A clearer understanding of the economic realities of group operations thus seems essential for the development of law in this area.

Limited liability and multinational enterprises: a case for reform?

“…However, the case did not sanction direct liability for the parent for the acts of its subsidiary as this was a procedural case dealing with jurisdiction. Significantly, the House of Lords did not overrule an earlier finding of the Court of Appeal that the case should be brought in England as the English based parent may have been directly responsible for the actions that led to the claims being made (Lubbe et al v Cape Industries, England and Wales House of Lords, 2000, and see further: Muchlinski, 2001).…”

Managing multinationals: the governance of investment for the environment

“…The limited applicability of foreign direct liability in many legal systems and the confusion surrounding many non-state labelling and certi®cation schemes, has heightened the need for public regulation. In the legal area, there have been moves, for example, to harmonise jurisdictions and to advance negotiations towards a multilateral convention on civil jurisdiction and judgements under the auspices of the Hague Conference on Private International Law (Muchlinski, 2001). The appeal of public regulation is its ability to provide the consistency, transparency and enforceability that many civil regulation approaches lack.…”

Corporate Social Responsibility in Pakistan: A Legal Perspective with Reference to MNEs

“…MNEs always tried to hide behind the umbrella of states, as states were deemed to be addressees and bearers of human rights, labor and environmental obligations under traditional treaty and customary international law (Bantekas 2004). The courts of the country of the parent company's incorporation refused to entertain suits pertaining to operations of the subsidiary in the host state, especially based on forum non convenience 3 in recent cases (Muchlinski 2001). However, this immunity no longer lived through the turn of century where because of different factors, discussed below, the corporations, reluctantly though, stopped to hide behind state veil.…”