Volume 100 -- Issue 2 Georgetown Law Journal

The Grand Trunk Road from Salomon to Mehta: Economic Development and Enterprise Liability in India

In traditional corporate law, plaintiffs must rely on the common law doctrine of piercing the corporate veil to hold shareholders responsible for a corporation’s liabilities. Courts generally respect the decisions of corporate planners and rarely pierce the veil. But some corporate law scholars have grown frustrated with the traditional doctrine of veil piercing, calling it inadequate in an era where multinational corporations use subsidiaries to shift liabilities to destitute tort victims in Third World countries. As an alternative, scholars have pushed for courts to adopt the doctrine of enterprise liability. Under enterprise liability, plaintiffs can hold a corporate parent responsible for the actions of a sibling or subsidiary corporation that is part of the same overall economic unit without having to meet the rigorous standards of traditional veil piercing.

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