Absolute Corporate Liability in Industrial Disasters

NEED FOR TRANSNATIONAL LEGAL FRAMEWORK

INTRODUCTION

The tragedy of Bhopal is long gone from the minds of the western public. The commercial charisma that the news carried for some time is all but dead. However, the victims of this accident continue to suffer and will endure further suffering for decades to come. This accident presents to us many socio-legal issues that are much different than those encountered in other industrial or environmental disasters. This disaster has no equal in the annals of industrialized society. It raises many distinct legal issues never before encountered in any other accident. This fact alone necessitates a discourse that delves into the uniqueness of this legal nightmare. Hence, the inquiry must examine the consequences on the transnational corporations (TNCs), the exporters and importers of hazardous substances and technology, and the general population to determine the cause of such disasters. The fragmented nature of the current legal regime that regulates transnational corporate activity has to be comprehended, or analyzed taking in to view of the enormity of the scope of the TNCs' activity from a world order perspective. A sense of global, human, social, economic, environmental, and corporate justice is absent from the scholarly writings that have emerged in the aftermath of Bhopal. Economic development and the environment have traditionally been at odds with each other, particularly in third world countries. The developing countries have different conceptions of the risk associated with any hazardous activity which might arise due to industrial disasters. It is a right of every state to decide what constitutes a safe and risk-free activity, what the standard of the health of its citizens will be, and what level of pollution that it will accept as legal within its boundaries. Yet, it is an entirely different situation when such standards of health, risk, safety, and pollution begin to interact with the well-being of those beyond its sovereign jurisdiction. This article shall explore the causes of the deficiencies in the existing politico- legal framework that is designed to regulate and direct international business activities of the transnational corporations.

TRENDS IN CORPORATE ENVIRONMENTAL LIABILITY

The Bhopal disaster illustrates that the legal and business downsides are often not significant enough to prevent corporations from first causing environmental harm, and then evading liability for it.[1] Legal systems tend to convert liability for environmental harm into fines payable to regulators, or into tort damages payable to victims. So in the corporate calculation, environmental harm becomes a cost along with all the others such as the price of raw materials, shipping, and human resources and so on. The legal imperative for a corporation to maximise shareholder value ensures that its ‘predatory instincts’ are curbed only by a ‘pragmatic concern for its own interests’. So, corporations require constant reminding and encouragement to honour environmental considerations. Parent corporations routinely externalize the risk of tort liability through legally separate subsidiaries, though they derive profit from the very activities that generate the risk.[2] The increasing prevalence of tort liability over the past century has compelled corporations to reorganize in ways that enable them to limit or entirely avoid paying for their harms; evasion methods include sequestering hazardous activities in subsidiary corporations[3].

There is growing evidence that the trend in environmental liability is progressing per se.

FIXING ABSOLUTE CORPORATE LIABILITY IN INDUSTRIAL DISASTERS

Despite receiving a modicum of support from legal academia, pure “you profit, you pay” enterprise liability[4] for corporate torts has not, at least facially, been generally accepted. Absolute corporate liability has surfaced in a few basic forms in foreign jurisdictions and international governance documents. Over the past thirty years, a number of countries, and a few proposed international corporate governance documents, have posited or adopted schemes that impose a unified system of liability on corporate groups. For example: in case of Bhopal Gas Tragedy[5] a memorable principle urged by Union of India is that of absolute multi-national enterprise liability which underlines for the need for fixing absolute corporate liability in cases of industrial disasters as follows:

“Key management personnel of multinationals exercise a closely held power which is neither restricted by national boundaries nor effectively controlled by international law. The complex corporate structure of the multinational, with networks of subsidiaries and divisions, makes it exceedingly difficult or even impossible to pinpoint responsibility for the damage caused by the enterprise to discrete corporate units or individuals. In reality, there is but one entity, the monolithic multinational, which is responsible for the design, development and dissemination of information and technology world-wide, acting through a forged network of interlocking directors, common operating systems, global distribution and marketing systems and other controls.”

The multinational carries out its global purpose through thousands of daily actions by a multitude of employees and agents. Persons harmed by the acts of a multinational corporation are not put in a proper position to isolate which unit of the enterprise caused harm, yet it is evident that the multinational enterprise that caused the harm is liable for such harm. The multinational must necessarily assume this responsibility. A multinational corporation has a primary, absolute and non-delegable duty to the persons and the country in which it has in any manner caused to be undertaken any ultrahazardous or inherently dangerous activity. This includes a duty to provide that all ultrahazardous or inherently dangerous activities be conducted with the highest standards of safety and to provide all necessary information and warnings regarding the activity involved.[6]

While fixing corporate liability in cases of industrial disasters, limited liability toward tort victims may encourage corporations to take greater, socially harmful risks, externalizing the costs that those risks may impose on the public.[7] These tort-based concerns are at their sharpest when mass personal injury torts, environmental harms, and human rights violations are at issue. These harms carry the most normative weight and impose the greatest costs on society.

NEED FOR TRANSNATIONAL LEGAL FRAMEWORK

In today’s world, globalizing investment patterns have generated massive corporate webs that may involve layers of subsidiaries, loosely affiliated corporations, subcontractors, and other structurally complex corporate arrangements; moreover, corporate groups frequently cross national borders. Each company that makes up a multinational enterprise is subject variously to the laws of each and every state in which it does business. So the idea that MNEs (Multi National Enterprises) are necessarily beyond the reach of regulators and victims is somewhat of a myth.[8]  

In an era of increased globalization, transnational corporations (TNCs) have grown in number and in power. A significant portion of modern economic development occurs through TNCs that, in an effort to maximize profit, move to developing countries. Among the attractions to TNCs of such regions are lax environmental regulations and what amounts to tolerance of human rights violations.[9] TNCs have increased the rate of man-made environmental destruction and concomitant harm to humans. Indigenous groups are often affected the most severely; their sustainable lifestyle becomes impossible as natural resources are decimated by TNCs.

The need for transnational legal framework in fixing compensation for cases of industrial disasters must be understood from a long term global perspective. The necessity can be established for yet another international legal regime that can regulate transnational corporate activity effectively. A developing nation needs to be assured not only of the transfer of technology that has become redundant on the cost-benefit scale of business profitability in environmentally conscious developed countries, but also of the transfer of such technology that is absolutely safe to conduct ultra-hazardous activity in any part of the world.[10] Such measures are necessary to remedy the problems encountered during lengthy litigation, which seems to have failed to mitigate the pain and suffering inflicted upon the victims of the Bhopal tragedy. The best course is to develop stricter measures that will eliminate the possibility of "cost-benefit" related disasters. Interestingly, the culprits of the cost-benefit approach are both the importers of hazardous technology and substances and the TNCs.[11]

The best course is to develop stricter measures that will eliminate the possibility of "cost-benefit" related disasters. Interestingly, the culprits of the cost-benefit approach are both the importers of hazardous technology and substances and the TNCs. While the latter are usually willing to export cheaper, redundant technology to their foreign subsidiaries because of the exclusion of environmental cost, the former is satisfied because the imported technology is cheaper and is also responsible for creating new jobs.[12] In an era of environmental crisis and changing perceptions of the global economy, it is now not only obvious but necessary that the old institutions be replaced with new thinking. In this invigorated era of globalism - whether termed environmentalism or an interdependent global economic approach is needed.

Under current international law, TNCs are not liable for environmental destruction or the concomitant human rights abuses. Current international human rights law, environmental law, and economic law do not provide an avenue of legal redress for victims of environmental destruction. Environmental harm to individuals is not a cause of action under current international law; such harm must be connected to a substantive right and this requirement leads courts and commissions into an undefined area of law.[13]  The dynamic nature of human rights demands the continuous evolution of international laws to maintain relevance in a rapidly changing world.[14] The increase in environmental destruction and concomitant human rights violations requires that human rights law be extended to include environmental protections as a way to improve people's lives through preservation of the environment.

Law has not evolved with the globalization of economies and protects Trans National Corporations from liability, which was not its original intent. Trans National Corporations are organized in "multi-tiered corporate structures consisting of a dominant parent corporation, sub-holding companies, and scores or hundreds of subservient subsidiaries scattered around the world."[15] The economic reality and public view of a Trans National Corporation is that it is a single enterprise because it is supported by common control, common business purpose, economic integration, financial and even administrative interdependence, and often common public persona that characterize the group's operations. However, the legal reality of multinationals is that each constituent is regarded as a separate juridical person. A Trans National Corporation is not one firm; a TNC is made up of multiple interrelated corporations that act under common control. Entity law shields US parent corporations from liability of subsidiaries overseas. Often, the group subsidiaries are incorporated under the laws of the state in which it conducts business. A subsidiary corporation of a TNC is a national of the nation in which it is incorporated and subject to that nation's laws under accepted principles of international law.[16]

In some cases, vicarious liability can be applied to the parent corporation based on equitable piercing the veil jurisprudence, agency law, or some concept of enterprise law.[17] There is a need to discuss why the Indian Courts have adopted enterprise liability in the wake of the Bhopal disaster and whether the doctrine is indeed beneficial for the Indian economy.

ABSOLUTE LIABILITY – FROM A COPORATE PERSPECTIVE

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.[18]

The Bhopal disaster drew the world’s attention to the Janus-faced role played by multinational corporations that operate through subsidiaries in Third World countries such as India.[19] The legal and human costs of the disaster renewed scholarly debate about one of corporate law’s most difficult questions: When should a court disregard the corporate form and pierce the corporate veil to hold shareholders directly liable for a corporation’s actions?[20]Answering that question is especially difficult in the case of India because it is a developing country that depends on investments by foreign companies to fuel its rapid economic growth.[21] Yet giving corporations too much protection from liability encourages them to create subsidiaries that are undercapitalized and poorly monitored while engaged in ultrahazardous activities that are producing more large-scale industrial disasters such as Bhopal.[22]

The debate over how to balance these considerations has intensified in recent years with the push to move from the traditional doctrine of piercing the corporate veil to the new concept of enterprise liability. Under traditional veil-piercing doctrine, courts generally only hold a parent corporation responsible for a subsidiary’s liabilities if they find that the parent corporation’s wrongful use of its control was the proximate cause of damages.[23] In India, the debate over enterprise liability could have significant consequences because of the country’s increasing importance in the world economy and the critical contribution of multinational corporations to that rise.[24] The Supreme Court of India has approved of enterprise liability.[25] Indian courts have also responded by adopting a doctrine of absolute liability for companies engaged in ultrahazardous enterprises. However, the exact scope of enterprise liability in India remains unclear.

By examining the evolution of enterprise liability in India from traditional English veil-piercing law, this paper attempts to show how Indian courts have changed the scope of limited liability to respond to national economic and social concerns. Indian courts should instead adopt a narrow theory of enterprise liability. Under this theory, parent corporations would only be held responsible under enterprise liability for the torts of sibling or subsidiary companies that involve ultrahazardous activities. This paper also highlights the comparative legal perspective[26] of absolute corporate liability in industrial disasters with specific reference to jurisdiction in United States of America and England where the Courts rejected the theory of absolute enterprise liability.

In Cape Industries[27], the plaintiffs sued two marketing subsidiaries of the English parent corporation, Cape, in a federal district court in Texas. They alleged they had been hurt by asbestos that another subsidiary of Cape had mined in South Africa. Cape settled one suit but did not take any part in a second asbestos suit. Instead, Cape decided to let its subsidiary corporation, which had few assets, absorb any judgments for damages. The legal dictum of fixing absolute corporate liability was rejected by the courts of foreign jurisdictions. But the Indian Courts recognized and applied the Doctrine of Absolute Liability in several cases.

After Cape Industries, English courts consistently rejected enterprise liability.[28] They respected the decisions of corporate planners and did not pierce unless they found evidence of fraud or illegality. The advantage of this approach was that it provided certainty to corporations. United States courts have also adopted a similar view that rejects the enterprise liability theory. The result may be a more dynamic economy but more uncompensated tort victims.

INDUSTRIAL DISASTERS vis-à-vis ENTERPRISE LIABILITY JURISPRUDENCE IN INDIA     

Although some scholars have long criticized the ability of corporations to use limited liability to shift risks to tort creditors, a new wave of scholarly criticism emerged in the era of ultrahazardous mass torts. After the Bhopal disaster in 1984, Indian courts similarly began to question theSalomon doctrine and turned towards enterprise liability. The massive financial and human costs of ultrahazardous torts led Indian courts to declare that enterprise liability better served the country’s economic policy goals than the Salomon rule. The Supreme Court of India held “The ghost of Salomon’s case still visits frequently the hounds of Company Law but the veil has been pierced in many cases.”[29]

This principle of enterprise liability was overruled by the Supreme Court of India in the following decisions and give rise to the new doctrine of absolute liability for companies. India’s approach provides the most compelling example of enterprise liability that solely considers the group status of the multinational enterprise. This approach was borne out by the much-publicized Bhopal disaster. In 1987, as the legal battle over damages from Bhopal still raged in India, the Supreme Court of India decided another case involving an ultrahazardous tort in M.C. Mehta v. Union of India.[30] The Mehta case involved a 1985 leak of poisonous oleum gas from a chlorine plant in Delhi that resulted in 340 injuries and one fatality; the plant was owned by a company called Shriram, a subsidiary of Delhi Cloth Mills Limited. The Supreme Court took on the case at an intermediate stage to clarify novel legal issues. In its decision, the Supreme Court laid out several important principles. First, it adopted a new doctrine of absolute liability for companies engaged in ultrahazardous activities. Second, the court said that damages should be proportional not just to the size of the harm, but also to the size of the enterprise that committed the harm so they would have a deterrent effect. Finally, the court suggested that it was also adopting a theory of enterprise liability under which the entire economic unit, or “enterprise” that controlled the plant could be held liable.

The court said it was adopting these broader theories of liability in response to the economic changes sweeping the country. As the country developed new industries, including ultrahazardous ones, the court argued that the law should “evolve new principles and lay down new norms which would adequately deal with the new problems which arise in a highly industrialized economy. TheMehta case had enormous ramifications in the Indian courts. In 1988, in Union Carbide Corp. v. Union of India,[31] the Madhya Pradesh High Court cited the Mehta decision in examining whether Union Carbide was liable for the actions of its subsidiary corporation Union Carbide India Limited.

In 1996, the Supreme Court of India reconsidered the Mehta doctrine in another case involving ultrahazardous torts committed by a corporate group. In Indian-Council for Enviro-Legal Action v. Union of India,[32] the Supreme Court reaffirmed its decision in Mehta without clarifying it. In Enviro-Legal Action, a group of affiliated companies in the village of Bichri operated various chemical plants where they produced toxic chemicals. All of the plants and companies were “controlled by the same group of individuals” and had a common president. Toxic chemicals from the plants leaked and polluted the soil and waters, devastating the local agricultural economy. Citing the Mehta doctrine, the court held that all of the affiliated companies were “absolutely liable to compensate for the harm caused by them to villagers in the affected area, to the soil and to the underground water.”

The court stated again that “[i]t is that the enterprise [carrying on the hazardous or inherently dangerous activity] alone has the resource to discover and guard against hazards or dangers.” While the Court did not define the scope of enterprise liability in Enviro-Legal Action, it applied the doctrine with limited analysis. Common ownership and management of the various chemical companies was enough to hold all of them liable for the pollution. Moreover, the court stressed its concerns with the costs of rapid economic growth. Without enterprise liability, the victims of the Bhopal spill would most likely not have been able to receive any payments for damages.[33]

However, with enterprise liability, companies that committed ultrahazardous torts could no longer use limited liability to shift risks to tort victims. This adoption of enterprise liability in the wake of Bhopal by the Indian courts indicates that they began viewing the traditional doctrines of limited liability and veil piercing as insufficient to deal with the modern world of ultrahazardous industries and mass torts. The rhetoric used by Indian judges also shows their increasing suspicion of multinational companies that used subsidiaries to shift risk to destitute Indians. The Supreme Court of India first suggested its openness to expanding enterprise liability beyond ultrahazardous torts inState of Uttar Pradesh v. Renusagar.[34] In evaluating the issue, the Supreme Court of India first explained that “the concept of lifting the corporate veil is a changing concept and is of expanding horizons.”

The court’s analysis looked at the economic reality of the situation rather than just accepting the legal forms originally created by planners. Limited liability and veil piercing place excessive focus on corporate formalities, so much so that today’s mega-corporations with massive legal teams can carefully guard against liability by establishing subsidiaries and maintaining distinct corporate identities. Lower courts have also adapted enterprise liability to situations that do not involve ultrahazardous industries or mass torts. In Novartis AG v. Adarsh Pharmaceuticals,[35] for example, the Madras High Court used enterprise liability to resolve a patent and marketing battle.The decisions in Renusagar and Novartis demonstrate how Indian courts are expanding enterprise liability to a variety of contexts rather than just limiting it to the area of ultrahazardous torts.

The recent push for enterprise liability has come in the modern age of multinational corporations and ultrahazardous torts. It is not surprising that the Supreme Court of India approved of enterprise liability in the Mehta decision while outrage over the Union Carbide disaster was still fresh. Without enterprise liability, victims of the Bhopal spill would not have been able to collect much money from Union Carbide India Limited, the subsidiary corporation of Union Carbide. Even traditional veil piercing may have been of little use since there was no indication of fraud or other intentional wrongdoing by Union Carbide. The Bhopal litigation shows how enterprise liability can prevent corporations from shifting the risks of ultrahazardous torts to destitute creditors.

However, the Bhopal litigation also demonstrated one of the great deficiencies of the Indian court system: its extraordinary sloth. The Bhopal disaster happened in 1984. It was considered the worst industrial disaster in world history at that time. Yet, it still took the Indian court system seven years to approve a $470 million settlement with Union Carbide. Although the case ultimately produced a large financial judgment against Union Carbide, it also demonstrates a major disadvantage of the Indian legal system that makes financial recovery difficult and expensive for tort victim. During the Union Carbide litigation, the Indian government itself argued that U.S. courts should hear the case because few tort victims were able to obtain any meaningful relief due to the inadequate Indian judicial system. Prompted by the scale of the catastrophe, the Indian government assumed parens patriae[36] responsibility for the cases pending before the U.S. District Court for the Southern District of New York.196 In its brief for the plaintiffs, it put forward a radical form of enterprise liability that would hold Union Carbide liable for the acts of Union Carbide of India.

Persons harmed by the acts of a multinational corporation are not in a position to isolate which unit of the enterprise caused the harm, yet it is evident that the multinational enterprise that caused the harm is liable for such harms. The multinational must necessarily assume the responsibility, for it alone has the resources to discover and guard against hazards and to provide warnings of potential hazards.

TRANSNATIONAL LEGAL FRAWORK OF UNITED NATIONS

India has not been alone in articulating this radical theory, but it has been alone in adopting the enterprise liability approach. The U.N. has also proposed including enterprise principles as part of a larger scheme of regulation of corporate behavior in the Norms on the  Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights(Norms).[37]The drafters of the Norms envisioned a transnational framework imposing a high bar for corporate behavior as a way to prevent a race to the bottom among member states to attract business and circumvent actions by multinational corporations to exert power over host states. Though the U.N. member states have not adopted them, and their definition of “enterprise” is spare, the Norms would impose high standards for multinational liability and responsibility, and these principles could be the first step toward significant global changes.[38]

CONCLUSION

Therefore it can be concluded that an expanded doctrine of absolute enterprise liability would stunt this development of new industry and manufacturing that the Indian government has stated is an important component of national economic policy. The judicial process, which has at times demonstrated signs of judicial activism and innovation, failed, until recently, to notice and incorporate the rapid changes of industrial development and hazardous activity associated with sophisticated technology. Bhopal and the other accidents should not be treated as grim reminders of destiny and should not be forgotten as still mere episodes of the cost-benefit era. Besides the business of moneymaking, multinational corporations also need to realize their responsibility towards global social justice.

[1] Galanter, M. (2002),‘Law’s Elusive Promise: Learning from Bhopal’ in Likosky, M. ed. Transnational Law and Legal Process: Globalisation and Power Disparities, Butterworths, 172-83; and Muchlinski (1987) ‘The Bhopal Case Controlling Ultrahazardous Industrial Activities Undertaken by Foreign Investors’ 50 MLR 545.

[2] Jose Engracia Antunes, Liability of Corporate Groups (1994); Mark J. Roe, Corporate Strategic Reaction to Mass Tort, 72 Va. L. Rev. 1, 39 (1986).

[3] Henry Hansmann & Reinier Kraakman, Toward Unlimited Shareholder Liability for Corporate Torts, 100 Yale L.J. 1879, 1881 & n.4 (1991).

[4] John H. Matheson, The Limits of Business Limited Liability: Entity Veil Piercing and Successor Liability Doctrines, 31 Wm. Mitchell L. Rev. 411, 422 (2004).

[5] Union Carbide Corporation v. Union of India, AIR 1990 SC 273.

[6] Upendra Baxi and Thomas Paul, Mass Disasters and Multinational Liability: The Bhopal Case, The Indian Law Institute, p.v, (1986).

[7] Meredith Dearborn, Enterprise Liability: Reviewing and Revitalizing Liability for Corporate Groups, California Law Review, Vol. 97.195, p.205, (2009).

[8] Perry-Kessaris, A. (2010) Corporate liability for environmental harm –in Fitmaurice, M.; Ong, D.; Merkouris, P. -Research Handbook  on International Environmental Law, p.5

[9] Alison Shinsato, Increasing the Accountability of Transnational Corporations for Environmental Harms: The Petroleum Industry in Nigeria, 4 Nw.U.J.Int’l Hum.Rts. 186 at http://www.law.northwestern.edu/journals/jihr

[10] Judith L. Ugelow, A Survey of Recent Studies on Costs of Pollution Control and the Effects on Trade, inENVIRONMENT AND TRADE 167 (Seymour Rubin & Thomas R. Graham eds., 1982).

[11] Sudhir K. Chopra, Multinational Corporations in the Aftermath of Bhopal: The Need for a New Comprehensive Global Regime for Transnational Corporate Activity, 29 Val. U. L. Rev. 235 (1994). p.238

[12] Ingo Walter, International Economic Repercussions of Environmental Policy: An Economist's Perspective, inENVIRONMENT AND TRADE, supra note 7, at 22; Charles Pearson, Environment and International Economic Policy, in ENVIRONMENT AND TRADE, supra  note 7, at 46.

[13] Oshua P. Eaton, The Nigerian Tragedy, Environmental Regulation of Transnational Corporations, and the Human Right to a Healthy Environment, 15 B.U. Int'l L.J. 261, 297 (1997).

[14] Laura S. Ziemer, Application in Tibet of the Principles on Human Rights and the Environment, 14 Harv. Hum. Rts. J. 233, 275 (2001).

[15] Phillip I. Blumberg, Asserting Human Rights Against Multinational Corporations Under US Law: Conceptual and Procedural Problems (sec. IV), 50 Am. J. Comp. L. 493, 493 (Fall 2002).

[16] Barcelona Traction, Light and Power Co., Ltd. (Belgium. v. Spain), 1970 I.C.J. 4, 32 (Feb. 5, 1970). See also Restatement (Third) Foreign Relations Law  p.212 (1987).

[17] Phillip I. Blumberg, Asserting Human Rights Against Multinational Corporations Under US Law: Conceptual and Procedural Problems (sec. IV), 50 Am. J. Comp. L. 493, at 496 (Fall 2002).

[18] Abhi Raghunathan, The Grand Trunk Road from Salomon to Mehta: Economic Development and Enterprise Liability in India, The George Town Law Journal, Vol.100 p.571

[19] See Bhopal Trial: Eight Convicted Over India Gas Disaster, BBC NEWS (16:39 GMT, Monday, 7 June 2010), http://news.bbc.co.uk/2/hi/south_asia/8725140.stm. last visited on 10/07/2012

[20] “Piercing the corporate veil is the most litigated issue in corporate law . . . .” Robert B.Thompson, Piercing the Corporate Veil: An Empirical Study, 76 CORNELL L. REV. 1036, 1036 (1991).

[21] Amadeo M. Di Lodovico, William W. Lewis, Vincent Palmade & Shirish Sankhe, India–From Emerging to Surging, MCKINSEY QUARTERLY, Dec. 2001, at 28, 31–32.

[22] See Meredith Dearborn, Comment, Enterprise Liability: Reviewing and Revitalizing Liability for Corporate Groups, 97 CALIF. L. REV. 195, 197–98 (2009).

[23] FREDERICK J. POWELL, PARENT AND SUBSIDIARY CORPORATIONS (1931)

[24] India’s Surprising Economic Miracle, ECONOMIST (Sept. 30, 2010)

[25] M.C.Mehta v. Union of India, (1987) 1 S.C.R. 819, 844.

[26] Adams v. Cape Industries [1990] 1 Ch. 433 (C.A.) at 544 (Eng.), United States v. Bestfoods 524 U.S. 51, 61–64 (1998).

[27] Adams v. Cape Industries [1990] 1 Ch. 433 (C.A.) at 544 (Eng.)

[28] Sandra K. Miller, Piercing the Corporate Veil Among Affiliated Companies in the European Community and in the U.S.: A Comparative Analysis of U.S., German, and U.K. Veil-Piercing Approaches, 36 AM. BUS. L.J. 73, 113 (1998)

[29] State of Uttar Pradesh v. Renusagar, (1988) 1 S.C.R. Supp. 627, 668

[30] (1987) 1 S.C.R. 819

[31] Union Carbide Corp. v. Union of India, Civil Revision No. 26, (1988), Madhya Pradesh H.C., reprinted in Upendra Baxi & Amita Dhanda, Valiant Victims And Lethal Litigation: The Bhopal Case p.332 (1990)

[32] (1996) 3 SCC 212

[33] PETER T. MUCHLINSKI, MULTINATIONAL ENTERPRISES AND THE LAW 316–319 (2d ed. 2007) (considering the need for a multinational scheme based on a “significant degree of economic and commercial integration across borders”) (noting that victims of ultrahazardous torts in Third World countries are often uninsured).

[34] (1988) 1 S.C.R. 627

[35] (2004) 3 C.T.C. 95

[36] Parens patriae actions give a sovereign state standing to prosecute a lawsuit on behalf of one or more of its citizens. Black’s Law Dictionary 1144 (8th ed. 2004).

[37] U.N. Econ. & Soc. Council (ECOSOC), Sub-Comm. on Promotion & Protection of Human Rights, Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, U.N. Doc. E/CN.4/Sub.2/2003/L.8 (Aug. 7, 2003) (prepared by Alfonso Martínez et. al.)

[38] Larry Catá Backer, Multinational Corporations, Transnational Law: The United Nations’ Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility in International Law,37 Colum. Hum. Rts. L. Rev. 287, 288 (2006).

C.E.Pratap 

M.A., M.L., PGDPMIR