The Court of Appeal looked at this issue in Antonio Gramsci Shipping Corporation and others v Aivars Lemberg  EWCA Civ 730. As confirmed by the Supreme Court’s decision in VTB Capital plc v Nutritek International Corp and others  UKSC (click here for a copy of a previous In Practice article on this case), as a matter of English law, the corporate veil could not be pierced, so the allegedly fraudulent controlling individual was not directly bound by the jurisdiction clause in the contract made by the corporate entity. As an alternative, the Court of Appeal in the Antonio Gramsci case was asked to consider whether, as a matter of EU law, the position might be different, so that the fraudulent controller of a corporate entity entering into a contract containing an English jurisdiction clause could be deemed to have consented to that jurisdiction clause.
The Court of Appeal found that:
- Whether a person has consented to a jurisdiction clause is a matter of fact, and “deemed consent” is only available where there has been a transfer of the contract or of all the rights and obligations for which it provided.
- Whether the corporate veil has been pierced is a matter of national rather than EU law.
The claimants’ enterprising attempt to by-pass the effects of the now settled English law on piercing the corporate veil thus did not succeed. The English law position on this issue therefore continues to prevail.
Click here for a copy of the judgment.