Company law Essay Example | Topics and Well Written Essays - 1500 words - 2

Company law - Essay Example VTB Capital plc is an England integrated and regulated bank, although it is majority owned by the Russian government bank. VTB got into a contract loan accord with RAP; a Russian company, where VTB loaned $ 225 million to enable RAP purchase several Russian dairy entities from Nutritek. 1 RAP failed to pay on the loan, prompting VTB to bring a court action alleging that it had been fraudulently induced to come into a credit contract by Nutritek. VTB claimed that Nutritek and RAP presented themselves as if they were not under common control while indeed they were. Moreover, both companies represented the price of the dairy companies at a higher value that their real value. VTB claimed that these representations were false since the RAP and Nutritek were owned by a Russian businessman Malofeev. VTB claimed that Nutritek was liable as VTB relied on false information offered by Nutritek to enter into a contract with RAP. The two principle issues that have legal implications were: 1. Juri sdiction issue on whether VTB ought to be given authorization to supply actions out of the court’s authority. VTB held that the conditions in which deception involving foreign parties, but concerning to frauds apparently perpetrated in England ought to be heard by the English bench. 2. Piercing the corporate veil where VTB wanted to treat Malofeev as a contracting party to the loan agreement. This meant that Malofeev would be jointly and severally accountable with RAP. Appropriate forum One of the outstanding legal implications in VTB v. Nutritek & Others [2012] case is that; the Supreme Court has established a precedent that decisions on the forum will hardly be re-opened for appeal. This resulted from the strong words of the Supreme Court’s president lord Neuberger on claim parties having to set up mini trials on preliminary issues like jurisdiction. Lord Neuberger asserted that it is purely inconsistent for parties to bring high costs upon themselves, and use up cou ntless days in court on a jurisdiction hearing. His counsel to appellate courts to be vigilant in disheartening appellants from arguing the advantages of evaluative interlocutory verdict made by a judge reinforces this fact.2 Lord Neuberger held that such re-openings would be allowed when a judge has made a noteworthy principle error only. The court of appeal refused VTB authorization to serve its claim out of the jurisdiction, noting that the law governing the supposedly tort claims was the Russian law. The Supreme Court upheld jurisdiction decision by referring to the case of Spiliada Maritime Corpn v Cansulex Ltd  ([1987] AC 460)3. The Spiliada case set that the burden of proof is left on the claimant. Therefore, VTB had to establish that the English courts were indeed the right forum for the action trial. VTB claimed that there was a strong presumption in favor of English jurisdiction because the action of tort happened in England, referring to Berezovsky v Michaels (2000)   case and the Albaforth (1984).4 The Supreme Court ruled against VTB holding that VTB was using an unhelpful approach by referring to â€Å"presumption† as this was setting the bar too high. The court held that it has to consider all factors as set by the common rule standard on jurisdiction as set in the Spiliada  case. The ruling has the legal implication of giving clarity on the relationship involving the Albaforth and the Spiliada