Lifting The Mists Of Metaphor - Piercing The Corporate Veil

Lifting The Mists Of Metaphor - Piercing The Corporate Veil: A Comparative Assessment Of Indian And Chinese Legal Practices

Amulya Anita Gurumurthy & Nupur Paliwal, Jindal Global Law School

ABSTRACT

This paper aims to provide a comparative perspective on the doctrine of piercing the corporate veil in India and China, with respect to the grounds invoked for piercing the veil, its application with regard to the categories of companies, the scope of parties allowed and parent-subsidiary company relations. The differences in the civil and common law systems of China and India indicate the prominence accorded to the statutory application of corporate veil doctrine in the former and judicial interpretation in the latter. The lack of the use of stare decisis or precedential value in Chinese courts indicates the need for a coherent judicial trend in the application of the doctrine, preventing reliance on clarifications by the apex court. On the other hand, Indian common law tradition confers greater flexibility upon the court to decide matters and shape future decisions. Thus, both jurisdictions require a balanced approach which involves the consolidation of clear legislative provisions concerning the grounds for piercing the veil and the standard for the same while leaving adequate space for application on a case-by-case basis.