Court gives narrow interpretation to deemed consent and piercing the corporate veil

In Antonio Gramsci Shipping Corp & Ors v Aivars Lembergs [2013] EWCA Civ 730, the Court of Appeal held that the controller of a shell company that had entered into a contract containing a jurisdiction clause was not deemed to have consented to submit to that jurisdiction himself.

The court also followed the recent rulings in VTB Capital and Prest v Petrodel to the effect that the fact that a party used a company it controlled as a façade would not automatically justify piercing the corporate veil. The veil is pierced only when the controller is ‘under an existing legal obligation… which he deliberately evades’.

Antonio Gramsci Shipping Corp chartered a number of vessels to offshore companies that were allegedly controlled by Aivars Lembergs and others. Gramsci alleged that these charterparties were part of a fraudulent scheme to charter the vessels at below-market rates and then sub-charter them at higher rates. The charterparties contained exclusive English jurisdiction clauses…

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