MARITIME LAW |
Practice |
Foresight Shipping Co. v. Union of India
T-455-02
2004 FC 231, Tabib P.
16/2/04
8 pp.
In 1993, Foresight Shipping Co. Ltd. (FSC) obtained, after arbitration conducted in India, arbitral award against respondents herein, Union of India and Food Corporation of India (FCI) in relation to charterparty dispute--Award not paid--Registered as judgment in Federal Court in 2002--FSC obtained writ of seizure and sale against ship Lok Rajeshwari--Owner of Lok Rajeshwari, The Shipping Corporation of India Ltd. (SCI), objected to seizure, filed present motion for leave to intervene and for relief from seizure--SCI's right to intervene not contested, but FCI arguing seizure should be upheld because: under Indian law, SCI alter ego of government of India and, as such, its assets should be available to satisfy debts of Union of India--When applying foreign laws in resolving conflict of law issue, one must apply foreign law as it exists, and not as reformers think it ought to evolve--Law of India continues to recognize distinct juridical personality to government-owned companies for purpose of ownership of assets and enforcement of judgments--FCI also arguing Court should pierce corporate veil and treat assets of SCI as assets of India for purpose of execution--Appears to be inappropriate use of doctrine of lifting corporate veil--Courts pierce corporate veil to hold shareholders, principals liable for company's obligations-- Circumstances of this case not lending themselves to such extraordinary step--In order to lift corporate veil, Court must find corporate entity completely dominated and controlled by owner--Complete domination referred to more than mere ownership--Control must be such that company does not, in fact, function independently--Not shown herein--FSC also failed to demonstrate that India in any manner, shape or form using SCI for its allegedly nefarious purposes--Lifting corporate veil only ever justified by use to which person or entity has put company under its control--Conduct of Union of India in failing to pay its debt to FSC not involving such use of SCI--Permission granted to SCI, to intervene in present proceedings for purpose of opposing seizure of ship Lok Rajeshwari by writ of execution--Seizure of ship Lok Rajeshwari set aside, and ship released from seizure in this cause for legal purposes.