Rod Cowper & Michael Twomey study the latest approach to piercing the veil
The Supreme Court in VTB Capital plc v Nutritek International Corp [2013] UKSC 5, [2013] 1 All ER 1296 decisively rejected the suggestion that a person who controls a company can be made liable as a party to a contract entered into by that company. However, although the Supreme Court declined the opportunity for a more general review of the corporate veil doctrine, the doctrine did not emerge unscathed.
Facts of VTB
VTB lent Russagroprom LLC (RAP) US$225m for RAP to buy Russian dairy companies from Nutritek International Corp. The facility agreement contained an English Court jurisdiction clause. Nutritek’s shareholders were two BVI companies, both owned and controlled by Mr Malofeev (M), a Russian businessman.
RAP defaulted and VTB believed its security was only worth US$32m to US$40m. It claimed that it was induced to enter into the agreement by fraudulent misrepresentations made by Nutritek for which the BVI companies and M were jointly and severally liable. VTB wished
