UK High Court Finds That Parent Can Assume Liabilities of Subsidiary

In a decision dated April 10, 2019, Vedanta Resources PLC et al. v. Lungowe et al., the UK high court determined, in a decision on which the case did not depend, that a parent company can indeed assume liabilities of a subsidiary if the parent assumes a duty of care for the acts of the subsidiary.  This might include, for example, issuing and administering global policies and guidelines.  This come up, for example, where the parent of a group that is international is located in the UK.  While the decision was effectively dicta, the court has made similar determinations before and the case is considered to represent their view.  Moreover, although of course it has no force in the United States, where doctrine of “piercing the corporate veil” and related determinations remain strong, there is a view that the UK determination is at least interesting authority.