Lifting of Corporate Veil as means of war against terrorism.

In 1916, one company by the name of Continental Tyre and Rubber Company (Great Britain) Ltd was a company incorporated in the United Kingdom. The company supplies tyres to Daimler. However, after the first world war broke out between the Germans and the United Kingdom, Daimler is not sure whether they should continue business relationship with Continental tyre because they do not want to assist company that related to hostile country. Daimler stop making payments to Continental Tyre and the latter sued the former for the payment.

Continental Tyre was incorporated in the United Kingdom. German national except for one held by the company secretary, a British national, held all the shares in the company. However, based on the principle of separate legal entity, Continental Tyre is a United Kingdom company, not German.

The court uplifted the corporate veil and saw the Germans behind the company. The company was deemed to be a hostile partnership and held that the company is incapable of suing Daimler in the United Kingdom. Trading with Continental Tyre is akin to trading with the enemy. Daimler escaped paying the invoices to Continental Tyre.

Back to 2015, there is no war between countries. However, we are now at war with terrorism. The terrorist does not confined to one geographical area but had spread all over the world. The terrorist network has to transfer money to their affiliates to finance their global terror network. Hence, the country had introduced Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

I am of the view that the court may use the same principle to uplift the corporate veil to combat terrorism. The court may want to look who is behind a company whether the company is controlled by terrorist. Dealing with these companies may be deemed as trading with the enemy. However, the problem is to identify the terrorist. This is something that the authority needs to take up at their end. Right now, the enemy alien is no longer beyond our borders but within.