THE DOCTRINE OF PIERCING THE CORPORATE REVIEW IN THE COURT DECISION NO. 656/PDT.G/2015/PN.MDN

Limited Liability Company (Ltd.) or Perseroan Terbatas (PT) is a legal entity in Indonesia that constitutes a capital alliance formed by an agreement that features a limited liability principle. Limited liability is a principle that limits the responsibility of shareholders to the risk of the Company. However, the principle of limited liability is frequently misapplied, as shareholders look for ways to protect themselves from the risk of more significant losses, to take advantage of all company profits for personal gain. Shareholders who abuse the principle of limited liability for personal gain, on the other hand, will be subject to the Piercing the Corporate Veil doctrine. This doctrine imposes the transfer of liability for personal losses to shareholders who cause harm to the company in bad faith. Based on this understanding, this paper seeks to comprehend the application of the Piercing the Corporate Veil doctrine by analyzing Medan District Court Decision Number: 656/Pdt.G/2015/PN.Mdn. The research method used in this study was normative legal research reviewed with a statute approach and a conceptual approach. The conclusion drawn from the problem is as follows: the regulation regarding the Piercing the Corporate Veil doctrine is borne not only by shareholders but also by the Board of Directors and the Board of Commissioners who fail to implement the principles of fiduciary duty of skill and care. Furthermore, in the case of 656/Pdt.G/2015/PN.Mdn, the judge considered the provisions of Article 3 paragraph (2) of the UUPT in implementing the Piercing the Corporate Veil Doctrine by punishing the Defendants jointly and severally to indemnify the Plaintiff.

Aktualisasi Mitigasi Risiko Bisnis Berdasarkan Prinsip Fiduciary Duty dan Business Judgment Rule

Proyek besar dalam rangka pembangunan menyebabkan BUMN mengalami kesulitan keuangan, bahkan merugi, input atau keuntungan yang diperoleh dari pembangunan lebih sedikit daripada output atau biaya yang telah digunakan, dalam hal ini direksi bertanggungjawab atas pengelolaan atau pengurusan perusahaan dengan baik mungkin, walaupun dibayang-banyangi oleh berbagai risiko, diantaranya risiko bisnis, maka dari itu direksi perlu melakukan mitigasi risiko agar dapat melaksakan tugas dan fungsinya dengan sebaik mungkin dan memaksimalkan pencapaian maksud dan tujuan pendirian BUMN. Metode pendekatan dalam penelitian ini adalah yuridis normatif yang lebih mengutamakan penelitian kepustakaan. Spesifikasi penelitian bersifat deskriptif. Tahap penelitian dilakukan melalui penelitian kepustakaan yaitu mengumpulkan data sekunder berupa bahan hukum primer, sekunder, dan penelitian lapangan. Hasil penelitian menyimpulkan kerugian yang dialami oleh BUMN yang melakukan kegiatan infrasturktur adalah sulit untuk dihindari, apalagi dalam konteks perusahaan yang maksud dan tujuan adalah mencari keuntungan dan optimalisasi mitigasi risiko dapat terwujud ketika direksi mengimplementasikan prinsip-prinsip terkait tugas dan fungsi direksi, terutama prinsip fiduciary duty sebagaimana mestinya, dengan begitu sekalipun keputusan yang diambil mengakibatkan kerugian bagi BUMN.

A Lie Is a Lie: The Ethics of Lying in Business Negotiations

I argue that lying in business negotiations is pro tanto wrong and no less wrong than lying in other contexts. First, I assert that lying in general is pro tanto wrong. Then, I examine and refute five arguments to the effect that lying in a business context is less wrong than lying in other contexts. The common thought behind these arguments—based on consent, self-defence, the “greater good,” fiduciary duty, and practicality—is that the particular circumstances which are characteristic of business negotiations are such that the wrongness of lying is either mitigated or eliminated completely. I argue that all these “special exemption” arguments fail. I conclude that, in the absence of a credible argument to the contrary, the same moral constraints must apply to lying in business negotiations as apply to lying in other contexts. Furthermore, I show that for the negotiator, there are real practical benefits from not lying.

The legal nature of fiduciary duty in civil law of Ukraine

The variety of fiduciary legal relations in the civil law of Ukraine requires the study of their individual elements, in particular, the fiduciary duty. Therefore the purpose of this article is to clarify the legal nature of the fiduciary duty, in order to avoid legal uncertainty, which leads to difficulties in law enforcement and, as a result, ineffective legal protection of violated rights of a person due to non-fulfillment or improper fulfillment of such an obligation in relation to her.Analyzed such concepts as "fides", "fiducia", duty in civil law. It has been established that the first, respectively, in Roman law had several meanings, but the main thing is the trust of the participants in civil relations to each other. The second have to understood as the proper behavior of the subject of civil relations, the content and model of which are determined by the requirements of the rule of law, the will or persons authorized by the transaction or other legal facts.It was found that the fiduciary duty is the proper behavior of the subject of a trust relationship, due to the conclusion of certain agreements (for example, commissions, property management, joint activities, the provision of lawyer services, etc.), or the occurrence of legal facts (election of a body or person of a legal entity, who (who) has the right to act on her behalf, the establishment of guardianship or trusteeship, the death of an individual, etc.).

Economic Policies for Innovative Enterprises: Implementing Multi-Stakeholder Corporate Governance

Large corporations dominate economic and social life in the United States and around the globe. The mainstream corporate governance ideology of “shareholder primacy” claims that the exclusive purpose of a corporation is to generate returns for shareholders, which means that governance decisions should be exclusively in their hands. However, shareholder primacy lacks a theory of how companies innovate, and instead focuses solely on allocation of corporate profits, misunderstanding the relationship of shareholders to the twenty-first-century corporation. The theory of the corporation as an innovative enterprise—engaged in productive innovation by producing higher-quality goods and services for lower unit costs—is an accurate way to understand what makes corporations successful producers. Stakeholder theory from progressive legal scholarship illustrates specific corporate governance institutions that can assist innovation, including fiduciary duty, stakeholder participation in decision making, and equity ownership. This article contributes to the growing literature refuting shareholder primacy by utilizing the theories of the innovative enterprise and multi-stakeholder governance to propose reshaping US corporate governance to better to serve innovation in production and a balance of power in distributional decision making. JEL classification: B50, D21, G30, G35, K22

The Terms of Our Surrender: Colonialism, Dispossession and the Resistance of the Innu

Based on extensive fieldwork and oral history, The Terms of Our Surrender is a powerful critical appraisal of unceded indigenous land ownership in eastern Canada. Set against an ethnographic, historical and legal framework, the book traces the myriad ways the Canadian state has successfully evaded the 1763 Royal Proclamation that guaranteed First Nations people a right to their land and way of life. Focusing on the Innu of Quebec and Labrador, whose land has been taken for resource extraction and development, the book strips back the fiduciary duty to its origins, challenging the inroads which have been made on the nature and extent of indigenous land tenure—arguing for preservation of land ownership and positioning First Nations people as natural land defenders amidst a devastating climate crisis. It offers a voice to the Innu people, detailing the spirituality practices, culture and values that make it impossible for them to willingly cede their land. The text is intended to bridge the gap in knowledge between legal practitioners and those working at the intersections of human rights, social work and public policy. The book offers a potent template for how we can use the law to fight back against the indignities suffered by all indigenous peoples.

The Case of the Chelsea Grand: Card-Check Neutrality, Management Contracts, and The Duties of Owners and Operators

This article examines the dispute between a hotel owner, operator, and union, and the subsequent litigation. The dispute centered on whether the hotel owner was bound by agreements made between its operator and the union, and whether the operator had a fiduciary duty to the owner. Courts found that the operator was a joint employer of the owner’s employees, and as a result, the owner was bound to agreements that the operator had made with the union. The owner, who did not want to be bound to the union agreement, subsequently sued its operator for alleged breach of fiduciary responsibility. The courts ruled that the hotel management agreement between the owner and operator created no agency relationship and thus no fiduciary duty on the part of the operator. We discuss the potential implications of these findings for union-management relations as well as owner-operator relations, with a specific focus on the implications for hotel owners in the labor context.

14. Directors’ liabilities for breach of duty

This chapter focuses on the extent of a director’s civil liability for breach of fiduciary duty and the liability of third parties involved in some way in that breach of duty. One of the most important issues is the extent of a director’s liability to account. Liability can range from accounting for secret profits to claims for equitable compensation and from personal to proprietary claims. Often, a claim will be affected by limitation issues. It may be complicated by the involvement of third party accessories. Mitigation through reliance on indemnity provisions, insurance and by applying to the court for relief is also considered. The discussion covers: breach of fiduciary duty, liability of third parties, claims for negligence, and managing potential liabilities.

How fiduciary duty law incentivises investors to manage sustainability risks

The compatibility of Environmental, Social and Governance (ESG) risk management with the investment management requirements under the investors’ fiduciary duties (FD) figures among the key questions in today’s context of a rapid growth of sustainable investment strategies. Despite some legal developments, namely, in Europe, investors still have no clear answer to this question, which leaves them inert in the face of these new, unconventional types of risk. In our research, we explore the recent advancements in the EU and the US legal practice with the objective to establish to what extent the FD actually requires investors to consider ESG risks in their investment management decisions. Through analysis, we define a theoretical decision-making pattern for ESG risk management set by the current FD law as applied to investors and identify: 1) ESG risk materiality and 2) the effectiveness of ESG risk hedging as its fundamental elements. Then, we design a theoretical representation of ESG risk materiality under the FD legal constraints and identify that the current FD law binds investors to assimilate ESG risks to financial risks; thus, their management is required only if they are financially material for investments. We show that this principle equally applies to long-term ESG risks (like climate change); investors are incentivised to manage only those that are sufficiently financially material considering the applied hypothetical discount rate. Also, through the case study of a recent US ERISA ESOP lawsuit, we reveal that risk aversion towards probability to successfully hedge material ESG risks could impede efficient risk management by incentivising investors not to hedge a material ESG risk, i.e. to breach their FD.