This paper looks at the complex legal relationships that exist between MNCs and their subsidiaries, primarily between the legal systems in the UK and India. The concept of subsidiaries, their legal independence, and the situations in which the parent company can be held accountable for the activities of its subsidiaries through the piercing of the corporate veil are all examined in this paper. It investigates the idea of agency in this setting and queries whether MNCs and their subsidiaries have completely separate legal identities.
The study explores the intricate matter of multinational corporations' accountability for human rights breaches, mainly in the context of Indian law. It examines important Indian court rulings that have shaped the body of knowledge about parent company liability. The impact of Corporate Social Responsibility on the Indian Constitution and other relevant legal provisions on corporate responsibility for human rights abuses is also examined.
The paper examines the Duty of Care test in the context of UK law, as established by precedents such as Vedanta and Okpabi v. Royal Dutch Shell. This test holds parent firms responsible for abuses of human rights that their subsidiaries may have committed. The study emphasizes the changing legal frameworks intended to ensure corporate accountability and the unique strategies adopted by India and the UK to solve these intricate legal issues.
Additionally, the research paper assesses the shortcomings and disputes surrounding the Bhopal Gas Tragedy case—which included Union Carbide Corporation and its affiliate, Union Carbide India Ltd.—critically. It examines the amount of compensation given, the fact that business leaders are not held personally liable, the persistent complaints, and the lawsuits requesting more money.
The piece highlights the need for additional legislative measures to achieve full corporate responsibility and, in a larger perspective, shows that penetrating the corporate veil alone may not be adequate to handle the complex difficulties faced by multinational corporations. To promote ethical business conduct, it suggests non-legal means, international collaboration through treaties, and legislative measures. In this globalized society, the paper argues for a multifaceted strategy to secure justice and responsibility in cases of human rights violations by multinational corporations (MNCs), strengthen corporate accountability, and promote ethical corporate conduct.