National Jurisdiction and the Multinational Enterprise
I want in this Chapter to focus on the special case of the multinational corporation as the object of both of the subjects that we have been discussing thus far--jurisdiction to prescribe and jurisdiction to adjudicate. In many ways the multinational enterprise has been the dominant institution in the international economy, at least since World War I. Yet, to a surprising degree, the law has not kept up with reality. While there is an enormous body of legislation, judge-made law, and commentary in all the industrial states concerning the governance of corporations, nearly all such law was developed in a private law context, before the wave of regulation, taxation, labor law, environmental controls, and other forms of governmental intervention familiar today; moreover, nearly all such law was developed with a view to a single firm operating out of a single state, owned by shareholders who might or might not also be managers but were not other corporations. The modern multi-layered, multinational enterprise, in which dozens or even hundreds of firms are linked through common ownership or control, has not been the focus of company law in any state. The question that I want to address here is the extent to which responsibility--substantive and procedural--can or should be attributed to multinational enterprises for obligations of member companies under national laws.
Ideally, the answer to this question would be decided uniformly in all states. There is no such uniform law, and it may be premature to speak even of an emerging consensus. Nevertheless, I believe some instructive precedents can be presented, and some useful suggestions can be made, both concerning substantive principles of law and concerning the source of law to be applied when the parent corporation is established in one state and the subsidiary or the obligation in question is centered in another state. Once again, we find ourselves in the gray area between public and private international law.____________________