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Chapter 5 :Procedures and effects of founding a

corporation
Exceptions to Theory of Corporation

2) Judiciary interpretation fraud/unlawful


purposes
f) If Court use discretionary equity or (comparable
*this one kinda unsure of the meaning)

If court use discretionary equity, then it will


probably set aside technical feature of separate
personality of a company if it is considered as
fair to do so in that situation.

Chapter 5 :Procedures and effects of founding a


corporation
Exceptions to Theory of Corporation
2) Judiciary interpretation fraud/unlawful purposes
f) If Court use discretionary equity or (comparable *this one kinda
unsure of the meaning)

Case : Orri v. Moundreas [1981] (High Court, England)


Fact: Orri had chartered a vessel from a Panama company which
is wholly owned by his brother in law, Moundreas. Disputes arose
and that company indicted Orri. He had been ordered to pay some
money for using that vessel.
During proceeding: For loans made by Orri to Moundreas, did not
relate to the counterparty. {Orri indicted Moundreas to pay the
loan}
Orri had asked for implementation of suspension towards
companys actions until his trial against Moundreas.
Moundreas does not own assets di England, which is sufficient to
maintain implementation of suspension to judgment obtained by
Moundreas corporation against Orri.

Chapter 5 :Procedures and effects of


founding a corporation
Exceptions to Theory of Corporation
2) Judiciary interpretation fraud/unlawful purposes
f) If Court use discretionary equity or (comparable *this one kinda unsure
of the meaning)

Case : Orri Iwn Moundreas [1981] (High Court, England)


(continued)
Decision: Judge Mustill in general implementation of suspension
would not be deemed as correct by court in the event that the party
get involved with different people; i) first case: Moundreas
corporation and Orri; ii) Orri and Moundreas.
Exception : In certain circumstances deserve to see behind the
formation of company and to command implementation of
suspension.
In this case: Court agree with Orris request to delay courts
indiction (indiction (i) Moundreas corporation and Orri until his
hearing allegation against Moundreas is finished (ii)..