Multinational Enterprises and Tort Liabilities
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Multinational Enterprises and Tort Liabilities

An Interdisciplinary and Comparative Examination

Muzaffer Eroglu

This book conducts an interdisciplinary and comparative examination of tort liabilities of multinational enterprises (MNEs). In the first part, it examines the social, economic, managerial and legal characteristics of MNEs and compares the findings of this examination to the current understanding of MNEs in the way that tort liability is applied to them. In the second part, the book examines the existing laws and principles related to liability of MNEs from a variety of jurisdictions with the aim of assessing whether these laws are adequate for the challenges that modern MNEs create. In the final part, Muzaffer Eroglu proposes solutions to the problems of tort liability of MNEs.
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Chapter 4: Jurisdictional Problems

Muzaffer Eroglu


Introduction Reaching the justified liability of MNEs’ tort is blocked not only by problems of substantive company law but also many procedural and jurisdictional problems create huge hurdles. In other words the complex design of international private law presents significant obstacles to suing MNEs in the venues in which they can be held liable. Therefore in transnational litigation, past experiences have illustrated the complex interplay between principles of substantive corporate law and procedural rules of international civil litigation.1 Even though litigation is supposed to be the last resort as a means of ensuring that MNE groups comply with standards and duties of care in relation to their operations, it plays a very important role because the choice of law issues and interpretations of law are determined usually according to the law of the forum states.2 More over the power of MNEs and the inefficient legal structure of host countries prevent plaintiffs reaching satisfactory compensation. Generally, people who have been injured as a consequence of the tortious activities of MNEs sue the companies in the forum of the parent company’s state to benefit from its legal systems’ advantageous structure. However, many of the cases brought in the forum of the UK and the US have been dismissed on the ground of the principles of forum non conveniens under which the American and English courts considered the host states’ forums distinctly and clearly more appropriate to hear the cases. When there is a tort committed by a subsidiary of an MNE, plaintiffs...

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