Tenaga Nasional Bhd v Irham Niaga Sdn Bhd [2011] 1 MLJ 752 CA per Abdul Malik Ishak JCA:
You cannot simply raise the, veil of incorporation just because you feel that it is in the interest of justice. But if there is fraud, then the veil of incorporation may be lifted. But here, there was no fraud at all.
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Even assuming for a moment that TNBT is not in a position to pay for the award, does that mean that the appellant (TNB) being the holding company has to be liable. We just cannot ignore the rule laid down by the Salomon’s case. We just cannot throw out Salomon’s case out of the window and pretend that it is not there. We are not prepared to depart from the rule in Salomon’s case. We are aware of the speech of Lord Denning MR in Littlewoods Mail Order Stores Ltd v Inland Revenue Commissioners, Same v McGregor (Inspector of laxes) [1969] 1 WLR 1241, at p 1254, (CA); [1969) 3 All ER 855, at p 860, (CA), where His Lordship said:The doctrine laid down in Salomon v Salomon é Co [1897) AC 22, has to be watched very carefully. It has often been supposed to cast a veil over the personality of a limited company through which the courts cannot see. But that is not true. The courts can and often do draw aside the veil. They can, and often do, pull off the mask. They look to see what really lies behind.
We categorically say that those who have chosen the benefits of incorporation must bear the rigours of the rule in Salomon’s case. And those who deal with a company should likewise be well aware of the rule in Salomon’s case.
