Case comment: Lungowe v Vedanta Resources Plc [2017] EWCA Civ 1528 and Okpabi v Royal Dutch Shell Plc [2018] EWCA Civ 191

This blog post is reproduced from an article published in the Human Rights Lawyers’ Association journal, the Young Human Rights Lawyer.

(2018) 4YHRL – https://www.hrla.org.uk/wp-content/uploads/2019/01/2018-4YHRL-final-version.pdf

Background

In two recent decisions of the Court of Appeal, English parent companies with subsidiaries in Africa were sued for alleged human rights breaches occasioned by their subsidiaries. While the cases highlight a number of crucial principles pertaining to jurisdiction and liability of parent companies to third parties, this review assesses the role of access to justice as a basis for deciding that England and Wales is the appropriate forum in which to bring such claims.

The two judgments

In Lungowe v Vedanta Resources Plc[1] (‘Vedanta’), a 2017 Court of Appeal decision, 1,826 Zambian claimants sued Vedanta, a company incorporated in the United Kingdom and Konkola Copper Mines Plc (‘KCM’), Vedanta’s Zambian subsidiary. The claimants alleged loss of income, damage to property and personal injury due to pollution and environmental damage caused by discharges from KCM’s mine.[2]  The issues before the Court of Appeal were, inter alia, whether England was the appropriate forum  to bring the claims and alternatively whether the claimants would get access to justice in Zambia.[3] To determine whether England was the appropriate forum the Court had to establish, inter alia, whether the claimants had a properly arguable case against Vedanta.[4] The Court of Appeal upheld the earlier court’s finding that there was a properly arguable case that Vedanta owed the claimants a duty of care[5] and alternatively that the claimants ‘would almost certainly not obtain justice in Zambia.’[6]

In the 2018 case of Okpabi v Royal Dutch Shell Plc[7] (‘Okpabi’), the Court held that 42,500 Nigerian citizens had failed to establish a properly arguable case that Royal Dutch Shell Plc (‘RDS’), a company incorporated in the United Kingdom, owed them a duty of care. RDS has a subsidiary in Nigeria called Shell Petroleum Development Company of Nigeria (‘SPDC’) which operates oil pipelines in the Niger Delta. The claimants, all residents of the Niger Delta, were seeking damages due to ‘serious, and ongoing, pollution and environmental damage’ caused by oil leaks from pipelines operated by SPDC.[8] The Court found that the claimants failed to establish that RDS owed them a duty of care and that it would be fair, just and reasonable to impose a duty of care in the UK.[9]

Significance of the role of UK courts

Apart from the important principles on duty of care set out in the two cases, they raise serious questions about the potential role of English courts in providing remedies to breaches of human rights brought about by UK companies operating abroad. This was touched on by Sales LJ in his dissenting speech in Okpabi when he highlighted the importance of having ‘two persons legally liable for the same damage’ as a way of protecting claimants from liable subsidiaries that become insolvent.[10] A further significant consideration is the likelihood of claimants accessing justice in the jurisdictions where the breaches occur. In illustrating the difficulties faced by claimants bringing claims against English parent companies, the Court in Vedanta considered: the fact that previous environmental litigation in Zambia had failed; the claimants’ lack of resources and the fact that they would be unable to afford legal representation; the absence of conditional fee agreements in Zambia; the absence of specialist environmental lawyers willing to represent the claimants and KCM’s obdurate approach to litigation. The Court concluded that the judge below had not erred in his findings that the claimants would almost certainly not obtain justice in Zambia.[11]

While some of the factors relating to access to justice considered in Vedanta were to some extent also present in Okpabi (for example the financial position of the claimants and the limited enforcement of environmental regulations in Nigeria), the Court did not regard them to be determinative of the matter at issue.[12] Despite the gravity of the public health situation facing the claimants and the fact that clean-up operations in the Niger Delta were incomplete,[13] the Court in Okpabi based its reasoning primarily on 
the proximity between the claimants and RDS and whether it was fair, just and reasonable to impose a duty of care.[14]

Another recent case where claimants are seeking redress 
in UK courts for torts allegedly committed by a subsidiary is Kalma v African Minerals (UK) Limited and others.[15]The claimants allege that they ‘were shot, beaten, arbitrarily arrested, subject to sexual violence and tortured’[16] by Sierra Leonean police working on the instructions of Tonkolili Iron Ore, the subsidiary of a UK company. In a significant move for access to justice, the High Court decided to conduct part of the trial in Sierra Leone to enable those claimants who could not travel to London, to give evidence in person.

In conclusion, Vedanta and Okpabi are significant examples of the challenges facing claimants in claims against English companies operating through their subsidiaries. Such difficulties are often compounded by the complex corporate structures of multinational companies and the absence of internationally agreed mechanisms for holding such companies to account. The above cases set out the framework for gauging the duties owed by parent companies to citizens of other countries and more importantly embolden the courts to take into account access to justice factors in considering the appropriate forum for such claims. However, while access to justice featured strongly in Vedanta, it had a limited role in Okpabi due to the claimants’ failure to show a properly arguable case against RDS. With the Supreme Court due to hear the appeal in Vedanta in January 2019,[17] it remains to be seen whether the difficulties with access to justice faced by claimants in their home jurisdictions would support their argument that England and Wales is the appropriate forum to bring such claims.

Walker Syachalinga


[1] [2017] EWCA Civ 1528.

[2] Ibid [1] and [2] (Simon LJ).

[3] Ibid [40], [103].

[4] Ibid [41]-[43].

[5] Ibid [90].

[6] Ibid [105], [131].

[7] [2018] EWCA Civ 191.

[8] Ibid [1] (Simon LJ).

[9] Ibid [130], [132] (Simon LJ); [205] (Lord Vos, Chancellor of the High Court).

[10] Okpabi (n 7) [150] (Sales LJ); see also Vedanta (n 1) [96] (Simon LJ).

[11] Vedanta (n 1) [131]-[134] (Simon LJ).

[12] Okpabi (n 7) [130] and [131] (Simon LJ).

[13] Ibid [175] (Sir Geoffrey Vos, Chancellor of the High Court).

[14] Ibid [132], [193], [205], [206].

[15] [2018] EWHC 120 (QB); see also [2017] EWHC 1471 (QB) involving the same parties but relating to costs budgets.

[16] Martyn Day and Liberty Bridge, ‘How Sierra Leonean farmers got their day in Court’ (Leigh Day, 31 January 2018) < https://www.leighday.co.uk/Blog/January-2018/How-Sierra-Leonean-farmers-got-their-time-in-Court> accessed 1 July 2018.

[17] Permission to Appeal results – March and April 2018< https://www.supremecourt.uk/docs/permission-to-appeal-2018-0304.pdf > accessed 23 October 2018.


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