Editor’s
note: Maisie Biggs recently graduated with a MSc in Global Crime,
Justice and Security from the University of Edinburgh and holds a LLB
from University College London. She is
currently an intern with the Doing Business Right project at the Asser
Institute in The Hague. She previously worked for International Justice
Mission in South Asia and the Centre for Research on Multinational Corporations
(SOMO) in Amsterdam.
“No one who
comes to these courts asking for justice should come in vain. The right to come
here is not confined to Englishmen. It extends to any friendly foreigner. He
can seek the aid of our courts if he desires to do so. You may call this ‘forum
shopping’ if you please, but if the forum is England, it is a good place to
shop in both for the quality of the goods and the speed of service.”
Lord Denning in The
Atlantic Star [1973] 1 QB 364 (CA) 381–2
The United Kingdom Supreme Court today
has handed
down Vedanta
Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 20, a significant judgement concerning
parent company liability and the determination of jurisdiction for these
claims. Practically, it now means for the first time a UK company will face
trial and potentially accountability in their home jurisdiction for
environmental harms associated with operations of foreign subsidiaries.
This is a closely-watched jurisdiction case concerning a UK parent
company’s liability arising out of the actions of its foreign subsidiary. The claimants are 1826 Zambian
citizens from the Chingola region of the Copperbelt Province. This group action
is against UK-domiciled Vedanta Resources PLC and its subsidiary KCM, a second
defendant which is incorporated in Zambia. The original claims
concern discharges from the KCM-owned Nchanga mine since 2005 which have
allegedly caused pollution and environmental damage leading to personal injury,
damage to property and loss of income, amenity and enjoyment of land.
Following the initiation of this claim, in 2015 Vedanta and
KCM challenged the jurisdiction of the English courts, however Coulson J dismissed
their applications. The Court of Appeal then upheld the
dismissal of those applications, so the defendants appealed to the
Supreme Court. (See our previous blog on the case here).
The Supreme Court today denied the
appeal by Vedanta Resources and KCM, and allowed the claim to proceed to merits
in England. The Court made it clear the real risk that the claimants would not
obtain access to substantial justice in Zambia was the deciding factor in the
case. The Court denied there was an abuse of EU law by the claimants using
Vedanta as a jurisdictional hook to sue both the parent company and subsidiary
in England, and the claimants succeeded in demonstrating there was a “real
triable issue”, nonetheless Zambia was held to be the “proper place” for the
case. However, because the Court supported the finding of the first instance
judge regarding the risks faced by claimants in accessing substantial justice
in Zambia, the appeal was denied, and the case can proceed in England.
This is a significant judgement, as it
now means for the first time a UK company will face trial and potentially
accountability in their home jurisdiction for environmental harms associated
with operations of foreign subsidiaries. Lord Briggs delivered the judgement on
four major issues: the potential for abuse of EU law; whether there was a real
triable issue against Vedanta; whether England is the proper place for these
proceedings; and whether there was a real risk that substantial justice would
not be obtainable in that foreign jurisdiction.
Why is this significant? For those
following this case, and the appeals of Okpabi & Ors v
Royal Dutch Shell Plc & Anor (Rev 1) [2018]
EWCA Civ 191 and AAA & Ors v
Unilever Plc & Anor [2018] EWCA Civ 1532 in the English courts, there
are two major findings in this judgement that will likely impact future cases
concerning parent company liability. Firstly, the reasoning behind the finding
of a “real triable issue” between a foreign claimant and UK parent company, and
secondly the primacy the Supreme Court placed on the significance of access to
justice as a jurisdictional hook for claims in England. More...