Shell holding hauled before Dutch court for infringement of environmental law in Nigeria – All left to be decided

It has been widely reported that Shell’s top holding has been hauled before a Dutch court by a Dutch environmental NGO (Milieudefensie), seeking (with a number of Nigerian farmers) to have the mother holding being held liable for environmental pollution caused in Nigeria. Readers will be aware of Shell being in the docket once or twice these days for so-called ‘corporate social responsibility’ (CSR) issues (see here for relevant links).

The media have been somewhat wrongfooted in reporting on the issue. Establishing jurisdiction in an EU court vis-a-vis a company with seat in the EU, is not exactly rocket science. It is a simple application of the Brussels I Regulation. As readers will be aware, the Court of Justice of the EU has barred national courts from even pondering rejection of such jurisdiction (Owusu: rejection of forum non conveniens considerations).

What is interesting, is the fact that Milieudefensie and the individual applicants are also pursuing the Nigerian daughter company in The Netherlands. In an interim ruling going back to 2009, the court held that the case against the Nigerian daughter may prima facie at least be bundled with the case against the mother holding. I understand however that the bundling issue will be revisited in the proceedings which started yesterday.

Moreover, under the Rome II Regulation, the Dutch court near inevitably will have to apply the lex loci damni i.e. Nigerian law, both against mother and daughter. That not only means that (presumably stricter) EU environmental standards will be out off reach, it also leaves the question  whether under Nigerian law (indeed the same would have been the case under Dutch law), in substance the mother can actually be held liable for activities of its daughter.

Finally, were daughter Shell to be held liable, enforcement would have to be sought in Nigeria. Rejection of such enforcement by Nigerian courts is not unlikely.

One assumes that not many of the legal hesitations signaled above will be of much concern to the NGO involved: publicity for the wider CSR issue is arguably what is sought. This begs the more conceptual question whether overall sustainable development is assisted by having courts in ‘developed’ countries exercise jurisdiction and apply ‘developed’ law to cases such as these.

Geert.

ps for Dutch readers, I have an op-Ed on the case, in Dutch, here.

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  1. #1 by Bregt on 30/01/2013 - 2:49 PM

    There’s a ruling! http://www.milieudefensie.nl/oliewinning/nieuws/uitspraak-shell-zaak-geweldig-voor-ikot-ada-udo.-daarnaast-precedent (in Dutch), http://uk.reuters.com/article/2013/01/30/uk-shell-nigeria-lawsuit-idUKBRE90T0DC20130130 (in English).
    It appears that the court did not find parent liability, however the foreign subsidiary was held liable for failing to prevent sabotage. Interesting stuff, surely to be continued!

    • #2 by Geert Van Calster on 30/01/2013 - 2:54 PM

      Thank you for the alert, Bregt. Now all we need to do is to read the actual judgment and read for ourselves. to be continued indeed. Geert.

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