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Modern Families. UK Supreme Court confirms CSR jurisdiction against mother and daughter in Lungowe v Vedanta and Konkola – yet with one or two important caveats.

Update 17 April 2019 Opinio Juris have relevant review here.

Update 16 April 2019 Nick Lees and Tim Pickworth have similar caution for overenthusiastic reaction to the UKSC judgment here.

The SC this morning held in [2019] UKSC 20 Vedanta and Konkola v Lungowe, confirming jurisdiction in England for a human rights /environmental claim against a Zambia-based defendant, Konkola Copper Mines or ‘KCM’, anchored unto an EU-based defendant, Vedanta resources, the ultimate parent company of KCM. Both High Court and Court of Appeal had upheld such jurisdiction (the links lead to my blog post on both).

Of note are:

1. First of all

Lord Briggs’ emphatic rebuke of parties (and courts, one assumes) having disproportionately engaged with the issue of jurisdiction. With reference to ia VTB Capital he underlines that jurisdictional dispute should be settled in summary judgment alone, and should not lead to a mini trial. Reference is made to the size of the bundles etc. A bit of an unfair comment perhaps given that clearly there was a need for SC intervention. At any rate, one imagines that current judgment settles a number of issues and that in future litigation therefore these at least will have to be met with less arguments; lest, as his lordship notes at 14, the Supreme Court’ will find itself in the unenviable position of beating its head against a brick wall.’

2. As noted by Coulson J at 57 in the High Court judgment, neither Vedanta nor KCM pursue an Article 34 Brussels Ia argument of lis alibi pendens with proceedings in Zambia. As I signalled in my succinct review of recent study for the EP yesterday, the A34 defence is likely to be important in future litigation.

3. Applicants’ arguments that pursuing the case against them is an abuse of EU law, were advanced and equally rejected at both the High Court and the Court of Appeal stage. They are pursued again with the SC (at the latter’s express instruction).

  • At 29 Lord Briggs agrees with the HC and the CA and decides that the point that there has been no such abuse of EU law, is acte clair – no reference to the CJEU therefore.
  • At 31 ff he discusses the limited authority (all of it discussed at the HC and the CA) on abuse of Brussels I (a), particularly abuse of the anchor defendant mechanism of (now) Article 8(1), including of course CDC and at 37 raises the interesting issue of remedy: if abuse is found, is it to be disciplined under a European remedy or rather using the common law instrument of forum non conveniens?
  • And at 39: appellants argue that in CSR cases like these, Owusu has the almost inevitable effect that, providing a minimum level of triable issue can be identified against an English incorporated parent, then litigation about environmental harm all around the world can be carried on in England, wherever the immediate cause of the damage arises from the operations of one of that group’s overseas subsidiaries. With the case against the England-based defendant going ahead at any rate, per Owusu, the risk or irreconcilable judgments should jurisdiction against the subsidiaries be vacated, simply becomes to great. Not so hands tied behind the back, appellants argue, but forum non paralysis.
  • At 40 Lord Briggs suggests an adjustment of the English forum non conveniens doctrine for cases like these: namely to instruct claimants of the need to avoid irreconcilable judgments, where the anchor defendant is prepared to submit to the jurisdiction of the domicile of the foreign defendant in a case where, as here, the foreign jurisdiction would plainly be the proper place, leaving aside the risk of irreconcilable judgments

 

4. Despite Owusu, the English courts are still within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. Here, discussion turned at 42 ff as to whether one should merely apply Chandler v Cape [2012] EWCA Civ 525, or whether this case involves the assertion of a new category of common law negligence liability.

  • This was rejected, like it was by Sales LJ in AAA v Unilever plc [2018] EWCA Civ 1532, which I review here.
  • Lord Briggs 54 concludes that viz the common law of liability there is neither anything special nor conclusive about the parent /subsidiary relationship, and
  • at 53 flags what instantly has become a favourite among commentators on the case: ‘Even where group-wide policies do not of themselves give rise to such a duty of care to third parties, they may do so if the parent does not merely proclaim them, but takes active steps, by training, supervision and enforcement, to see that they are implemented by relevant subsidiaries. Similarly, it seems to me that the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken.’

4bis This part of course inevitably may give parent companies a means to prevent such liability (do not proclaim group-wide policies, let alone train or enforce them – as Gabrielle Holly also immediately noted here). However a variety of mechanisms may prevent this becoming a cheap trick to avoid liability: such compliance programs are often required under competition law, financial law etc., too; are relevant for directors’ liability; and of course may already (such as in the French devoir de vigilance) or in future (as mooted ia by the EC and the EP) be statutorily prescribed.

At 60: in the case at issue, the SC finds that the High Court with sufficient care examined and upheld the essence of the claimants’ case against Vedanta, that it exercised a sufficiently high level of supervision and control of the activities at the Mine, with sufficient knowledge of the propensity of those activities to cause toxic escapes into surrounding watercourses, as to incur a duty of care to the claimants. At 61 Lord Briggs adds obiter that not all the material (particularly services agreements) would have persuaded him as much as they did the HC or the CA, however at 62 he emphasis again that the HC and CA’s judgment on same was not vitiated by any error of law.

5. At 66 ff then follows the final issue to be determined: forum non conveniens and the further advancement of the issue already signalled above: it troubles Lord Briggs at 75 that the trial judges did not focus upon the fact that, in this case, the anchor defendant, Vedanta, had by the time of the hearing offered to submit to the jurisdiction of the Zambian courts, so that the whole case could be tried there. (An argument which was considered by Leggatt J in VTB).

  • Evidently the A4 BruIa case would have had to continue per Owusu, yet the reason why the parallel pursuit of a claim in England against Vedanta and in Zambia against KCM would give rise to a risk of irreconcilable judgments is because the claimants have chosen to exercise that right to continue against Vedanta in England, rather than because Zambia is not an available forum for the pursuit of the claim against both defendants: claimant-inflicted forum non.
  • Why, at 75 in fine, (it may be asked) should the risk of irreconcilable judgments be a decisive factor in the identification of the proper place, when it is a factor which the claimants, having a choice, have brought upon themselves?
  • Lord Briggs’ argument here is complex and I need to cross-refer more to the various authorities cited however the conclusion seems to be that Lord Briggs rejects the argument of Leggatt J in VTB and he finds that ! provided the ex-EU forum is a suitable forum, under English private international law claimants do have to make a choice: either only sue the A4 defendant in the EU but not the ex-EU subsidiaries; or sue all in the forum where they may all be sued (if there is such a forum), here by virtue of submission to the non-EU forum. The alternative would allow claimant to profit from self-inflicted risks of irreconcilable judgments.
  • In the end the rule is of no impact in the case for Zambia was found not to be an appropriate forum, for reasons of ‘substantial justice’: among others because of the absence of Conditional Fee Agreements, and given the unavoidable scale and complexity of this case (wherever litigated), the trial judge was right that it could not be undertaken at all with the limited funding and legal resources which the evidence led him to conclude were available within Zambia.

 

6. By way of my conclusion so far: (update 11 April 2019: in the meantime echoed by Robert McCorquodale’s analysis here; and here; he was counsel for interveners in the case hence was able to refer to insight gained from having seen parties’ submissions)

The group policy direction, enforcement, compliance and communication of same -issue is an important take away from this case. Particularly as it may be expected that holding companies will not find it that straightforward simply to do away with such policies. Of great impact too will be the choice now put upon claimants in the forum non conveniens issue: suing nondom companies by virtue of anchoring unto the A4 mother company in England at least will be less straightforward (many usual suspects among the competing jurisdictions do have CFAs, allow for third party funding  etc.). Yet the two in my view dovetail: the reason for bringing in the ex-EU subsidiaries often is because the substantial case against them tends to serve the case against the mother. With a tighter common law neglicence liability the need to serve the daughter may be less urgent.

Geert.

European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2

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Unstunned slaughter. Belgian ban goes up to the CJEU for final (?) test on compatibiliy with freedom of religious expression.

I have of course posted regularly on the issues of unstunned slaughter, freedom of religious expression and animal welfare (search tag ‘shechita’ should pull out the relevant postings). The Belgian Constitutional court, to the expectations I assume of counsel in the case, yesterday referred to the CJEU for preliminary reference (cases 52 and 53/2019).

The subject of the litigation is the Flemish decree banning unstunned slaughter outright (for standing reasons the similar Walloon regime is no longer sub judice). The Belgian court requests the CJEU to clarify its judgment in C-426/16, on which I reported here,

Q1: does Regulation 1099/2009 allow Member States to introduce an outright ban; Q2 in the affirmative, is that compatible with the Charter’s right to religious expression; Q3 in the event of an affirmative answer to Q1: the elephant in the Regulation’s room which I flagged years back: is it not discriminatory to allow Member States to restrict religious slaughter, while simply exempting hunting, fishing and ‘sporting and cultural events’ from the Regulation altogether.

Readers will know my answer to these questions.

Geert.

 

 

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Brexit Bridge: How the two of spades is going to trump the Ace of Diamonds

Absolutely brilliant analysis of the Brexit shambles by KJ Garnett over on EU Perspectives. A poor, poor game of contract bridge.

EU Perspectives

Putin, the old cliché goes, views the international world order as a game of chess where pawns, knights, bishops and queens are played off one against the other until there is only one outright winner: Russia. Putin’s strategy is to align both his and his opponent’s pawns (the mob) with the bishops and knights (the snob) to weaken and topple his rival. His tactic has been to whip his adversary’s pawns into a state of fury through the spread of misinformation, defamation and slander thereby undermining his adversary’s legitimacy and authority. On the face of it both his strategy and his tactic appear to be working. Across the European Union we see the rise of extremism, the victory of populists in democratic elections and the phenomenal rise of an out-raged right-wing media slamming the European project as a wicked “cabal of high-priests”.

Putin has every right to feel smug. He…

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Unstunned slaughter and organic labelling. CJEU gets it wrong on Shechita (kosjer) and zabihah (halal).

“Laws are like sausages, it is better not to see them being made” is a quote widely attributed to German statesman Otto von Bismarck. It is not a wise perception. If, like laws,  we want sausages, then it is paramount we see how they are made, starting from the rearing of the animal, via the transport to and processing in abattoirs, through to food processing.

In Case C-497/17, Oeuvre d’assistance aux bêtes d’abattoirs the Court held that the particular methods of slaughter prescribed by religious rites that are carried out without pre-stunning and that are permitted by Article 4(4) of Regulation No 1099/2009 (on which more here) are not tantamount, in terms of ensuring a high level of animal welfare at the time of killing, to slaughter with pre-stunning which is, in principle, required by Article 4(1) of that regulation. No organic label under Council Regulation 834/2007 and Commission implementing Regulation 889/2008 may therefore be attached to said meat.

The AG had opined the matter is outside the scope of harmonisation of the organic labelling rules. The CJEU however essentially employs Regulation 1099/2009 as a conjoined piece of law and holds that organic labelling must not be assigned to meat originating from animals unstunned prior to slaughter.

The Court is wrong.

At 41 the Court itself acknowledges that ‘no provision of Regulation No 834/2007 or Regulation No 889/2008 expressly defines the method or methods for the slaughtering of animals that are most appropriate to minimise animal suffering and, consequently, to give concrete expression to the objective of ensuring a high level of animal welfare’.

At 47, the Court refers to Wahl AG’s statement in para 43 of his opinion, suggesting the AG ‘ stated, in essence, in point 43 of his Opinion, scientific studies have shown that pre-stunning is the technique that compromises animal welfare the least at the time of killing.’

What the AG actually said is ‘In the first place, it seems to me to be accepted that, while every killing is problematic from the viewpoint of animal welfare, the use of pre-stunning methods when animals are slaughtered may, at least in theory, and as a considerable number of scientific studies show, [FN omitted, GAVC] help to minimise that suffering when those methods are used in the proper conditions. that unstunned slaughter, properly carried out, meets with the ethos of organic farming.’ (emphasis added).

The AG in footnote refers to 2 studies in particular (he suggests there are more). Other studies show the exact opposite. Yet the wider relevance of what he opined lies in the ‘slaughter in the books’ admission. ‘In theory at least’ a perfectly carried out pre-slaughter stun minimises pain. That is very much the same with a perfectly carried out shechita or zabihah incision, particularly where it is carried out with the religiously-inspired stewardship ethos in mind.

In practice, pre-stunning goes horribly wrong in a considerable amount of cases for small and large animals alike. I am not the only one to have witnessed that. And as frequently occurring footage of abattoirs shows, there is little respect for animal welfare in commercial abattoirs, regardless of an eventual stun or not.

Of wider relevance in my view therefore is the problematic enforcement by certification bodies of generally formulated standards  – admittedly not an issue that may be solved by a court case.

Consider Wahl AG’s point made at 45 of his Opinion: ‘the certification ‘halal’ says very little about the slaughtering method actually employed.’ That is exactly the same for pre-stunning. The EU but more particularly its Member States and regions (which given subsidiarity ought to have a big say in this) will not achieve animal welfare if they do not properly address the wider relationship between food professional and animal, between upscale agro-industry and mass meat production.

Finally and evidently, this case is of no consequence to the acceptability of unstunned slaughter from the point of view of expression of freedom of religion.

Geert.

 

 

 

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Gloucester Resources: A boon for climate change law and ‘ecologically sustainable development’ in Australia.

Update 1 April 2019 Australian Coal Alliance Incorporated v Wyong Coal Pty Ltd [2019] NSWLEC 31 was held slighlty later and is a good illustration of the difference between judicial review and merits review.

Gloucester Resources v Minister for planning [2019] NSWLEC 7 is perfect material for my international environmental law classes at Monash come next (Australian) winter (September). Proposition is a permit for an open cut coal mine. Consent was refused on the basis of 3 reasons: the creation and operation of an open cut coal mine in the proposed location is in direct contravention of each zone’s planning objectives; the residual visual impact of the mine would be significant throughout all stages of the Project; and the Project is not in the public interest. Refusal was evidently appealed.

Preston CJ, the Chief Judge of the Land and Environment Court of New South Wales delivered serious support for an internationally engaged Australian (New South Wales) climate law approach. Although he did cite the Paris Agreement (439 ff: providing context to Australia and NSW’s future challenges; and including an interesting discussion on the balanced measures that might be needed to achieve Australia’s Paris Goals, refuted at 534 ff) and the UNFCCC, he did not need Paris, Kyoto, UNFCCC or anything else ‘international’ to do so. He applied the NSW principle of ‘ecologically sustainable development’ (ESD; a notion which often rings tautologically to my ears).

A blog post cannot do justice to a 700 para judgment – Note the following paras:

At 694 ‘Acceptability of proposed development of natural resource depends not on location of natural resource but on sustainability. One of the ESD principles is sustainable use– exploiting natural resources in manner which is ‘sustainable’ ‘prudent’ ‘rational’ ‘wise’ ‘appropriate’

At 696 ‘In this case, exploitation of coal resource in Gloucester valley would not be sustainable use and would cause substantial environmental and social harm. The Project would have high visual impact over the life of the mine of about two decades. The Project would cause noise, air and light pollution that will contribute to adverse social impacts. Project will have significant negative social impacts; access to and use of infrastructure, services and facilities; culture; health and wellbeing; surroundings; and fears and aspirations…The Project will cause distributive inequity, both within the current generation and between the current and future generations.’

At 514: rejection of the relevance of the limited impact which the project will have on Australia’s GHG emissions overall, with reference to US (EPA v Massachusetts) and the Dutch Urgenda case.

No doubt appeal will follow – a case to watch.

Geert.

 

 

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Sir Peter Singer and languages at the European Court of Justice.

My eye fell last week-end on The Times of London’s obituary of Sir Peter Singer, z”l , who passed away late in December.

The Times recall among others his linguistic skills and refer specifically to his judgment in [2013] EWHC 49 (Fam) DL  v EL, upheld by the Court of Appeal in [2013] EWCA Civ 865Regular readers will be aware of my interest in languages at the CJEU.

Sir Peter was applying the Brussels IIa Regulation 2001/2003 and had to decide inter alia where the child was habitually residing. In an endnote he discussed C-497/10 PPU Mercredi v Chaffe. At 76 he juxtaposes the English and French versions of the judgment (a technique I insist my students and pupils employ), observing the difference between ‘stabilité ‘ used in the French version and ‘permanence’ in the English, concluding that ‘stability’ would be the more accurate term. The Court of Appeal discusses the issue in 49.

Delightfully accurate and erudite.

Geert.

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French Court annuls market authorisation of Roundup. Contrary to public perception, it neither used nor needed the precautionary principle to do so.

In March 2017, France’s ANSES, the relevant food, environment, and occupational health and safety agency, approved Monsanto’s Roundup Pro 360. That authorisation has now been annulled by the Courts at Lyon – around the same time the story broke of extensive unquestioned copy /pasting by regulators of industry dossiers.

At the beginning of its reasoning the court cites France’s environment charter, to which its Constitution refers. The Charter guarantees everyone in its first Article the right to live in a balanced environment and one with respect for human health. Article 5 entails the precautionary principle, with reference (of course) to scientific assessment and proportionality.

Yet this intro is made for dramatic effect only. The judgment is in fact nothing but a straightforward application of risk assessment requirements on the basis of prevention, not precaution, and a simple observation of infringement of EU law.

At 3 (p.7) the court points out the consequences of the relevant EU authorisation regime. Active ingredients such as glyphosate are authorised (or not; and potentially with conditions) by the EU. Applications in wich these substances are used, by the Member States.

France’s Centre International de Recherche sur le Cancer (CIRC) had classified glyphosate as ‘probably carcinogenic’. Its report on same is referred to by the court as a ‘handbook’, based on peer reviewed studies, the data of which are objectively verifiable as well as replicable. In the other corner, one study referred to by Monsanto (at 7). Relevant EFSA studies only look at the active ingredient and it is these studies upon which ANSES’ decision was based. These studies do not assess the active ingredients’ actual use in preparations such as Roundup Pro 360 which is 41.5% glyphosate. Consequently ANSES quite straightforwardly violates Regulation 1107/2009, particularly its Article 36(6), which prescribes that interaction between the active substance, safeners, synergists and co-formulants shall be taken into account in the evaluation of plant protection products.

The judgment is convincing and straightforward. The road to it was all but easy.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, soft cover edition 2018, p.28 ff.

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