Posts Tagged Alien Tort Statute
Kiobel v Shell in The Netherlands. Court confirms jurisdiction anchored unto mother holding and qualifies the suit as one in human rights: not tort. Also orders limited use of documents obtained in US discovery and limited continuation of the trial.
Update 26 July 2019 the English version of the judgment is now available here.
In January 2017 I reported that Ms Kiobel, following failure to convince the USSC of jurisdiction under the Alien Tort Statute, subsequently initiated proceedings in the Dutch courts to try and sue Shell over the case. (Evidently unrelated to the pursuit of Shell in The Netherlands on environmental grounds – a case which is still pending upon appeal).
The court in first instance at the Hague on 1 May accepted jurisdiction against
- both the mother holding. That was not at all under discussion: this is done via Article 4 Brussels Ia’s domicile rule. Use of Article 33 /34’s forum non conveniens-light mechanism was not suggested;
- two English-incorporated Shell daughters using Article 8(1) of the Brussels I a Regulation; and
- the Nigerian daughter company. Against the Nigerian daughter company, jurisdiction needs to be anchored unto the Dutch mother holding using Article 7 of the Dutch CPR, which is a near carbon copy of Article 8(1) Brussels Ia, whose CJEU authority is followed by Dutch courts in the interpretation of the Dutch residual rule.
Coming so soon after the UKSC in Vedanta the Dutch case has received quite a bit of attention. After first not considering an English translation (not surprisingly; these are the Dutch courts, not a World Service), the clerks have now announced that there will be one, coming up some time soon.
Readers of the blog will expect me to hold the judgment against a clear jurisdictional and conflict of laws lens – in doing so, I fear I have to be a little bit less optimistic than media soundbites following the case.
Jurisdictional issues were in the end dealt with fairly summarily. Most attention went to issues of evidence and discovery, as well as a first review of the substance of the case.
Of note is:
- At 4.3: acceptance by all parties of of Nigerian law as the lex causae; if need be, choice of law by all parties for Nigerian law as the lex causae. Rome II is not applicable ratione temporis. The case has this in common with the Milieudefensie case against Shell. This being a civil law jurisdiction, ius novit curia applies. The court has taken into account parties’ submissions on Nigerian law yet has also conducted its own research. Foreign law is ‘law’ in the civil law; not ‘fact’ as in the common law.
- Claimants suggest that in the events in Ogoniland Shell acted as one organisation and treated the issue as one engaging the Shell concern as a whole (4.7 in fine);
- Claimants purposedly do not wish their claim to be qualified as one engaging piercing of the corporate veil; duty of care; shareholders responsibility; or tort of negligence. Rather, as one engaging the Shell concern directly in a suit on infringement of human rights included in the African Charter on Human and Peoples Rights (ACHPR) and the Nigerian constitution. Tort is only suggested as an alternative should the court not follow the arguments on the basis of human rights (4.8).
- At 4.12 the Court accepts the horizontal direct effect of human rights under Nigerian law, referring for that finding to Nigerian case-law. At 4.19 the Court notes the absence of statutes of limitation for human rights violations under Nigerian law: thus qualifying this as an issue of substance (lex causae), not procedure (lex fori). It revisits the statute of limitation issue at 4.47 ff (holding that under Nigerian law the suits can still be brought).
- At 4.26 the court applies A8(1) BIa and A7 Dutch CPR in globo, given the same lines of interpretation, and finds succinctly that all conditions (Kalfelis; Roche Nederland; The Tatry) are met. It remarks at 4.26 in fine that given the same situation of law and fact, it was predictable for all parties that they might end up being sued in any of their corporate siblings’ domicile.
- At 4.27 the court discussed summary dismissal. As seen in Vedanta, despite Owusu European courts are within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. However this only applies against non-EU based defendants. Application of Article 8(1) does not allow such summary dismissal for EU-based defendants (see also C-103/05 Reisch Montage). The Hague court reviews summary dismissal only vis-a-vis the Nigerian defendant but finds succinctly that the suit is not prima facie without merit. There is a serious issue to be tried.
- At 4.28 interestingly the Court rejects relevance of the High Court and the Court of Appeal‘s dismissal of jurisdiction in Okpabi, arguing that these courts employed ‘English law’. This underscores the argument I have made elsewhere, that there is a serious blank in the discussion on lex causae for the duty of care or, depending on the case, the piercing issue. The Dutch court here notes without hesitation that the English courts apply lex fori to that test, and so therefore, I am assuming, should they (meaning Dutch law in their case)?
- At 4.29 it looks as if the Court considers some kind of reflexive argument which defendants seem to have made. Namely that the Dutch courts should respect the exclusive jurisdictional head under the Fundamental Rights (Enforcement Procedure) – FREP Rules, for the Federal High Court in cases involving alleged infringement of human rights. However the Dutch court considers this a mere internal jurisdictional distribution rule, which does not hinder the Dutch courts in their assessment of the claims. There is no written or unwritten rule in Dutch private international law which suggests such deference to a Nigerian civil procedure rule.
Importantly, a great deal of attention at 4.30 ff goes to the debate on the use of documents obtained in US discovery, in the Dutch proceedings. A fair amount of these had to be returned following a confidentiality agreement in the US proceedings. Claimants make recourse to Article 6 ECHR to regain access for use in the Dutch proceedings however the Dutch court curtails much of that. Common law discovery rules are notoriously more claimant friendly than those of the civil law (a comment also made by Marsh CM in Glaxo v Sandoz). It leads to Shell not having to turn over quite a large part of the documents claimants had hoped to use. [Note 18 May 2019 in my original post of 17 May I had ‘common’ law and ‘civil law’ accidentally mixed up in the previous sentence].
At 4.58 ff the Court then turns to the substance of the case for case management reasons, with a view to determining which parts of the claim may be made subject to further proof. It holds in a way which I imagine must have been very disappointing for claimants. Only limited claims (of the Nigerian daughter’s involvement in the bribing of witnesses) will be allowed to continue.
The court held that claims of controlling meddling in the Nigerian court proceedings were not proven with sufficient force for these claims to continue – instead it held that Shell’s policy of silent diplomacy, in line with its business policies, had been consistently carried out.
All in all I would suggest claimants have scored clear points on jurisdiction, minor points on discovery and a disappointing outcome for them on substance. Albeit that the witness bribe leg may still lead to a finding of human rights infringement.
(Handbook of) European private international law, second ed. 2016, Chapter 8, Headings 126.96.36.199., 8.3.2.
Alien Tort Statute, anchor, Article 8(1), Article 8(1) Brussels Ia, ATS, BIa, bizhumanrights, Brussels I recast, Brussels Ia, Brussels Regulation, Certiorari, Corporate social responsibility, CSR, discovery shopping, ECLI:NL:RBDHA:2019:4233, Extraterritoriality, Foreign Legal Assistance (FLA), https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2019:6670, Human rights, Jurisdiction, Kiobel, Netherlands, Right to fair trial, Royal dutch Petroleum, Shell, USSC
Nevsun Resources Ltd. v. Gize Yebeyo Araya, et al. Some of the unanswered Kiobel and Jesner Bank issues now at the Canadian Supreme Court.
Plenty of goings-on in the Corporate Social Responsibility /mass torts category, as regular readers of the blog and /or my Twitter-feed will know. Thank you Jutta Brunnée for alerting us to Nevsun Resources v Gize Ybeyo et al, currently making its way through the Canadian Supreme Court. Thank you also Cory Wanless for pointing out the core of the issue: Nevsun are not contesting jurisdiction (its existence is secure; much like in the EU context) e.g. on forum non conveniens grounds. Rather, the Supreme Court is asked whether there should be a new tort of breach of international law, and whether the “act of state” doctrine prevents adjudication.
The first question undoubtedly will lead to a discussion of similar issues raised in Kiobel, where they were not discussed by the USSC, and in Jesner Bank, where the USCC refused to be the dealmaker on public international law. The second issue is likely to imply consideration of the very foreign poicy considerations which featured heavily in circuit considerations prior to Kiobel.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.
Act of State, Alien Tort Statute, Canada, Corporate social responsibility, CSR, Duty of care, foreign soverreign immunity, High Court, Jesner Bank, Kiobel, Nevsun, Nevsun Resources Ltd. v. Gize Yebeyo Araya, piercing the veil, Shell, Supreme Court, Unilever
For background to this week’s SCOTUS ruling in Jesner v Arab Bank see my earlier posting. Bastian Brunk has early reflection here, with good summary of the Court’s majority (as well as dissenting) opinion.
Human rights litigation under ATS is not dead. Yet it is clear it is not going to be routine, either. I find the judgment not surprising. While one could certainly from a political point of view bemoan that ATS is not providing the avenue to hold corporate excess to account, SCOTUS have a point when
- they emphasise the foreign policy intentions of the ATS when it was originally drafted. Hence the need not to ignore the same foreign policy implications 2 centuries on. Hence also my stance on JASTA.
- they highlight the continuing de lega lata situation on corporate culpability under international law: the default position remains that corporations are not subjects of public international law. Yes there are hard-core exceptions – and these may be further developing. And yes, plenty over the past 20 years have tried to change that status quo. Finally the Court could have flagged more of those attempts that raise serious doubt over the position. However it is hardly the role of the US Supreme Court single-handedly to force the hand of the league of nations.
- separation of powers in the US, too, demands Congress intervene should it want the Statute’s causes of action to be broadened.
All in all a ruling very much in Montesquieu’s spirit. Students of public international law in particular should read the judgment with care: there is plenty in there to chew over.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.
Alien Tort Statute, ATS, Corporate culpability, Corporate social responsibility, CSR, https://www.supremecourt.gov/opinions/17pdf/16-499_1a7d.pdf, https://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/16-499.htm, ICSID, Jesner v. Arab Bank, Kiobel, SCOTUS, Urbaser, USSC
I have reported before (search tag ‘CSR’ or ‘ATS) on the personal jurisdiction cases in US litigation. The United States Supreme Court this morning held in Bristol-Meyers Squibb, BMS for short. For background see earlier reporting in this post. California was held not to have jurisdiction for claims brought by non-residents. In her dissenting Opinion justice Sotomayor notes the important impact of the ruling, suggesting that a corporation that engages in a nationwide course of conduct cannot now be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State. Precedent evidently includes Bauman.
Judgment and opinion include many interesting takes on personal jurisdiction and how it should be managed.
Kenneth Argentieri and Yuanyou (Sunny) Yang have an interesting suggestion here, that ‘plaintiffs will continue to develop creative arguments to obtain jurisdiction over defendants in their preferred jurisdictions, for example, by arguing that a corporation’s registration to do business in a state or designation of an agent to accept service in a state constitute consent to the jurisdiction in that state. Circuit and state courts are currently split on this issue, and the United States Supreme Court has not yet ruled on it.’ We are not a the end of the personal jurisdiciton road.
02-md-1499, Alien Tort Statute, Apartheid, BMS, Bristol Meyers, Colonialism, Comity, Corporate social responsibility, CSR, Daimler, DaimlerChrysler, DaimlerChrysler v Bauman, Extraterritoriality, Germany, http://opiniojuris.org/wp-content/uploads/17-Apr-SDNY-Opinion.pdf, https://www.supremecourt.gov/opinions/16pdf/16-466_1qm1.pdf, Human rights, In re South African Apartheid Litigation, Jurisdiction, Kiobel, Lungisile Ntsebeza et al v Ford General motors and IBM, Namibia, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, SC, SCOTUS, Tort, United States Supreme Court, USSC
Jesner v Arab Bank. Corporate culpability, the substantive question ignored in Kiobel, makes certiorari.
Update 13 October 2017: Oral hearing took place this week. See here for reporting in particular on Gorsuch J’s unexpected line of questioning.
Thank you, Ludo Veuchelen, for alerting me to Adam Liptak’s reporting on Jesner v Arab Bank, in which certiorari was granted by the United States Supreme Court early April. The case may finally have us hear SCOTUS’ view on the question which led to certiorari in Kiobel but was subsequently ignored by the Court: whether corporations can be culpable for violation of public international law. ‘May’ is probably the keyword in the previous sentence.
Update 18 January 2018 One thing to look out for is whether SCOTUS will refer to developments in ICSID /World Bank arbitration, particularly Urbaser v Argentina where the Panel noted at 1195
‘it can no longer be admitted that companies operating internationally are immune from
becoming subjects of international law. On the other hand, even though several initiatives undertaken at the international scene are seriously targeting corporations human rights conduct, they are not, on their own, sufficient to oblige corporations to put their policies in line with human rights law. The focus must be, therefore, on contextualizing a corporation’s specific activities as they relate to the human right at issue in order to determine whether any international law obligations attach to the non-State individual.’
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.
Alien Tort Statute, ATS, Corporate culpability, Corporate social responsibility, CSR, https://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/16-499.htm, ICSID, Jesner v. Arab Bank, Kiobel, SCOTUS, Urbaser, USSC
Institute of Cetacean Research v. Sea Shepherd Conservation Society: A great illustration of (failure of) injunctive relief under ATS.
Institute of Cetacean Research v. Sea Shepherd Conservation Society has recently come to my attention thanks to Juliett Hatchett over at Baker: her analysis is spot on and I am happy to refer to it. She summarises the case as the district court confirming that perpetrating and funding piracy and unsafe navigation are within the scope of ATS jurisdiction, but holding that there is no enforceable international norm against whaling or financing terrorism.
The case is not easy to find however Sea Shepherd tend to link to court documents in their updates on the litigation.
I flag the case mainly to bring it to readers’ attention that CSR litigation can be done proactively: one need not wait for alleged violations of relevant legal standards to seek to seize a court. Exactly a point I assessed in the context of vulture fund litigation, end of May. (And in forthcoming paper).
Alien Tort Statute, ATS, CSR, injunction, Institute of Cetacean Research v. Sea Shepherd Conservation Society, Japanese whaling, No. 11-cv-2043, proactive litigation, Sea Shepherd, vulture funds, Whaling
Update 21 June 2016 see also application with respect to the extraterritorial impact of the US ‘Rico’ (anti-racketeering) Act in RJR Nabisco, Inc. V European Community.
In Ranza v Nike, the Court of Appeal for the ninth circuit confirmed the high hurdle to establish personal jurisdiction over foreign corporations in the US, following the Supreme Court’s decisions in Kiobel and Bauman /Daimler. Trey Childress has good summary here and I am happy largely to refer.
Loredana Ranza is a US citisen, resident in the EU (first The Netherlands; Germany at the time of the court’s decision). She seeks to sue against her Dutch employer, Nike BV, and its parent corporation, Nike inc. for alleged violation of federal laws prohibiting sex and age discrimination. The Dutch equality Commission had earlier found the allegations unfounded under Dutch law.
Of particular interest are the Court’s views on the attributability test /piercing the corporate veil following Daimler and Kiobel. The Court held (p.15 ff) that prior to Daimler, personal jurisdiction over the mother company could be established using either the agency or the alter ego test, with the former now no longer available following Daimler. Under the Agency test, effectively a type of abus de droit /fraus /fraud, plaintiff needed to show that the subsidiary performed services which were sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation’s own officials would undertake to perform substantially similar services. Daimler, the Court suggested in Ranza, held that the agency test leads to too broad a jurisdictional sweep. That leaves the alter ego test: effectively, whether the actions prima facie carried out by the subsidiary, are in fact carried out by the mother company for it exercises a degree of control over the daughter which renders that daughter the mother’s alter ego. Not so here, on the facts of the case: Nike Inc, established in Oregon, is heavily involved in Nike BV’s macromanagement, but not so ‘enmeshed’ in its routine management of day-to-day operation, that the two companies should be treated as a single enterprise for the purposes of jurisdiction.
For good measure, the Court also confirmed application of dismissal of jurisdiction on the basis of forum non conveniens.
764 F. 3d 129, Alien Tort Statute, alter ego, attributability, Comity, Corporate social responsibility, CSR, DaimlerChrysler, DaimlerChrysler v Bauman, daugther company, Extraterritoriality, FNC, Forum non conveniens, http://cdn.ca9.uscourts.gov/datastore/opinions/2015/07/16/13-35251.pdf, http://www.supremecourt.gov/opinions/13pdf/11-965_1qm2.pdf, https://www.law.cornell.edu/supremecourt/text/15-138?utm_source=@USSupremeCourt, Human rights, Jurisdiction, Kiobel, Mother company, Nike, Piercing the corporate veil, Regulation 1215/2012, Rio Tinto, RJR NABISCO, INC. v. EUROPEAN COMMUNITY, SC, United States Supreme Court, USSC
- R v P: Szpunar AG confirms the absence of a general forum non conveniens rule in EU law. 23/08/2019
- Tibor v DAF: CJEU confirms markets affected by cartel as locus damni for end-users. 22/08/2019
- Dinant Bar v maître JN. Bar membership fees. Saugmansdgaard ØE on whether they are at all ‘civil and commercial’ and if so, whether they are ‘contractual’. 21/08/2019
- Koza v Akcil: The UK Supreme Court does not follow Court of Appeal on exclusive jurisdiction for company matters. 15/08/2019
- Politus BV. The Nyrstar (Belgium) scheme of arrangement’s jurisdictional confirmation. 13/08/2019
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