Tag: CSR

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French court rejects far-reaching role for interlocutory judge in applying French duty of care law. Holds claims against Total are inadmissible.

Thank you Anil Yilmaz, whose reply to a Tweet made me aware of the judgments of end of February in the claim brought by a number of NGOs against Total viz its activities in Uganda. The claim is an ex ante claim brought on the basis of the French statute which introduced the so-called devoir de vigilance or duty of care in the business and human rights sector. It argues that Total’s plan for the Ugandan activities at issue, fail the standard of the Act.

I had earlier flagged the procedural issue in the case and Cédric Helaine has review and links to the judgments here. The court (p.18) notes that the implementing decree which is supposed to detail the requirements of the law, has still not been adopted and that the law itself does not offer a blueprint, a decision tree, a list of indicators, merely indicating that the plan needs to include a ‘reasonable’ list of both pressure points and measures to address these, and that the plan moreover is to be drafted in consultation with stakeholders. In the absence of Government clarification of what this might entail, the court then points out that the reasonable or not character of the plan needs to be assessed by the courts themselves yet (p.20-21) and that a judge in an interlocutory proceeding in particular, can only be asked to discipline those plans which are non-existent, or clearly insufficient (which the judge finds is not the case here), yet cannot be expected to judge the plan’s reasonableness:

S’il entre dans les pouvoirs du juge des référés de délivrer une injonction en application des dispositions susvisées lorsque la société, soumise au régime du devoir de vigilance n’a pas établi de plan de vigilance, ou lorsque le caractère sommaire des rubriques confine à une inexistence  du plan, ou lorsqu’une illicéité manifeste est caractérisée, avec
l’évidence requise en référé, en revanche, il n‘entre pas dans les pouvoirs du juge des référés de procéder à l’appréciation du caractère raisonnable des mesures adoptées par le plan, lorsque cette appréciation nécessite un examen en profondeur des éléments de la cause relevant du pouvoir du seul juge du fond.

The judge concludes that in the case at issue, there is no such obvious shortcoming and that the request therefore is inadmissible given the role of the interlocutory proceedings.

This judgment of course says little on the role of the Act in claims on the merits of duty of care in which Acts such as these play a role (as opposed to claims merely arguing the planning stage is insufficient) however it clearly puts pressure on the French government urgently to produce its more detailed order, and it confirms the need to introduce detail either in these Acts (including in the recently adopted EU Directive) themselves or, swiftly, in executive follow-up. This avoids that judges use trias politica as a way out of having to judge the issues on their merits.

Geert.

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Jalla v Shell – continued. A further judgment in the Bonga Spill litigation considers Article 7 Rome II, and the Nigerian EEZ as a ‘country’ under Article 25 of the Regulation.

Update 10 May 2023 In Jalla and another v Shell International Trading and Shipping Company and another [2023] UKSC 16, the Supreme Court has now held that the spill was a one-off event, not a continuing nuisance, and therefore time-barred under applicable Nigerian law. Update 15 03 2024 see Jalla & Ors v Royal Dutch Shell PLC & Ors [2024] EWHC 578 (TCC) for some of the costs consequences.

Jalla & Anor v Shell International Trading and Shipping Company Ltd & Anor [2023] EWHC 424 (TCC) is a follow-up of earlier, procedural (including jurisdictional) issues which I discuss here.

[1]-[2] The 2011 Bonga Spill emanated from an offshore floating production, storage and off-loading facility (“the Bonga FPSO”), located approximately 120 kilometres off the Nigerian coastline of Bayelsa State and Delta State within the Nigerian Exclusive Economic Zone. The Spill was caused by a rupture of one of the pipelines connecting the Bonga FPSO to a single point mooring system (“SPM”), both of which were operated and controlled by one of the defendants, Shell Nigeria Exploration and Production Company Ltd (“SNEPCo”), a Nigerian company regulated by the Nigerian governmental authorities. The technical manager of the vessel, the MV Northia, that was loading from the Bonga FPSO at the time of the spill was another defendant, Shell International Trading and Shipping Company Ltd, (“STASCO”), a company domiciled and registered in the UK.

Anchor defendant is STASCO. SNEPCo is co-defendant.

The High Court had determined that the claims for damage caused by the Spill  could not constitute a continuing nuisance until any pollution was remedied, so as to extend the limitation period and defeat the defendants’ limitation defence; it held claimants each had a single claim in nuisance in respect of any damage caused by the Bonga Spill, such cause of action accruing when their land and/or water supplies were first impacted by the oil. Claimants’ appeal against that part of the judgment as I reported earlier was dismissed by the Court of Appeal [2021] EWCA Civ 63  and this “Continuing Nuisance Appeal” is now being appealed to the Supreme Court.

[4] Current case is to determine the date on which actionable damage, if any, was suffered by the claimants as a result of the Bonga Spill, for the purpose of deciding whether any of the claims against the anchor defendant, STASCO, are statute-barred for limitation and, therefore, whether E&W courts have jurisdiction to determine the substantive claims. 

[39] Stuart-Smith J (as the then was), alongside the jurisdictional challenges, had further held that the High Court had no discretion to allow, or would refuse, amendment of the claim form to join STASCO and the amendment to add allegations against STASCO, if and to the extent that the applications were made after the expiry of the relevant limitation period. The allegations against STASCO in respect of its responsibility for the  were deemed by the court not to have been made until 2 March 2020.

[40] ff

The issue of jurisdiction as against SNEPCo, a Nigerian corporation, is dependent on there being a valid claim against STASCO, a UK corporation. The court rejected other jurisdictional challenges made by the defendants but was unable to finally dispose of the challenge to jurisdiction because it was subject to the outstanding issue as to whether the claims against STASCO were statute-barred. If the claims against STASCO, the anchor defendant, were statute-barred, there would be no basis on which service out of the jurisdiction against SNEPCo could be permitted and the court would have no jurisdiction to determine any of the claims.

Given the significance of the limitation issue, the court ordered that there should be a trial of preliminary issues to determine in respect of all claimants the date on which they suffered damage, the appropriate limitation period and limitation as a defence to the claims.

Parties agree that Nigerian Law applies to the claims relating to the spill, including the limitation period applicable to the claims (the case therefore does not engage with the outstanding issue of the treatment of limitation under Rome II, discussed most recently in Bravo v Amerisur Resources (Putumayo Group Litigation). The issue between the parties is whether the applicable limitation period is six years, as submitted by the claimants, or five years, as submitted by the defendants.

O’Farrell J holds that given the date of damage, none of the claims in these proceedings was made against STASCO within any applicable limitation period. Obiter, she holds on the limitation issue anyway.

The relevant law that applies in Nigeria is the (English) Limitation of Actions Act 1623 which provides for a limitation period of six years for claims that would amount to tortious claims. The National Assembly for the Nigerian Federation has not enacted any general limitation statute and no such provision is made in the Constitution. The State legislature for Delta State however has enacted a general limitation statute. Section 18 of the Limitation Law of Delta State 2006 (“the Delta State Limitation Law”) provides for a limitation period of five years for claims in tort. 

[306] Claimants’ position is that the limitation period applicable to their claims is the six-year period provided for by the 1623 Act. In the absence of specific federal legislation on this issue, they argue this residual provision is the limitation law generally applicable in Nigeria, including at a federal level, by virtue of section 32(1) of the Interpretation Act 1964; further, that the Delta State Limitation Law is inapplicable in the Federal High Court; only federal legislation can apply, irrespective of where the Federal High Court sits.

Further, [307], claimants argue they are entitled by Article 7 Rome II  to choose the law applicable in the Nigerian Exclusive Economic Zone (“EEZ”) as the lex causae governing their claims for environmental damage, as the country where the event giving rise to the damage occurred, the locus delicti commissi, Handlungsort. The EEZ falls within the control of the Federal Government of Nigeria; as such, it would be subject to the Nigerian Federal law of torts and the residual 1623 Act limitation period.

[308] Defendants’ position is that the limitation period applicable to the claims is the five-year period provided for by the Delta State Limitation Law. The relevant Federal High Court for the claims would be the Federal High Court in Delta State, as the place where the alleged damage occurred. They suggest Nigerian authorities on limitation confirm that if a local limitation law exists in the relevant state, that law applies to the claim; and the limitation statute of each state is territorial in scope. On that basis, the Delta State Limitation Law applies to any action brought in the territorial area of Delta State, including the Federal High Court in Delta State.

[309] viz A7 Rome II they argue the Nigerian EEZ is not a “country” for the purpose of Article 25(1) Rome II [‘“Where a State comprises several territorial units, each of which has its own rules of law in respect of non-contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation”], that it has no applicable limitation law and that it would not override the jurisdiction of the Federal High Court to determine the claims in these proceedings.

The judge [336] ff holds the country in which the alleged damage occurred is Delta State, making the law of Delta State the default choice of law under Article 4(1) Rome II; that although the claims are for environmental damage, and the event giving rise to the alleged damage occurred at the FPSO within the Nigerian EEZ, the EEZ is not a country within the meaning or A25(1): Nigeria is a Federation with 36 states plus the FCT of Abuja. The EEZ is not a territorial unit and does not comprise one of those states; and the EEZ does not have its own rules of law in respect of non-contractual obligations.

The remainder of the judgment deals with issues of proof of foreign customary law.

Interesting!

Geert.

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Bravo v Amerisur Resources (Putumayo Group Litigation). Claimants survive time-bar challenge despite questionable finding on Rome II’s evidence and procedure carve-out.

Update 03 10 2023 the claim has now settled.

In Bravo & Ors v Amerisur Resources Ltd (Re The Amerisur plc Putumayo Group Litigation) [2023] EWHC 122 (KB) claimants, who live in remote rural communities in the Putumayo region of Colombia, seek damages from the defendant pursuant to the Colombian Civil Code, and in reliance on Colombia Decree 321/1999, in respect of environmental pollution caused by a spill (or spills) of crude oil on 11 June 2015. The claimants’ two causes of action are pleaded under the headings (i) guardianship of a dangerous activity and (ii) negligence. It is common ground between the parties that the oil spillage was the result of deliberate acts by terrorist organisation, FARC.

Steyn J yesterday held on preliminary issues, including statute of limitation. Defendant contends that the two year limitation period provided by relevant Colombian law re Colombian group actions (‘Law 472’), applies to the claim. Parties agree that in substance, Colombian law is lex causae per A4 and A7 Rome II.

Claimants rely on two points of English law and one of Colombian law. First, they contend that the relevant Article of Law 472 is a procedural provision within the meaning of A1(3) Rome II, and therefore it falls outside the scope of Rome II. I believe they are right but the judge did not. Secondly, they refute the defendant’s contention that this action should be treated as a group action under Law 472. Thirdly, even if they are wrong on both those points, they submit that application of the time limit of Law 472 would be inconsistent with English public policy, and so the court should refuse to apply it pursuant to A26 Rome II.

All but one links to case-law in this post refer to my discussion of same on the blog, with pieces of course further linking to the judgment. Apologies for the pat on my own back but it is nice to see that all but one (Vilca, where parties essentially agreed on the Rome II issue) of the cases referred to in the judgment all feature on the blog.

For claimants, Alexander Layton KC referred to Wall v Mutuelle de Poitiers Assurances and Actavis UK Ltd & ors v Eli Lilly and Co (where the issues were discussed obiter). Defendants rely on Vilca v Xstrata Ltd [2018] EWHC 27 (QB), KMG International NV v Chen [2019] EWHC 2389 (Comm), Pandya v Intersalonika General Insurance Co SA [2020] EWHC 273 (QB), [2020] ILPr 44 and Johnson v Berentzen [2021] EWHC 1042 (QB).

My reception of the High Court’s conclusions in KMG, Pandya, and Johnson was not enthusiastic, and in my review of Pandya in particular I also suggest that the same scholarship relied on in this case, did not actually lend support to the  defendant’s arguments, and I stand by that, too.

Hence Steyn J’s conclusion [102] that Article 15 Rome II

contains a list of matters which are ‘in particular’ to fall under the designated law, irrespective of whether they would be classified as matters of substance or procedure

and [106]

that the provisions of article 15 of Rome II should be construed widely

in my view is wrong. (Note the linguistic analysis in [110] will be of interest to readers interested in authentic interpretation of multi-lingual statutes).

[109] The key question then is which Colombian limitation period applies to these English proceedings, which brings the judge to discuss [115] ff ia Iraqi Civilians v Ministry of Defence (No.2). Here the judge, after discussing Colombian law evidence, holds [137]

that this action has not been brought under Law 472, and it does not fall to be treated as if it had been brought as a Colombian group action. Therefore, this action is not time-barred pursuant to article 47 of Law 472.

Hence claimants lost the argument on Rome II’s procedural exception but won the argument on application of Colombian law.

[139] ff whether the limitation rule should be disapplied pursuant to A26 Rome II is discussed obiter and summarily, with reference of course to Begum v Maran which I discuss here. The judge holds A26’s high threshold would not be met.

Both parties have reason to appeal, and one wonders on which parts of Rome II, permission to appeal will be sought.

Geert.

EU Private International Law, 3rd ed. 2021, ia para 4.80.

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Maceió victims v Braskem. Rotterdam court refuses application for Article 34 lis pendens stay.

Update 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

The (first instance) court at Rotterdam has upheld anchor jurisdiction and refused an application for an Article 34 Brussels Ia stay. The case concerns victims of earthquakes in the Brasilian Maceió region, which they argue are caused by the mining activities of Braskem. The judgment is only available in Dutch.

The Dutch anchor defendants are intra-group suppliers of ia specialty chemicals, and finance. The main target of the claim of course is the Brasilian mother holding. Whether the latter can be brought into the proceedings is not subject to Brussels Ia but rather to Dutch residual rules. However just as in e.g. Shell, the Dutch rules are applied with CJEU authority on Article 8(1) Brussels Ia firmly in mind. In much more succinct terms than the English courts in similar proceedings, the Dutch courts [6.16] finds the cases so ‘closely related’ that it is expedient to hear the cases together. It emphasises that while the respective roles and liabilities of the various undertakings concerned is likely to be very different, there is a bundle of legal and factual questions that runs jointly throughout the various claims. [6.18] it emphasises that the decision to base the European headquarters of the group, and the finance activities at Rotterdam, implies that the concern reasonably could have foreseen it would be sued here.

Equally succinctly [6.19 ff] the Court rejects the argument that the use of the Dutch corporations as anchor defendants is an abuse of process. Such abuse must be narrowly construed and  it is far from obvious that the claim against the anchors is entirely without merit.

Seemingly defendants tried to argue forum non conveniens however [6.23] the court points out such construction does not exist in The Netherlands and obiter it adds (like the Court of Appeal in Municipio) that practical complications in either hearing of the case or enforcement of any judgment are not a reason to dismiss jurisdiction.

Request for a stay in the procedures viz the Brasilian corporations [6.26] is rejected on (Dutch CPR) lis pendens rules for the parties in the proceedings are not the same. Article 34 is dealt with in two paras (quite a contrast with the E&W courts). The pending procedures vis-a-vis Article 34 are not, it seems, Brasilian Civil Public Actions – CPAS (these were at issue in Municipio de Mariana (of some interest is that the law firm behind the claims is the same in both cases)). Rather, pending liquidation proceedings are considered as the relevant assessment points. [6.28] obiter the court finds that the cases are most probably not related. It grounds  its decision however on a stay not being in the interest of the sound administration of justice. The court holds that the Brasilian proceedings are not likely to be concluded within a reasonable time. Defendants’ commitment at hearing to speed up the process in Brasil, are met with disbelief by the court given the defendants’ attitude in the Brasilian procedures hitherto.

[6.32] permission to appeal the interim judgment on jurisdiction is denied. This means that, like in Airbus, discussion on the private international law issues is likely only to resurface at the stage of appealing the judgment on the merits, too.

An important judgment: other than Petrobas, there are to my knowledge no continental judgments discussing Article 34 in this intensity (there are E&W judgments, as readers of the blog will know).

Geert.

See also ‘Dude, where’s my EU court? On the application of Articles 33-34 Brussels Ia’s forum non conveniens- light rules’, Journal of Private International Law, forthcoming 2022.

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Municipio de Mariana v BHP. Questions on Brussels Ia’s lis pendens rules viz third states remain. Yet overall approach to environment, human rights suits against corporations in their domicile, to be applauded.

Update 22 December 2023 Vale’s attempt to bounce the joinder on the basis of an  arbitration agreement between itself and BHP entities was dismissed yesterday by Waksman J: Municipio de Mariana & Ors v BHP Group (UK) Ltd & Anor [2023] EWHC 3281 (TCC)

Update 30 November 2023 Vale’s expedited request for PTA was refused by the Court of Appeal: Vale SA v BHP Group (UK) Ltd [2023] EWCA Civ 1388

Update 7 August 2023 Vale’s jurisdictional challenge was today dismissed. Update 20.10.2023 They have been refused permission to appeal that decision and are now seeking that permission direct with the Court of Appeal. In an order of 19 October [2023] EWHC 2607 (TCC), O’Farrell J has held on some consequential procedural issues (including a case-management stay) but also on some case-management consequences of Vale having opened a new route to escape being joined to the proceedings, namely an argument that the BHP defendants in the case are bound by an arbitration agreement between Vale and related entities, which in Vale’s view would lift jurisdiction for the E&W courts to join it to the proceedings.

Update 30 June 2023 the UKSC has refused permission to appeal the Court of Appeal decision re jurisdiction. More here.

Update 18 May 2023 in the meantime a fresh jurisdictional challenge will be fought out as a result of BHP belatedly requesting for Vale to be brought into the proceedings, with Vale contesting jurisdiction. There issue is flagged in Municipio De Mariana v BHP Group (UK) Ltd & Anor [2023] EWHC 1134 (TCC) where  some case-management decisions were taken, too.

Update 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

Municipio De Mariana & Ors v BHP Group (UK) Ltd & Anor [2022] EWCA Civ 951 (background to the case here) is the appeal against the stay (and partial strike-out), on forum non conveniens, A33-34 Brussels Ia and case-management grounds ordered by Justice Turner. The Court of Appeal has overturned all three reasons for a stay. Bar appeal with the Supreme Court (which the defendants are likely to seek) the claimants may now bring their claim in the courts of England and Wales.

For the benefit of full disclosure I should add I am instructed for claimants in the case; this post however does not speak for claimants or co-counsel in the case and is merely my academic view on the judgment.

The judgment runs to 107 pages (not excessive given the issues and facts covered). There is little point in me rehashing it all (again, reference to my previous post may be useful). 40 pages are spent describing the applicable law in Brasil and the various proceedings underway there. This is of particular importance seeing as the crux of all three defences advanced is that the proceedings are already underway in Brasil and should not be duplicated by an English procedure.

In the main:

Abuse is dealt with [170] ff, with the key points for reversal listed [179] and the CA’s own analysis detailed thereafter, summarising in [234] ff.

Of particular note here is the rebuke of Justice Turner’s finding of ‘unmanageability’ of proceedings (which the CA as such does not believe will be the case) having dominated his subsequent findings on other elements of abuse, and the use of forum non conveniens criteria for the assessment of abuse.

[182] Consideration should have been made of the question of the availability of full redress in Brazil. To those following business and human rights litigation, this will be a welcome finding. [186] Support for manageability of proceedings not having a place in the abuse assessment (other than [187] if the claimant were to have vexatiously made the proceedings unmanageable himself), was found in Mastercard v Merricks [2020] UKSC 5.

[190] discussion of what Turner J at the abuse level,  saw as complications arising out of the existence of parallel proceedings in Brazil, already indicate the direction the Court took on the forum non and A34 issue: the many differences between the English and the Brazilian proceedings.

The Article 34 Brussels Ia application is discussed [237] ff and is of particular relevance to readers of the blog.

Firstly [256] the Court of Appeal settles for now the Privatbank /Euroeco discussion on ‘expediency’ (see also ia SCOR v Barclays) in favour of the former: What is required to fulfil A34(1)(a)’s condition is that it must be desirable for the two actions to be heard and determined together in order to avoid the risk of irreconcilable judgments, irrespective of whether that is a practical possibility. (Claimants have reserved the right to contest this should the matter go before the Supreme Court).

Further [257] the test of relatedness for the purposes of A34 is held by the CA to be a broad test: [243] per Tesauro AG in C-406/92 The Tatry, whenever the judge seized of the stay request considers that the reasoning adopted by the court hearing the earlier proceedings may concern issues likely to be relevant to its own decision, the cases can be said to be related. This is opposed to the narrow approach in the House of Lords Sarrio SA v Kuwait Investment Office [1991] AC 32: there the HoL held that for there to be a risk of irreconcilable judgments the inquiry is limited to “primary” issues which are those necessary to establish the cause of action, and does not include issues which the court might or might not decide and which would not be essential to its conclusion.

On the condition ‘that the court of the third State will give a judgment capable of recognition‘, at the hearing the question was asked whether a twofold condition exists, namely (i) that a judgment was expected as a matter of fact and (ii) that the expected judgment was one which was capable of recognition and, where applicable, enforcement. The Court [260] supports the view that only the second (ii) condition applies. I do not think that is correct and I am not convinced by the Court’s travaux analysis on this point [266] – I detail this in my forthcoming paper in the JPIL. As for that second condition, the CA holds [269] that ‘the exercise at this stage is a conceptual one, looking at the type of judgment to which the third state pending action may give rise, and evaluating whether it attracts recognition, or where applicable enforceability.’

‘Necessity for the proper administration of justice’ is dealt with [273] ff (although it confusingly includes discussion of more than just this ultimate A33-34 condition), starting with the discussion whether a stay was available or could be justified on a “consolidation” basis (effectively, an allocation of jurisdiction [275], or on a “wait and see” basis [temporary case-management: wait and see whether and to what extent the outcome of the case ex-EU affects the action in the member state]. [277] Underhill LJ takes a holistic approach: Does waiting for the outcome [of the Brazilian proceedings held to be related] give rise to advantages which sufficiently outweigh any disadvantages such that a stay is necessary? [279] The CA takes a broad approach to the issues that might be considered, including issues classic to a forum non conveniens analysis. I believe that is right, with the important caveat that A34 must not effectively be conflated with forum non (which is what the first instance judge had effectively done) (compare Ness).

[282] the Court takes a formalistic (and correct) view on the ‘related proceedings’ and their being ‘pending’:

for the purposes of the article 34 application, the nature and extent of overlap which falls to be considered when addressing whether and to what extent there is a risk of irreconcilable judgments, and in considering whether that risk weighs in favour of a stay being necessary for the proper administration of justice, is limited by reference to that which might be decided in the [pending Brazilian proceedings].

In particular, an advantage eg in winding-up proceedings viz the defendants or related undertakings, which could be obtained down the line from the outcome of the related proceedings, would not be caught by the comparative overlap and the likelihood of relatedness therefore is seriously reduced ([283] contrary to Turner J’s finding that that the list of areas in which potentially irreconcilable judgments are liable to arise was “almost endless”).

[291] ff the CA makes its own assessment of the ‘proper administration of justice’ requirement given the judge’s core mistakes (particularly, his abuse conflation and the consideration given to future proceedings which are not pending).

[298] The CA holds that the continuation of the claim against BHP Australia (for which later in the judgment it finds that this is not barred on forum non grounds) in and of itself argues against an A34 stay (and that relevant parts of Lord Briggs’ speech in Vedanta do not change that).

Obiter [300] ff it lists other factors against a stay: [302] there is a real possibility that final resolution of the related BRA proceedings,  if they resume at all, is well over a decade away; [303] ‘For there to be a further delay of years, and quite possibly over a decade, before [E&W proceedings] could resume would cause very substantial prejudice to the claimants in obtaining relief, and would be inimical to the efficient administration of justice as a result of all the well-known problems which delay brings to the process’; [304] ff there are many disadvantages to the BRA proceedings including that these will not address the liability of the defendants in the E&W proceedings; [308] the degree of overlap between the proceedings is limited.

The forum non application is highly relevant given the English courts’ preponderant reliance on it, outside the BIa context, following UKSC Brownlie. Of note here is ia [345] the unrealistic prospect of the alternatives being suggested – I will leave the further forum non analysis to blogs less focused on European conflict of laws.

Rejection of a case-management stay is done succinctly, with Underhill LJ noting ia [374] that such stay would be incompatible with A34 and A4 BIa.

All in all I do not agree with each of the Court’s findings on tenets of A34, however in general the Court’s application reflects the correct approach to the Article, which very much makes a stay the exception.

Geert.

See also Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules

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Alame: Case management in yet another oil spill litigation against Shell.

Alame & & Ors v Royal Dutch Shell Plc & Anor [2022] EWHC 989 (TCC) is is a preliminary case-management order in yet another case where Nigerian claimants are suing Shell for environmental pollution in the Niger Delta.

The claims arise out of oil spills that have occurred from oil pipelines and associated infrastructure operated in the vicinity of communities in Rivers State in the Niger Delta, causing environmental damage. The Claimants’ case is that the Defendants failed to prevent, mitigate or remediate the oil contamination and they are liable to compensate the Claimants in respect of harm suffered by affected individuals and communities. The Defendants’ case is that the major sources of oil pollution are crude oil theft (bunkering) and related oil spills, artisanal refining and oil spills from assets controlled and operated by third parties, matters for which they are not responsible and, in any event, do not give rise to any liability under Nigerian Law.

The claims against the First Defendant, Royal Dutch Shell plc (“RDS”), a UK domiciled company and parent company of the Shell group, are based on common law negligence. The claims against the Second Defendant pipeline operator, The Shell Petroleum Development Company of Nigeria Limited (“SPDC”), a Nigerian registered company and subsidiary of RDS, are based on statutory breaches, common law negligence, nuisance, the classic rule in Rylands v Fletcher and trespass.

The Defendants deny liability for the pollution caused. In particular, it is pleaded that Nigerian public policy and law prescribes that oil operators are not liable to pay compensation in respect of any oil spill caused by illegal third party interference and that there is an exclusive and comprehensive statutory compensation scheme in respect of oil spills from oil pipelines and ancillary infrastructure. Further, the alleged breaches of statutory duty, negligence, nuisance and other tortious liability are denied. The alleged loss and damage is denied. The losses are too remote and/or constitute pure economic loss. It is denied that the Claimants are entitled to the relief sought. In respect of the Ogale Individuals Claim, it is asserted that a number of the claims are statute-barred.

Jurisdiction it seems, following Okpabi, is not disputed.

The judge has ordered claimants to clarify now in their pleadings, whether through the group statements of case or in the questionnaires and/or pleadings that will be attached to the group registers, the nature of the case to be advanced at trial. In other words they have been instructed to do far more factual (in terms of linking facts to individual claimants etc) material homework before the case can proceed to trial. It is the detail involved in this kind of preparatory work that makes a jurisdiction attractive, or not, for mass claims of this kind and it is generally accepted that the English GLO is not the most encouraging instrument for same.

Geert.

 

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Esther Kiobel v Shell. Dutch Court takes strict evidentiary approach in its rejection of Shell Nigeria involvement in bribery.

The Dutch court of first instance held at the end of March (English version of the judgment is here) on the merits of Esther Kiobel’s case against Shell, proceedings which she unsuccessfully tried to bring in the US under the ATS and then pursued in The Netherlands as I reported at the time.

In my earlier post I pointed out that the Dutch court narrowly construed the case that could be pursued in the Netherlands: Only limited claims, of the Nigerian daughter’s involvement in the bribing of witnesses, were allowed to continue. Those claims have now been dismissed.

The judgment is fairly succinct, many points having discussed at length in the interim jurisdictional and case-management decision. Witnesses’ recent interviews (by the Dutch courts, but without cross-examination. Not because it was not offered but because counsel did not feel the need to proceed with it) were cross-checked against earlier statements which had been entered as evidence in the US proceedings. The court [2.26] holds that

the alleged involvement of the SPDC in witness bribery is not proven with the statements of the witnesses produced by the claimants. This is also true when viewing these witness statements in conjunction.

As I pointed out here in reply to Lucas Roorda, if I were claimant’s counsel looking for appeal grounds, I would study the Dutch court’s application of Nigerian common law evidentiary standards for upholding civil liability.

The court’s approach to the witness statements is that they cannot sustain SPDC bribery involvement. The evidence of SPDC staff presence at relevant meetings (often in police stations) is, when not held to be factually (albeit on minor points) contradicted by earlier statements (going back 20 years for some of them), found to be circumstantial only. Witnesses point to people that were referred and /or pointed to when Shell-related employment (as a reward) was discussed, briefcases held by people with the outward, corporate appearance of Shell staff, people driving off in cars with corporate stickers formerly used by Shell. None of this satisfied the court’s evidentiary requirements without however proper discussion of what, under Nigerian law, that standard would require.

Geert.

 

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The European Commission’s Corporate Sustainability Due Diligence proposal. Some thoughts on the conflict of laws.

Update 03 02 2024 see text of the December 2023 trilogue compromise here, courtesy of Voss MEP.

Update 04 08 2023 See Ralf Michaels and Antonia Sommerfeld here with excellent overview of jurisdictional complications (and evasion strategies) and a proposal to manage these.

Update 06 06 2022 see further comments by Rui Dias here.

I have reported on conflict of laws (jurisdictional and applicable law) angles to the EP’s draft proposals on Corporate Sustainability Due Diligence before. As I discuss in those posts (more analysis is on NOVA’s site here), many of the suggested routes created more difficulties than they solved. In the eventual February proposal (with 71 recitals: that is poor legislative drafting), the conflict of laws ambitions are much reduced. Leigh Day have a good summary of the issues here. Thank you Jorian Hamster for poking me to put my thoughts to paper.

The jurisdictional ambition is now merely expressed in terms of regulatory scope. On p.15 under the proportionality assessment, the proposal justifies its public international scope using the effects doctrine:

The EU turnover criterion for third-country companies creates a link to the EU. Including only turnover generated in the Union is justified since such a threshold, appropriately calibrated, creates a territorial connection between the third-country companies and the Union by the effects that the activities of these companies may have on the EU internal market, which is sufficient for the Union law to apply to third-country companies.

Proposed A2(1) focuses on ‘EU corporations’ (“companies which are formed in accordance with the legislation of a Member State) and proposed A2(2) looks at non-EU corporations (“companies which are formed in accordance with the legislation of a third country”), each with relevant thresholds distinguishing between quantitative (turnover) and qualitative (risk sectors: textiles, agriculture, extractive industries) criteria.

I am not sure why the lex incorporationis is preferred as the trigger criterion. Domicile as defined in Brussels Ia‘s Article 63 could be more attractive, seeing as it captures corporations with statutory seat outside of the EU but with their central administration or principal place of business here.

‘Turnover generated in the EU’ is bound to provoke some discussions however experience from in particular competition law should be able to help here.

The most obvious anchor point for applicable law is proposed A22. This sets out the requirement for Member States to define rules governing the civil liability of the company for damages arising due to its failure to comply with the due diligence requirements, and then suggests in (5)

Member States shall ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State.

The intention of this Article is to make the national civil liability rules which Member States are due to ensure in follow-up of the future Directive, so-called ‘overriding mandatory law’ aka ‘lois de police’ aka ‘lois d’application immédiate’ under A16 Rome II. The challenge for the EU to harmonise private law, such as civil liability rules, shows in this formulation. The EC makes recourse to a Directive, not a Regulation, since (p.17)

The proposed instrument is a Directive, since Article 50 TFEU is the legal basis for company law legislation regarding the protection of the interests of companies’ members and others with a view to making such protection equivalent throughout the Union. Article 50 TFEU requires the European Parliament and the Council to act by means of directives.

Hence rather than formulating the future Directive’s liability provisions itself as of overriding EU law nature (a possibility expressly foreseen in Rome I’s rules on applicable law for contracts, but not impossible I believe within Rome II), the Directive will oblige Member States to ensure the lois de police character of their future rules implementing the Directive.

I understand the difficulty yet I think the proposal could shortcut the discussion (and avoid difficulties in case a Member State fails to declare the lois de police nature) by declaring

‘Member States’ provisions of national liability law transposing this Article are of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State.’

(the latter, in my proposal struck through part I believe is simply redundant).

In claims based on tortious liability, the Directive is most likely to be used to help establish fault (by action or omission). The remainder of the action (solidarity between various tortfeasors, damage calculation etc) will remain subject to the lex causae otherwise applicable. In claims based on unjust enrichment (a business and human rights route much worth exploring for supply chain cases) the Directive will most likely remain of smaller use seeing as these claims do not aim to establish liability, however the  paper trail which the Directive will ensure, may be of documentary use here, too.

Geert.

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Permission to appeal refused on cost issues in Malawi sexual exploitation case. Court of Appeal confirms a forum non conveniens defence cannot be brought via a cost order.

Lord Justice Coulson the other week refused [PGI Group Ltd v Thomas & Ors (Application for Permission to Appeal) [2022] EWCA Civ 233] permission to appeal against the High Court’s refusal to grant a capped cost order – CCO in the Malawi exploitation and abuse case.

Coulson LJ firstly grants that the judge may have expressed himself more clearly on some of the technical aspects of the costs in the case however did not misapply relevant CPR rules. Secondly, on the more substantive element of the case the Court of Appeal held that the judge was right to ignore the much lower cost implications of possible Malawi proceedings for to do so, as I flagged in my post on the High Court judgment, would bring in a forum non conveniens defence via the back door of cost orders: [45]:

The costs of pursuing the claim in Malawi must be irrelevant to the making of a CCO in the UK. If a claim is validly brought in the UK, then that brings with it the reasonable/proportionate costs of pursuing those proceedings in the UK.

A good judgment.

Geert.

 

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James Finlay business and human rights suit potentially puts forum non conveniens and its Brussels’ cousin to the test.

Update 28 December 2022 an application to vary the August order on grounds of comity has failed: [2022] ScotCS CSOH_94.

Update 3 September 2022 In [2022] CSOH 57 on 22 August Lord Braid granted an anti-suit injunction , ordering James Finlay to discontinue its own attempts at obtaining an anti-suit injunction in the Kenyan courts, aimed at halting the Scots collective proceedings. Lord  Braid referred ia [17] to the seminal Turner v Grovit case, of Brussels Convention fame. [42] James Finlay are found, in seeking and obtaining the Kenyan orders to have been vexatious and oppressive of the group members, whom its conduct was calculated to harass.

Update 3 February 2022 thank you Russell Hopkins for alerting us to the judgment of Lord Weir [2022] CSOH 1, [29] that the suit meets with Scottish collective action /group proceedings rules. Forum non conveniens arguments will be heard later.

I posted the Tweet below in October,  and am posting mostly to report that I do not as yet have more to go by. The suit is against James Finlay and follows in the footsteps of one brought in 2017, pre-Brexit therefore.  The 2017 action per CJEU Owusu v Jackson cannot be subject to a forum non conveniens challenge, and I am as yet not aware of an Article 33-34 Brussels IA ‘forum non light’ defence. This new, 2021 action has already been said to be met with a forum non challenge. It will be interesting to see first of all whether the forum non challenge in the latest suit will be impacted by the unavailability in principle of forum non in the 2017 suit; additionally, whether defendants are aiming to have the 2017 suit thrown out on the basis of A33-34 BIa (so far I have not seen indications that they will).

As I point out in the Tweet, had the UK been allowed to join Lugano, forum non would not be available to this newest suit.

Geert.

EU Private International Law, 3rd ed. 2021, Chapter 7.