Posts Tagged CSR

Chevron /Ecuador: Ontario Court of Appeal emphasises third parties in piercing the corporate veil issues.

In Chevron Corp v Yaiguaje, the Canadian Supreme Court as I reported at the time confirmed the country’s flexible approach to the jurisdictional stage of recognition and enforcement actions. Following that ruling both parties files for summary judgment, evidently advocating a different outcome.

The Ontario Court of Appeal have now held in 2018 ONCA 472 Yaiguaje v. Chevron Corporation that there are stringent requirements for piercing the corporate veil (i.e. by execution on Chevron Canada’s shares and assets to satisfy the Ecuadorian judgment) and that these are not met in casu.

Of particular note is Hourigan JA’s argument at 61 that ‘the appellants’ proposed interpretation of the [Canadian Corporation’s] Act would also have a significant policy impact on how corporations carry on business in Canada. Corporations have stakeholders. Creditors, shareholders, and employees, among others, rely on the corporate separateness doctrine that is long-established in our jurisprudence and that is a deliberate policy choice made in the [Act]. Those stakeholders have a reasonable expectation that when they do business with a Canadian corporation, they need only consider the liabilities of that corporation and not the liabilities of some related corporation.’ (emphasis added by me, GAVC)

Blake, Cassels and Graydon have further review here. Note that the issue is one of a specific technical nature: it only relates to veil piercing once the recognition and enforcement of a foreign ruling is sought.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 8.

 

 

 

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Jesner v Arab Bank. Scotus does not play ball on corporate culpability under international law.

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.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.

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Human rights, CSR: Court of Appeal confirms lack of jurisdiction in Okpabi.

Update 16 May 2018 Vedanta have been given permission to appeal to the Supreme Court.

Update 7 March For a great supplement simply refer to Penelope Bergkamp’s post in which she discusses the wider issues of parent liablity v veil piercing etc.

The Court of Appeal, referring powerfully ia to VTB, has confirmed (albeit with dissenting opinion) lack of the English courts jurisdiction in [2018] EWCA Civ 191 Okpabi et al v Shell. I reviewed the High Court’s decision in same here. Plenty of the High Court’s considerations. e.g. (pro inspiratio) joinder under Brussels I Recast, and the optionally distributive lex causae rule under Article 7 Rome II, do not feature in the Court of Appeal’s approach.

The crucial take-away from the judgment is that the English courts do not believe that headquarter instructed mandatory compliance, equates control. This runs along the lines of Scheindlin USDJ’s approach in Apartheid.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

 

 

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Court of Appeal confirms jurisdiction in Lungowe v Vedanta and Konkola.

Update 15 January 2019 see intervening party submission by CORE et al here. The case is being heard this week and will one assumes be relevant for other cases en route, including Samarco.

Update 16 May 2018 Vedanta have been given permission to appeal to the Supreme Court.

I reviewed the High Court’s decision in Lungowe here. In [2017] EWCA Civ 1528 the Court of Appeal has now confirmed jurisdiction against the non-UK based defendants on largely the same, if slightly more structured and expanded arguments as the High Court.  (Per Owusu, jurisdiction against the UK-based defendant is undeniable; the non-UK defendants need to be joined on the basis of residual English conflicts law).

Ekaterina Aristova has analysis of Simon LJ’s leading judgment here – I am happy to refer. Of particular note is the much more reserved approach of the Court of Appeal on the merits issue of the claim. As I noted in my review of Okpabi v Shell at the High Court, in that case Fraser J looked in serious detail into the issue of merits: not, I believe, justified at the jurisdictional stage. Appeal against Fraser J’s finding will be heard by the Court of Appeal.

Geert.

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

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Cooper v. Tokyo Electric Power. Fukushima in the US courts.

Expect a series of blog postings in the next few weeks on developments which occurred a few weeks or even months back. I have been squirreling away a series of judgments and other developments, with a view to exam season. Some of them I did use in my exam papers – some of them I did not.

Update 24 January 2018 Imamura et al. v General Electric Company and ‘Does 1-100’ employs the same jurisdictioal opening to forum shop in the US. See here for background.

nCooper v. Tokyo Electric Power [plaintiffs in the case are a group of service members in the U.S. Navy who were deployed to Operation Tomodachi, a relief effort in the immediate aftermath of the massive earthquake and tsunami; they allege they were exposed to radiation during the deployment] by the US Court of Appeals, ninth circuit, is a direct (and rare in its directness) example of how jurisdictional rules are used to help co-ordinate a country’s diplomatic efforts. In this particular case, the Court gives direct support to the State Department’s view that in order for others to be encouraged to accede to the Convention on Supplementary Compensation for Nuclear Damage (“CSC”), its main jurisdictional rule (granting exclusive jurisdiction to the country of the locus delicti commissi) must not be achievable via an application of comity in the US courts. For further background and overview see  Elina Teplinsky, and Meghan Claire Hammond here.

That plaintiffs are US citisens plays a major role in the court ruling out forum non conveniens.

In some of the corporate social responsibility /alien tort statute cases that I have reported on in the blog (particularly, Rio Tinto), foreign policy openly plays a role, too, and in Kiobel itself, in the lower courts, the impact of jurisdiction on US foreign policy was debated, too. It is always refreshing to see courts highlight the issue openly. For in many jurisdictions, such obvious impacts are brushed under the carpet.

Geert.

 

 

 

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SCOTUS holding in Bristol-Myers Squibb BMS further restricts personal jurisdiction in State courts.

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.

Geert.

 

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Garcia v Total Gabon: Stay of English proceedings with (potential) lis alibi ex-EU.

Thank you very much indeed Sarah Venn and Emma Hynes both for flagging Garcia v BIH, Total Gabon and Sigma, [2017] EWHC 739 (Admlty), and (Emma) for providing me with copy (Bailii are not yet running it). This case is extremely suited to an oral exam of conflict of laws: in a written exam to many issues would have to be discussed. (Mine this term are mostly written. Hence I’ll run this piece early).

Claimant is a French national who worked as a professional diver offshore Gabon, West Africa, and suffered catastrophic brain injury which he blames on poor working practices on the second defendant’s site (Total Gabon), which is where he was working. He was employed by first defendant BIH, a UK based company, with choice of court and governing law made for English courts cq English law. First defendant is clearly domiciled in the UK and the Brussels I Regulation clearly applies to it. The third defendant Sigma, was contracted by Total Gabon. Claimant’s position is that he was deployed by BIH to work under the control of Sigma on the site which was, or should have been, supervised by Total Gabon. Total Gabon claim the contractual relationships between it and Sigma prevent a claim against the former.

BIH is small fish which may even have been struck off the company register. It is clear that plaintiff will not receive from BIH the amounts he needs for his constant medical care.

A default judgment was issued against BIG who did not engage with proceedings – at any rate jurisdiction against BIG per Owusu (with which readers of this blog are now ad nauseam familiar) could not be dismissed; . Total Gabon contest jurisdiction on the basis that England and Wales is not the appropriate forum.

This is not said in so many words in the Judgment however the presence of an anchor defendant per Article 4 Brussels I Recast, is of no relevance where the co-defendants are not domiciled in the EU. The regulation cannot be used to justify such anchor, residual conflicts rules take over.

Jervis Kay QC AR considers many cases which I have reported on before: VTB, Owusu, Lungowe, Spiliada. Lungowe in particular is considered by Mr Kay, including the issue of abuse of the use of anchor defendants and (at 23 in fine) the acknowledgment, implicitly (I wrote it explicitly in my review of the case) that of course EU precedent in this respect is pro inspiratio only.  Applying English residual conflicts rules, the judge then reviews whether there is a serious case (‘a real prospect of succeeding’) that could be made against Total Gabon, either one in tort or one in contractual liability. He found there is such real prospect, for both, but especially for tort.

However the case eventually (access to justice issues in Gabon were not flagged neither discussed) stumbles on the question whether the English courts would be the most appropriate forum: it is found they are not. Inspiration is found especially in Erste Group Bank [2015] EWCA Civ 379, a case in which forum non conveniens was applied even against an England-domiciled defendant because there had already been submission to Russian jurisdiction. In Garcia, the Court applies Erste per analogiam: the parallel, Mr Kay suggests, is that the case against the first defendant has effectively been wrapped up. The spectre of competing judgments therefore, Mr Kay holds, does not arise (at 36) and England is therefore not the appropriate forum. If the case is appealed I would imagine this altogether brief consideration of appropriateness and the parallel seen with Erste, I would imagine would be its Achiless heel.

(One of the considerations which defendant, per VTB, considers, is that as a rule of thumb, Gleichlauf is to be preferred (I have often found this a less attractive part of the Supreme Court’s ruling). Which is why defendant considers Rome II: if the English courts were to hear the case, they would have to apply Rome II even if their jurisdiction is a result of residual English conflicts rules).

An alternative action for Mr Garcia, one imagines, would have been (or perhaps it still is) to use Total France SA as anchor in France, to try and have the subsidiary’s actions assigned to it: a more classic CSR case.

Anyways, I think you will agree that one could have a good chinwag on this judgment at oral exam.

Geert.

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