Tag: Lex loci damni

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Arica Victims v Boliden Mineral (Sweden). Lex causae and export of toxic waste. Relevant for the business and human rights /CSR debate.

Update 5 February 2021 having now the benefit of access to an English translation of the Court of Appeal judgment (which incorporates large sections of the first instance judgment; Swedish copy here), here’s some clarification. The first instance judgment seems to have held that Rome II does not apply ratione temporis; that Swedish SC authority had held the ordinarily applicable rule to be locus delicti commissi; that that authority however had not expressly considered the situation where ldc and locus damni differ; and that, ia referring to the Rome II regime, a victim friendly approach should apply which it held in this case to lead to locus damni, being the law of the victim’s domicile which would benefit it mostly, so the ruling suggested, for familiarity reasons. The first instance court then held that lex causae to include statutes of limitation which looked less beneficial (5 years) at first sight however which then profited from a Chilean SC 2010 ruling in the Santa Laura case, in which the SC essentially held that for torts that continue to cause injury, the limitation period has not yet started, regardless of when the actions have become known to the injured parties. No claims therefore were held to be statute-barred. Burden of proof for the causal link was held not to be part of the lex causae, instead being procedural hence subject to Swedish law, lex fori. The Court of Appeal at 9.6, in its summary of the first instance judgment, then reports the first instance judges held that intervening factors, such as post-dumping construction and the use by residents of wet sludge as backfill material, was not reasonably foreseeable by Boliden, hence disrupting liability, and that for the period before that, safe levels of presence of arsenic in injured parties’ blood lay a lot higher than suggested by claimants.

Whether the first instance judges had taken proper account of Chilean case-law on the arsenic toxicity issue was  an important part of the appeal, however the Court of Appeal as reported in my original post, below, held [p.3] that the first instance judges’ finding of a favor victimis rule had no basis in the SC’s authorities and that locus delicti commissi had to be applied [p.5]. In determining ldc, the center of gravity was held to have to be followed, ‘This center may be established with regard to where the qualitatively important elements have their focus rather than according to quantitative criteria’. LDC was therefore held to be Sweden. This is a finding of great interest to the environmental law and human rights litigation. The Court of Appeal, too, held [p.7] that lex causae includes statutes of limitation. This is where the action then derailed. The CA found [p.9] that the limitation period has to be calculated from the latest time when measures to prevent the injury could have been taken. This, it held, fell sometime during 1999 (when, following instruction by the Chilean authorities, the sludge was moved a short distance away from the initial site).

Original post__________________

I reported earlier on the decision at first instance in Arica Victims v Boliden Mineral. The Court of Appeal has now reversed the finding of Chilean law as lex causae, opting instead for Swedish law. Lindahl has good review here and I rely on it quite heavily for I do no speak Swedish.

Boliden Mineral exported toxic waste to Chile in the ’80s, prior to either Basel or EU or OECD restraints (or indeed bans) kicking in. A first issue for consideration was determination of lex causae. Rome II does not apply ratione temporis (it only applies to tortious events occurring after its date of entry into force) – residual Swedish private international law applies. My understanding at first instance was that the applicable law rule referred to lex loci damni, Chile. The Court of Appeal has gone for lex loci delicti commissi: whether this was by use of an exception or whether the court at first instance had simply misunderstood Swedish PIL, I do not know.

Having opted for lex loci delicti commissi, the Court of Appeal then considered where this was. Readers of the blog will know that this is relevant for CSR /business and human /environmental rights discussions. Lindahl’s Linda Hallberg and Tor Pöpke summarise the court’s approach:

In order to determine which country’s law applied to the case, the court examined a sequence of events that had influenced, to varying degrees, what had led to the alleged damage. According to the court, the decisive factor in the choice of law were acts and omissions that could be attributed to the Swedish mining company, as the case concerned this company’s liability for damages.

Instead of determining the principal location of the causative events using quantitative criteria, the court considered it to be where the qualitatively important elements had their centre of gravity. Further, in contrast with the district court’s conclusion, it held that the Swedish mining company’s alleged negligence had its centre in Sweden and therefore Swedish tort law should be applied in this case (the law of the place in which a delict is committed).

Unlike more ‘modern’ CSR cases the fact do not concern mother /daughter company relations yet the considerations of locus delicti commissi are nonetheless interesting.

The Court of first instance had employed Chilean’s longer statute of limitation. The Court of Appeal tried to stretch Sweden’s shorter one of 10 years (the case concerns a potentially tortious act which occurred more than 30 years ago): any subsequent damage that had been caused by the mining company’s failure to act during the period after the toxic waste had been shipped to Chile would advance the starting point for the limitation period. However this was at the latest 1999 and the 2013 action therefore had been taken too late.

On 25 June last the Supreme Court rejected further consideration, the Court of Appeal’s finding therefore stands.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.6.3, Chapter 8.

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Arica Victims v Boliden Mineral. Lex causae and export of toxic waste.

‘Reading’ Arica Victims v Boliden Mineral (I have a copy of the case, but not yet a link to ECLI or other database; however there’s a good uncommented summary of the judgment here] leaves me frustrated simply for my lack of understanding of Swedish. Luckily Matilda Hellstorm at Lindahl has good review here (including a hyperlink to her earlier posting which alerted me to the case in 2017).

Boliden Mineral exported toxic waste to Chile in the ’80s, prior to either Basel or EU or OECD restraints (or indeed bans) kicking in. A first issue for consideration was determination of lex causae. Rome II does not apply ratione temporis (it only applies to tortious events occurring after its date of entry into force) – residual Swedish private international law applies, which determined lex causae as lex loci damni. The Court found this to include statute of limitation. This would have been 10 years under Swedish law, and a more generous (in Matilda’s report undefined) period under Chilean law. Statute of limitation therefore following lex causae – not lex fori.

Despite this being good for claimants, the case nevertheless failed. The Swedish court found against liability (for the reasons listed in Matilda’s report). (With a small exception seemingly relating to negligence in seeing waste being uncovered). Proof of causality seems to have been the biggest factor in not finding liability.

Leave to appeal has been applied for.

Geert.

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

 

 

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Dutch Shell Nigeria / Royal Dutch Shell ruling: anchor jurisdiction confirmed against Nigerian daughter.

Update 3 May 2021 Shell are appealing (only) the duty of care issue with the Supreme Court.

Update 1 February 2021 the Court has now upheld liability for certain aspects of the pollution, citing duty of care under Nigerian common law. Update 3 February 2021 see Lucas’ Roorda’a analysis here and update 4 February 2021 analysis by Meester Channa Samkalden, lead counsel for claimant in the case here.

Update 21 March a mirror case is going ahead in the High Court in London: jurisdiction against the mother company again is easily established because of Shell’s incorporation in the UK (its corporate headquarters are in The Netherlands (which is also where it has its tax residence). The High Court has allowed proceedings against Shell Nigeria to be joined. Shell is expected to argue forum non conveniens at a later stage.

Postscript 1 March 2016 in Xstrata Limited /Glencore Xstrata plc ., similar issues of corporate social responsibility and liability for a subsidiary’s actions are at stake.

As I have reported in December, the Gerechtshof Den Haag confirmed jurisdiction against Shell’s Nigerian daughter company in Eric Barizaa Dooh and Vereniging Milieudefensie v Royal Dutch Shell Plc and Shell Petroleum Development Company of Nigeria Ltd. (Please note the link first has the NL version of the judgment, followed by an EN translation). The proceedings can be joined with the suit against the mother company Royal Dutch Shell (RDS, headquartered in The Netherlands whence easily sued on the basis of Article 4 Brussels I Recast (Article 2 of the Regulation applicable to the proceedings)). I have finally gotten round to properly reading the court’s judgment (which deals with jurisdiction issues only). As I have pointed out, Article 6(1) (now 8(1) of the Brussels I Recast) cannot be used against defendants not domiciled in the EU. Dutch rules on joinders applied therefore. The Gerechtshof however took CJEU precedent into account, on the basis that the preparatory works of the relevant Dutch rules on civil procedure reveal that they were meant to be so applied. Consequently a lot of CJEU precedent is reviewed (the most recent case quoted is CDC). The Gerechtshof eventually holds that lest it were prima facie established that liability of RDS for the actions committed by its Nigerian daughter is clearly unfounded, use of RDS as an anchor can go ahead. Only clearly abusive attempts at joinders can be sanctioned. (A sentiment most recently echoed by the CJEU in Sovag).

The Gerechtshof Den Haag, without being definitive on the issue, also suggested that applicable law for considering whether merger operations inserting a new mother company were abusive (merely carried out to make Royal Dutch Shell escape its liability), had to be addressed using ‘among others’ the lex incorporationis (at 3.2). That is not undisputed. There are other candidates for this assessment.

The judgment being limited to jurisdiction, this case is far from over.

Geert.

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

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Royal Dutch Shell. Watch those stockings. Nigeria / RDS judgment on appeal expected end December.

Postscript 1 March 2016 in Xstrata Limited /Glencore Xstrata plc ., similar issues of corporate social responsibility and liability for a subsidiary’s actions are at stake.

Postscript 18 December: quick update, more to follow: in an interim judgment, jurisdiction was upheld.

I have earlier referred to Shell’s arguments in appeal (in Dutch) on the specific issue of jurisdiction, which may be found here .  Judgment in first instance in fact, as I reported, generally was quite comforting for Shell (and other holding companies in similar situations) on the issue of substantive liability.

However on jurisdiction, the Dutch court’s approach of joinders under residual national jurisdictional rules, was less comforting. The rules on joinders, otherwise known as ‘anchor defendants’, in the Brussels regime (Brussels I as well as the Recast) do not apply to defendants domiciled outside of the EU. Consequently national rules of civil procedure decide whether an action against a daughter company, established outside of the EU, can be successfully anchored to an action against the mother company (against which jurisdiction is easily established per Article 4 of the Recast, Article 2 of the former Regulation). In first instance, the Court at The Hague ruled in favour of joining a non-EU defendant to a case against its mother company in The Netherlands.

In its submission for appeal, Shell (with reference to relevant national case-law) borrows heavily from CJEU case-law on what was Article 6(1) (now Article 8(1)), suggesting that Dutch residual law was meant to apply as a mirror the European regime, with one important difference: precisely the issue that under the Dutch regime, none of the parties need to be domiciled in The Netherlands. Any jurisdictional rule which leads the Dutch courts to accept jurisdiction against one defendant, even if that anchor defendant is not domiciled in the country, can lead to others being drawn into the procedure. This means, so Shell suggests, that the Dutch rule (Article 7(1) of the Dutch code of civil procedure) is more in need of precautions against abuse, than the equivalent European rule.

As part of the efforts to avoid abuse, the Dutch courts need to make a prima facie assessment of the claims against the anchor defendant: for if those claims are spurious, anchoring other claims to such loose ground would be abusive. On this point, the Court of Appeal will have to discuss the corporate veil, piercing it, Chandler v Cape etc. Shell’s submission does not in fact argue why piercing needs to be assessed by the lex causae (here: Nigerian law as the lex loci damni) and not, for instance, by the lex fori. I doubt the Court of appeal will raise it of its own accord. (See here for a consideration of the issues in an unrelated area and further pondering here).

A little bird tells me that appeal judgment will be issued on 18 December. I may or may not be able to review that before the Christmas break. In the negative, it will have to be an Epiphany posting. (Potentially in more than one meaning of the word).

Geert.

 

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No big surprises in Dutch Shell Nigeria / Royal Dutch Shell ruling

Postscript/2015: Shell’s arguments in appeal (in Dutch) on the specfic issue of jurisdiction, may be found here

As reported earlier, Shell’s top holding has been hauled before a Dutch court by a Dutch environmental NGO (Milieudefensie), seeking (with a number of Nigerian farmers) to have the mother holding being held liable for environmental pollution caused in Nigeria. Judgment came yesterday and generally is quite comforting for Shell (and other holding companies in similar situations).

The court stuck to its decision to join the cases, hence allowing Shell Nigeria to be pursued in the Dutch Courts, together with the holding company (against which jurisdiction was easily established under the Brussels I Regulation).  On this point, one imagines, Shell might appeal.

The court held against application of the Rome II Regulation for temporal reasons and did therefore not entertain any (unlikely) options in that Regulation which may  have led to Dutch law: the events which gave rise to the damage occurred before the entry into force of that Regulation. The Court therefore applies lex loci damni. If I am not mistaken, prior to Rome II, The Netherlands applied a more or less complex conflicts rule, not necessarily leading to lex loci damni, neither to lex loci delicti commissi, which was the rule in most EU Member States prior to the entry into force of the Rome II Regulation.

Nigerian law applied and any route to apply Dutch law was rejected.  Incompatibility with Dutch ordre public, for instance, was not withheld. Nigerian law running along common law lines, the court ran through negligence in tort, applied to environmental cases, leading amongst others to the inevitable Rylands v Fletcher. The  court found that the damage occurred because of sabotage, which under Nigerian law in principle exhonerated Shell Nigeria. Only for two specific instances of damage was liability withheld, for Shell Nigeria had failed to take basic precautions.

The conditions of Chandler v Cape (2012) to establish liability for the holding company, were not found to be met in the case at issue. The court did not establish a specific duty of care under Nigerian law (with the loop to the English common law) for Royal Dutch Shell (RDS), the mother company. A general CSR committment was not found not to alter that.

No doubt to be continued in various forms of appeal.

Geert.

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

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

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

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

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

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

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

Geert.

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

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