Posts Tagged Shell
Nigeria v Shell et al at the High Court. Yet more lis alibi pendens and cutting some corners on case-management.
One does not often see Nigeria sue Shell. Federal Republic of Nigeria v Royal Dutch Shell Plc & Anor  EWHC 1315 (Comm) engages Article 29 Brussels Ia’s lis alibi pendens rule in a period in which (see other posts on the blog) the High Court intensely entertained that section of Brussels Ia. Royal Dutch Shell Plc (RDS) is the anchor defendant for the other EU-domiciled defendants. Quite a few of the defendants are not domiciled in the EU.
The case concerns Nigerian allegations that monies paid by it under an earlier settlement following alleged expropriation, which had led to bilateral investment treaty arbitration under ICSID rules, had been channeled to pay bribes. Nigeria is pursuing the case in the criminal courts in Italy, too.
Nigeria therefore are already pursuing claims in Italy to obtain financial relief against 4 of the defendants including the anchor defendant. Defendants contend that those claims are the same claims as the English ones and that the court should decline jurisdiction in respect of those claims pursuant to A29 BIa. Defendants then further contend that, if the court so declines jurisdiction over the claims against RDS and Eni SpA, the entire proceedings should be dismissed. This is because RDS is the ‘anchor defendant’ under A8(1) BIa in the case of three of the EU-domiciled defendants and under English CPR rules against the other defendants. In the alternative to the application under Article 29, Defendants seek a stay of the proceedings under A30 BIa (related cases) or, in the further alternative as a matter of case management, pending a final determination, including all appeals, of the claim that the FRN has brought in Italy.
Butcher J refers at 41 to the UKSC in The Alexandros, and to Rix J in Glencore International AG v Shell International Trading and Shipping Co Ltd, at 110: ‘broadly speaking, the triple requirement of same parties, same cause and same objet entails that it is only in relatively straightforward situations that art  bites, and, it may be said, is intended to bite. After all, art  is available, with its more flexible discretionary power to stay, in the case of ‘related proceedings’ which need not involve the triple requirement of art . There is no need, therefore, as it seems to me, to strain to fit a case into art .’
Same parties. Per CJEU The Tatry A29 applies to the extent to which the parties before the courts second seised are parties to the action previously commenced. Butcher J correctly holds that the fact that there may be other parties to the second action does not prevent this. Nigeria nevertheless argue that the involvement of the Italian Public Prosecutor in the Italian case, and not in the English case, and its crucial role in the Italian proceedings, means that the proceedings nevertheless are not between the ‘same parties’. Defendants call upon CJEU C-523/14 Aertssen to counter this: there BE and NL proceedings were considered to be caught by A29 even though the BE proceedings concerned criminal proceedings and the Dutch did not.
At 47 Butcher J holds that the prosecutor is not a ‘party’ in the A29 sense and that even it were, it is nevertheless clear from The Tatry that there does not have to be complete identity of the parties to the two proceedings for Article 29 to be applicable. (Ditto Leech J in Awendale v Pixis).
Same cause of action. Nigeria accept that there is no material difference in the facts at issue in the two proceedings, however contends that the legal basis of its claim in England is different.
Butcher J refers to Lord Clarke in The Alexandros, that in order to consider same cause of action, one must look ‘at the basic facts (whether in dispute or not) and the basic claimed rights and obligations of the parties to see if there is coincidence between them in the actions in different countries, making due allowance for the specific form that proceedings may take in one national court with different classifications of rights and obligations from those in a different national court’. Doing that, at 55 he holds that these basic claimed rights in the IT and EN proceedings, which he characterises as being the right not to be adversely affected by conduct of RDS which involves or facilitates the bribery and corruption of the FRN’s ministers and agents, and the right to redress if there is such bribery and corruption’, are the same.
That seems to me an approach which is overly reliant on the similarity of underlying facts. (At 70, obiter, Butcher J splits the claims and suggests he would have held on a narrower similarity of cause of action for some claims and not the others, had he held otherwise on ‘same cause of action’; and at 80 that he would have ordered a stay under Article 30 or on case management grounds on the remainder of the action).
Same object. Nigeria contend that its present proceedings do not have the same objet as the civil claim in the Italian proceedings. It contends that the only claim made in the Italian proceedings is for monetary damages, while in the English action claims are also made of a declaration of entitlement to rescind the April 2011 Agreements, other declaratory relief, an account of profits and tracing remedies.
Butcher J disagrees. Per Lord Clarke in The Alexandros, he holds that to have the same object, the proceedings must have the ‘same end in view’, per CJEU Aertssen at 45 interpreted ‘broadly’. At 61; ‘that ‘end in view’ is to obtain redress for RDS’s alleged responsibility for bribery and corruption…. Further, it is apparent that a key part of the redress claimed in the English proceedings is monetary compensation, which is the (only) relief claimed in the Italian proceedings. On that basis I consider that the two sets of proceedings do have the same objet.’
That the English action also seeks to rescind the original 2011 agreements is immaterial, he finds, for RDS were not even part to those proceedings. Moreover, that aim included in the English action serves to support the argument that if the two sets of proceedings go ahead, (at 64) ‘there would be the possibility of the type of inconsistent decisions which Article 29 is aimed at avoiding’. ‘If the English proceedings were regarded as involving a significantly different claim, namely one relating to rescission, and could go ahead, that would give rise to the possibility of a judgment in one awarding damages on the basis of the validity of the April 2011 Agreements and the other finding that those Agreements were capable of rescission. That would appear to me to be a situation of where there is effectively a ‘mirror image’ of the case in one jurisdiction in the other,..’
At 66 ff Butcher J adopts the to my mind correct view on the application of A29 to proceedings with more than one ‘objet’: one does not look at all claims holistically, one has to adopt a claim by claim approach, in line with CJEU The Tatry. At 68: ‘Difficulties which might otherwise arise from the fragmentation of proceedings can usually be addressed by reference to Article 30..’
At 71 he then concludes that the stay must be granted, and that he has no discretion not to do so once he finds that the conditions of A29 are fulfilled. He also holds that with the case against the anchor defendant stayed, A8(1) falls away. He appreciates at 72 that this may expose Nigeria to limitation issues in the Italian proceedings, however those are of their own making for they were under no obligation to sue in Italy.
At 74 ff Article 30 is considered obiter, and Butcher J says he would have stayed under A29. At 77 he notes the continuing debate on the difference at the Court of Appeal between Privatbank and Euroeco. At 75(2) he summarises the distinction rather helpfully as
‘In the Kolomoisky case, it was decided that the word ‘expedient’ in the phrase ‘it is expedient to hear and determine them together’ which appears in Article 28.3 of the Lugano Convention (as it does in Article 30.3 of the Regulation), is more akin to ‘desirable’ that the actions ‘should’ be heard together, than to ‘practicable or possible’ that the actions ‘can’ be heard together: paras. -. In the Euroeco Fuels case, having referred to the Kolomoisky case, the Court of Appeal nevertheless appears to have proceeded on the basis that the court had no discretion to order a stay under Article 30 when there was no real possibility of the two claims being heard together in the same foreign court’
At 75(5) he then without much ado posits that
‘In any event, even if not under Article 30, there should be a stay under the Court’s case management powers, and in particular pursuant to s. 49(3) Senior Courts Act 1981 and CPR 3.1(2)(f). Such a stay would not, in my judgment, be inconsistent with the Regulation, and is required to further the Overriding Objective in the sense of saving expense, ensuring that cases are dealt with expeditiously and fairly, and allotting to any particular case an appropriate share of the Court’s resources. Given that the Italian proceedings are well advanced, and that after the determination of the Italian proceedings English proceedings may well either be unnecessary or curtailed in scope, there appear good grounds to consider that a stay of the English proceedings will result in savings in costs and time, including judicial time.’
Whether such case-management stay under CPR 3.1(2)(f) is at all compatible with the Regulation in claims involving EU domicileds, outside the context of Articles 29-34 is of course contested and, following Owusu, in my view improbable.
Most important lis alibi pendens considerations at the High Court these days.
(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 18.104.22.168.
This item has been in the queue a long time – apologies. Thank you Marco Vogels for reporting end of 2019 on the Rotterdam court’s approach re privilege in ECLI:NL:RBROT:2019:7856, a criminal prosecution involving Shell. Marco’s report is most complete and I am happy to refer.
Compare the Dutch approach to my earlier reports on the issue in England and in the US. The Rotterdam court takes the law of the place of establishment of the (self-employed) solicitors as the connecting factor, ditto for in-house lawyers (on which The Netherlands takes an unusual (bu continental European standards) position of professional privilege). However the court also held that privilege falls away for the whole in-house legal department and all its lawyers, foreign established or not, if the head of legal is member of the Executive Committee.
Agbara et al v Shell. Recognition /enforcement, ordre public and natural justice. Shell Nigeria ruling refused registration in the High Court.
 EWHC 3340 (QB) Agbara et al v Shell Nigeria et al (thank you Adeole Yusuf for flagging) illustrates what many a conflict teacher initiates classes with. There is some, but often limited use in obtaining a judgment which subsequently cannot be enforced where the defendant’s funds are. Coppel DJ refused to enter registration of a 2010 Nigerian judgment by which claimants were awarded 15,407,777,246 Naira (approximately £33 million today) in damages in respect of the pollution of land occupied by them following the rupture of a pipeline maintained by Shell in 1969 or 1970.
Brussels Ia does not apply to recognition and enforcement of an ex-EU judgment hence the common law was applied (clearly with due deference to international comity yet the standards of natural justice nevertheless being determined by lex fori, English law). Natural justice was found to have been infringed by the proceedings at issue. This included an impossibility for Shell to cross-examine witnesses and an unusually swift completion of proceedings following the dismissal of a procedural argument made by Shell. Shell’s subsequent bumbling of the appeal via procedural mistake was not found by Coppel DJ to alter the findings of infringement of natural justice.
Obiter the factual mistakes made in the calculation of damages leading to the award and the opaque inclusion of punitive damages were also found to stand in the way of recognition and enforcement.
The ruling has some relevance for Article 33/34 BI1’s Anerkennungsprognose.
Tronex. Determining ‘waste’ in reverse logistics chains. CJEU supports holders’ duty of inspection, rules out consumer return under product guarantee as ‘discarding’.
I reviewed Kokott AG’s Opinion in C-624/17 OM v Tronex here. The Court yesterday essentially confirmed her Opinion – readers may want to have a quick read of my previous posting to get an idea of the issues.
The Court distinguishes between two main categories. First, redundant articles in the product range of the retailer, wholesaler or importer that were still in their unopened original packaging. The Court at 32: ‘it may be considered that those are new products that were presumably in working condition. Such electrical equipment can be considered to be market products amenable to normal trade and which, in principle, do not represent a burden for their holder.’ However (at 33) that does not mean that these can never be considered to be ‘discarded’: the final test of same needs to be done by the national court.
The second category are electrical appliances returned under the product guarantee. At 43: goods that have undergone a return transaction carried out in accordance with a contractual term and in return for the reimbursement of the purchase price cannot be regarded as having been discarded. Where a consumer effects such a return of non-compliant goods with a view to obtaining a reimbursement of them under the guarantee associated with the sale contract of those goods, that consumer cannot be regarded as having wished to carry out a disposal or recovery operation of goods he had been intending to ‘discard’ within the meaning of the Waste Framework Directive. Moreover per C-241/12 and C-242/12 Shell, the risk that the consumer will discard those goods in a way likely to harm the environment is low.
However such a return operation under the product guarantee does not provide certainty that the electrical appliances concerned will be reused. At 35: ‘It will therefore be necessary to verify, for the purposes of determining the risk of the holder discarding them in a way likely to harm the environment, whether the electrical appliances returned under the product guarantee, where they show defects, can still be sold without being repaired to be used for their original purpose and whether it is certain that they will be reused.’
At 36: if there is no certainty that the holder will actually have it repaired, it has to be considered a waste. At 40 ff: In order to prove that malfunctioning appliances do not constitute waste, it is therefore for the holder of the products in question to demonstrate not only that they can be reused, but that their reuse is certain, and to ensure that the prior inspections or repairs necessary to that end have been done.
The Court ends at 42 with the clear imposition of a triple duty on the holder (who is not a consumer, per above): a duty of inspection, and, where applicable, a duty of repair and of packaging.
(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.
Tronex. Circular economy, reverse logistics qualifying as wastes return to the CJEU. Kokott AG suggests a duty of prompt inspection.
Kokott AG Opined in C-624/17 OM v Tronex end of February (I had flagged the case summarily earlier): whether consumer returns of electrical appliances some of which are no longer usable because defective, and residual stock are to be regarded as waste that may be exported only in accordance with the Waste Shipment Regulation. – Reminiscent of the issues in Shell: in that case in a B2B context.
Tronex’ export consignment that was stopped, consisted of appliances which had been returned by consumers under a product guarantee, on the one hand, and goods which, because of a change to the product range, for example, were or could no longer be sold (normally), on the other. A number of the boxes in which the appliances were packaged carried a notice stating their defects. The glass in some of the glass kettles was damaged. The shipment was to take place without notification or consent in accordance with the Waste Shipment Regulation.
The AG takes a sensible approach which distinguishes between consumer and collector. At 31 ff: The mere fact that objects have been collected for the purpose of reuse does not in itself necessarily support the assumption that they have been discarded. Indeed, it seems sensible, both economically and from the point of view of the efficient use of resources, to make appliances which can no longer be sold on the market for which they were originally intended available on other markets where they may still sell. Particularly in the case of residual stock which is still in its unopened original packaging, therefore, the request for a preliminary reference contains insufficient evidence to support the conclusion that there has been any discarding.
Returned appliances which, on account of serious defects, are no longer usable and can no longer be repaired at reasonable cost, on the other hand, must unquestionably be regarded as waste. Kokott AG suggests waste classification as the default position. At 39: in so far as there are doubts as to the reuse of the goods or substance in question being not a mere possibility but a certainty, without the necessity of using any of the waste recovery processes referred to in the Waste Directive prior to reuse, only the possibility of ‘prompt’ dispelling of the doubt by an inspection of the appliances, can shift the presumption of it being waste.
‘Repair’ is what the AG proposes as the distinctive criterion: at 40: if the inspection shows that the item is still capable of functional use, its status as waste is precluded. The same is true of goods with minor defects which limit functionality only negligibly, meaning that these goods can still be sold without repair, in some cases at a reduced price. At 41: ‘In so far as the inspection identifies defects which need to be repaired before the product is capable of functional use, however, that product constitutes waste, since there is no certainty that the retailer will actually carry out the repair. Whether the repair is less or more expensive cannot be decisive in this regard, since a product that does not work constitutes a burden and its intended use is in doubt.’ The same goes for goods (other than those in the original packaging, per above) which have not been inspected at all.
At 45 ff the AG supports this conclusion with reference to instruction in Annexes to the WEEE Directive. She also suggests that her interpretation, given the criminal law implications, be limited to those instances occurring after the eventual CJEU judgment.
(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.