Rob Weir QC in Supreme Court win on jurisdiction and parent company liability

In Vedanta Resources plc v Lungowe [2019] UKSC 20, the Supreme Court addressed a number of key issues on jurisdiction and the liability of a parent company in negligence.  

More than 1800 Zambian nationals started a claim in the High Court on the basis that they had suffered injury and damage to their farming activities as a result of toxic emissions from a mine in Zambia.    The claim was brought against the operator of the mine, KCM, a Zambian company, and also against KCM’s ultimate parent company, Vedanta plc, domiciled in England.    They brought claims in tort and under Zambian statute.  It was common ground that Zambian law was, for the purposes of the negligence claim, identical to English law. 

Both defendants challenged jurisdiction.   At heart, they made two real complaints: (a) Vedanta, the parent company, could not possibly owe a duty of care to those living near its subsidiary’s operation simply on the basis that it provided group-wide policies and guidelines; if right, there was no “real issue” to be tried and the jurisdictional basis of both claims fell away; (b) the rules on jurisdiction operated unfairly where a claimant anywhere in the world could sue an English defendant as of right under art.4 of the Brussels Recast Regulation so as to use that defendant as an anchor defendant to join a foreign defendant; given there would be the risk of irreconcilable judgments if the foreign defendant was not joined, in this way the claimants could fix both defendants with English jurisdiction even though the claim was much more strongly connected with the foreign jurisdiction.

Lord Briggs, giving the only judgment, held that:

  1. Where a parent company intervenes sufficiently in the management of its subsidiary’s operation or the land owned by the subsidiary, it can owe a duty of care to local inhabitants: this is not a novel duty of care but simply an application of the principles established in  Dorset Yacht v Home Office [1970] AC 1004.   Chandler v Cape plc [2012] 1 WLR 3111 provides helpful guidance.   In this case, Vedanta published material asserting that it was responsible for the maintenance of proper standards of environmental control over the operations of its subsidiaries, including the operation of the mine.  That was sufficient on its own to establish an arguable case against Vedanta.
  2. A foreign claimant did have the right to sue Vedanta in England and this was not an abuse of EU law.   However, given Vedanta had agreed to submit to Zambian jurisdiction, the risk of irreconcilable judgments arose as a result of the claimants’ choice and so England was not the proper place for hearing of the case.   That said, here there was a risk of substantial injustice if the claim proceeded in Zambia so that the claim was permitted to proceed in England.

By this route, the appeals of Vedanta and KCM were dismissed.

Rob Weir QC appeared with Richard Hermer QC and Eddie Craven of Matrix Chambers and Marie-Louise Kinsler QC of 2TG for the respondents, instructed by Martyn Day of Leigh Day.

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