Vedanta applied in Nigerian oil spill case

There are some interesting points in the recent decision of Stuart-Smith J in Jalla & Ors v Royal Dutch Shell Plc & Ors [2020] EWHC 459 (TCC).

This is a claim relating to an oil spill in 2011 on behalf of a very large number of individuals (in excess of 27,500) who live by or in the hinterland of a stretch of the coast of Nigeria that spans Bayelsa State and Delta State. In addition, the claim is brought on behalf of 457 villages and communities that are alleged to have been affected by the oil spill.

In general terms, the Claimants allege that responsibility for the 2011 spill lies with companies forming part of the Shell group. The Defendants deny liability on the basis, amongst other things, that no oil from the December 2011 spill reached the Claimants’ coastline or caused the damage that the Claimants allege.

Various issues relating to limitation, estoppel by convention, and amendment of statements of case are considered in the judgment. For the purposes of this blog we highlight only the comments on jurisdiction:

  • The court applied Vedanta Resources PLC & Anor v Lungowe & Ors [2019] UKSC 20 in holding that it was no abuse of process or of EU law for the Claimants to pursue an England-domiciled anchor Defendant under art. 4(1) of Brussels I (Recast): [226].
  • It was not possible to determine at a preliminary stage whether the anchor defendant owed a duty of care and, if so, what the scope of that duty may be. An application for reverse summary judgment was therefore refused: [227].
  • The judge refused to stay the English proceedings under art. 34 of Brussels I (Recast) on the basis that proceedings related to the oil spill were already taking place in Nigeria. The indeterminate nature of such a stay, which would be measured in years rather than months, would render the English claims “almost intolerably stale”. A responsive approach including a future stay depending on the progression of the Nigerian proceedings remained a possibility. Furthermore, the precise ambit of the Nigerian proceedings was not clear, and it was not obvious exactly what issues would be determined: [245].
  • It was also significant that, to the extent that there was a considerable overlap between the two proceedings, the overlap was “far from complete”. The fact that a consolidated hearing would not be possible was a compelling reason for refusing a stay in the absence of a strong countervailing factor: [246].
  • England was a proper place to bring the claim against the non-England-domiciled Defendant. The Claimants alleged that both Defendants were responsible for different parts of the loading operation that caused the oil spill. It was clearly expedient for there to be one factual enquiry and feasible to achieve it by having both Defendants before the English court. Although there was a substantial factual and litigation connection with Nigeria, the balance was not all on one side since some or all of the foreign Defendant’s witnesses (both expert and of fact) were likely not to be Nigerian: [250].

As a postscript, a particularly interesting feature of this litigation is that it appears to have been brought as a form of representative action. The judge said:

“No submissions were made on this point, and no one appears to have given thought to the appropriateness of using a representative action when, at least arguably, the Claimants cannot be said to have the same interest: see, for example, the discussion in Lloyd v Google LLC [2019] EWCA Civ 1599 at [73]-[81]. The requirement of a common interest as a necessary prerequisite appears to be in accordance with Nigerian Law as explained by the Defendants’ expert who says that “the essential condition for sustaining a representative action is that the persons who are to be represented have the same interest as the plaintiff in one and the same cause or matter”.”

The judge ordered a further hearing to deal with “the representative nature of the action and whether its structure needs to be adjusted.” For those with an interest in group litigation, this is one to watch.

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