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Commentary: UK Supreme Court reaffirms parent companies may owe a duty of care towards communities impacted by their subsidiaries in third countries

"UK Okpabi et al v Shell: UK Supreme Court Reaffirms Parent Companies May Owe a Duty of Care Towards Communities Impacted by their Subsidiaries in Third Countries", 16 February 2021

The much-awaited judgment by the UK Supreme Court (SC) in Okpabi and others v Royal Dutch Shell Plc and another (Okpabi) was handed down in an online hearing on Friday 12 February 2021 some five years after the original complaint against Shell was filed in UK courts in 2016.

The case relates to claims by HRH Emere Godwin Bebe Okpabi, and more than 42,000 individuals from the communities of Ogale and Bille in the Niger Delta, alleging that oil spills from the respondents’ pipelines caused severe environmental damage, affecting their land, livelihoods, water sources and health. They sued Royal Dutch Shell plc (Shell), UK-based parent company, and its Nigerian subsidiary SPDC, which operates the joint venture between Shell and the state-owned oil company. But the responsibility of Shell, and the jurisdiction of UK courts over the case, was contested by their legal counsel. Both the High Court and the Court of Appeal (CoA) sided with Shell, but the Supreme Court has now reversed course.

... The SC decision in favour of the claimants strongly affirmed the court’s own jurisprudence in Lungowe v Vedanta Resources (Vedanta), but developed it in some respects (one of the authors analysed Vedanta, in previous blogs and symposium).

... The judgment is also significant in terms of access to justice and reparation, which are key components of the international human rights legal framework. As Sophie Kemp has pointed out, the SC holdings on procedure go some way in facilitating access to justice for claimants such as the Nigerian communities “by clarifying and to some extent lowering the hurdles that claimants must meet”. In so doing, the judgment has not only reaffirmed its previous landmark decision in Vedanta, but also clarified the application of the jurisdictional test in such a way as to expedite claimants’ access to a proper fair trial...

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