UK Supreme court rules Zambians can sue Vedanta in English courts

On 10 Apr 2019, the Supreme Court has ruled that a case brought by almost 2,000 Zambian villagers against Konkola Copper Mines and its parent company Vedanta Resources PLC can be heard by the English courts.

 

 

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Article
15 May 2019

Maysa Zorob talks Vedanta and Zambian farmers on CNBC Africa

Author: Adam Barnett, Communications Officer, BHRRC

BHRRC's Maysa Zorob, head of Corporate Legal Accountability, discusses the UK Supreme Court ruling on Vedanta vs Zambian farmers.

This episode of CNBC Africa's Capital Connection was broadcast on April 17 2019.

 

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Article
26 April 2019

Implication of UK Supreme Court decision in Vedanta v. Lungowe for supply chain relationships

Author: Opinio Juris (USA)

"Vedanta v. Lungowe Symposium: Potential Implications of the UKSC’s Decision for Supply Chain Relationships", 23 Apr 2019

In this post, I will focus on the implications of one of the central questions that the UK Supreme Court (‘UKSC’) addressed in its much-awaited Vedanta Resources PLC and anor v Lungowe and orsjudgment: whether the claimants’ pleaded a real triable issue against Vedanta. This issue very much boiled down to the question of whether a parent company may owe a duty of care to persons harmed by the actions or omissions of its foreign subsidiary. Relying on the basic tort of negligence principles, the UKSC held that such a duty by a parent company would not be a novel category [para.54]. The court affirmed the point made in earlier case law that there is no separate category of negligence for this type of parent-subsidiary-third party relationship. Rather, what was before the court was simply a matter of ‘whether A owes a duty of care to C in respect of the harmful activities of B’ [para.54]...

In deciding on whether Vedanta may owe a duty of care to the communities harmed as a result of the environmental pollution caused by the mining activities of its Zambian subsidiary, the UKSC focused on whether there was an arguable case that Vedanta sufficiently intervened in the management of the mine owned by its subsidiary [para.44]. For the UKSC, the most compelling indicator of a high level intervention was found in the public disclosures made by Vedanta in its sustainability reports which the Court considered an assumption of responsibility...

According to the UKSC, even if the parent company has not implemented in practice what it has disclosed in its public disclosures, it may still be considered to have assumed a duty of care [para.53]...

Implications for supply chain relationships

Several features of the UKSC’s analysis of the ‘real triable issue’ question shows that this judgment can have implications beyond parent-subsidiary relationships.

First, the UKSC emphasized (agreeing with Sales LJ in AAA and ors v Unilever PLC and anor) that the parent-subsidiary relationship did not give rise to a distinct category of negligence. It is not the parent’s ‘ownership’ of shares in a subsidiary that determines the level of supervision/control exercised for purposes of the duty of care assessment...

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Article
20 April 2019

Vedanta: Supreme Court rules that Zambians can seek legal redress in the UK against parent company

Author: Allen & Overy

The UK Supreme Court has decided that a claim for negligence and breach of statutory duty against a Zambian mining company and its English parent can be heard by the English courts. The much anticipated decision has important ramifications for British multinationals whose subsidiaries and suppliers operate abroad, particularly in those regions where there is a higher risk of adverse environmental and human rights impacts and claimants face practical barriers to accessing effective judicial remedies. It also is an important decision for potential claimants motivated to seek access to judicial remedies against multinational corporations in their home jurisdictions. Here we discuss the most salient points from the decision and what it means for the environmental and human rights policies and practices of UK-domiciled multinational companies, and the litigation strategies of potential claimants.

Background

The claimants in this case are 1,826 villagers from the Chingola District of Zambia, home to a copper mine operated by Zambian company Konkola Copper Mines plc (KCM). In 2015, these villagers lodged a claim in the English courts against KCM and its English parent company, Vedanta Resources PLC (Vedanta), alleging that their health and farming activities had been damaged by toxic water pollution caused by the mine. KCM and Vedanta challenged the jurisdiction of the English courts to hear this claim...

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Article
19 April 2019

Not quite ‘beating your head against a brick wall’: the Supreme Court’s decision in Vedanta v. Lungowe

Author: Nadia Bernaz, Rights as usual

On 10 April 2019, the Supreme Court of the United Kingdom delivered its highly-anticipated decision in the case of Vedanta v. Lungowe (Lungowe v. Vedanta in the lower courts). The Supreme Court unanimously decided the case should proceed in English courts, dismissing the appellants’ arguments against English courts assuming jurisdiction. This marks an important next step in an ongoing series of cases, wherein foreign victims of human rights and environmental harms sue corporations and their foreign subsidiaries in the domestic courts of the companies’ European home States. Next to Lungowe, the series includes Okpabi v. Shell that I discussed previously on this blogAAA v. Unilever and Akpan v. Shell, discussed here.

This post examines how the Supreme Court has provided some important clarifications on both the substantive and jurisdictional rules that govern these cases, thus making it somewhat easier for claimants to argue duties of care on parent companies. It also shows the Court’s emphasis on access to justice compared to the lower courts may be laudable in the abstract, but is unlikely to increase access to justice in practice…

Nadia Bernaz, Associate Professor of Law and Governance at Wageningen University in the Netherlands, analyses the UK Supreme Court's landmark decision., 18 April 2019

…The Supreme Court’s decision delivered by Lord Briggs focused primarily on the jurisdiction issue and the appropriateness of England as a forum…

…The main issue here was whether England was the ‘proper place to bring the claim’, as per the third part of the necessary and proper party test (para. 66). This requires Courts to balance the factors that connect the case with England – i.e., the case against the parent company over which English courts have mandatory jurisdiction – against the factors that connect the case to Zambia – i.e., the domicile of the claimants, the defendants and the locality of the harmful acts…

 

…This meant that in principle, England was not the proper place to try the case against KCM.

[One] point, however, is of substantive law: duty of care litigation based on Chandler is still very much alive in English courts. In para. 53 the Court even appears to extend the situations where a parent company may be under a duty of care. Whereas under Chandler claimants need to demonstrate that parent companies actually exercised control over their subsidiaries, Lord Briggs mentions that duties of care can also exist when parent companies claim they have control, but do not exercise it in practice…

From an academic perspective, more emphasis on access to justice as a relevant issue in these cases is positive... 

It remains to be seen how Lungowe will proceed from now. From the perspective of an academic observer, it would be good to finally see another case litigated on the merits. The case may also get settled before it moves on to the merits. Even if that happens, the Supreme Court decision in Lungowe will remain important for future foreign direct liability cases.

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Article
12 April 2019

Zambian farmers can take Vedanta to court over water pollution. What are the legal implications?

Author: Gabrielle Holly, Omnia Strategy LLP

Gabrielle Holly at Omnia Strategy LLP analyses the UK Supreme Court's landmark decision.

This morning, the Supreme Court delivered its much anticipated judgment in Vedanta Resources PLC and anor v Lungowe v and ors. In a unanimous decision, the court found that a claim brought by a group of Zambian villagers against UK-based Vedanta Resources Plc and its Zambian subsidiary, Konkola Copper Mines (KCM), could proceed in the UK.

The duty of care

The claimants in Vedanta and other similar cases (Okpabi and ors v Royal Dutch Shell plc and anor and AAA and ors v Unilever and anor) have all relied on the case of Chandler v Cape Plc to argue that a UK parent company could owe a duty of care to those affected by acts of a foreign subsidiary.

Chandler set out a series of factors which established that the parent company in that case owed a duty of care to the employees of its subsidiary. However, though tried and tested, these factors have not been an easy fit for subsequent claims.

In a significant step, the Supreme Court in Vedanta confirmed that the Chandler factors are not the only path available to prospective claimants. It found that the relevant duty in parent company cases can be established by reference to basic tort principles rather than the “straitjacket derived from the Chandler case” (at [60])...

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Article
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Author: La Fiva

« Les Zambiens peuvent engager une action en justice pour pollution dans les mines devant les tribunaux anglais », 10 avril 2019 

Deux mille villageois zambiens qui affirment que leur vie a été détruite par un ruissellement toxique provenant de la deuxième plus grande mine à ciel ouvert au monde ont obtenu le droit de faire une réclamation devant les tribunaux anglais.

Dans un arrêt historique, la Cour suprême a jugé que le conglomérat minier Vedanta Resources, basé à Londres, et sa filiale zambienne Konkola Copper Mines (KCM) pouvaient être tenus pour responsables par les juges anglais, malgré les arguments des sociétés selon lesquels ils devaient se défendre eux-mêmes en Zambie.

La décision ouvre la porte à toute une série d'autres actions en justice à l'encontre de sociétés mères basées au Royaume-Uni pour les actions de leurs filiales à l'étranger…

Les demandeurs d'asile ont d'abord comparu devant un tribunal de Londres en 2015, alléguant leur négligence et leur violation de l'obligation légale de rejet d'effluents, mais avant de pouvoir procéder, Vedanta a contesté la compétence des tribunaux anglais…

Un élément clé de l'affaire concernait les affirmations dans la littérature d'entreprise publiée par Vedanta – une entreprise d'une valeur de 10 milliards £ – selon lesquelles elle assumerait la responsabilité des normes environnementales et de durabilité dans l'ensemble du groupe. Il avait accepté de se poursuivre devant les tribunaux zambiens aux côtés de KCM, mais les juges de la Cour suprême ont souscrit à l'argument des requérants selon lequel ils risquaient de ne pas avoir accès à la justice en Zambie…

La plainte contre Vedanta et KCM peut maintenant être traitée devant la haute cour.

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Article
10 April 2019

UK: Supreme Court rules Zambian villagers' case against Vedanta to be heard in English courts

Author: Leigh Day

The claimants allege that as a result of the toxic effluent discharge from the Nchanga Copper Mine which is run by KCM they have suffered loss of livelihoods through damage to the land and waterways and health problems through having to consume and use polluted water. Now that jurisdiction has been determined their claims will be heard in the High Court at a date to be determined. As part of the judgment today the Supreme Court also ruled that companies can be held to account for the commitments they make publicly regarding their subsidiaries and their commitments to the communities they serve...

The claimants, represented by law firm Leigh Day, have been fighting for four years to have their case heard in the English courts. They argued that they would not be able to achieve justice in the Zambian courts due to the lack of funding available for claimants in such claims and the lack of legal representatives with the necessary qualifications and experience to properly bring the case. The Supreme Court agreed with these arguments. The court also determined that there is a triable issue between the claimants and Vedanta, as well as KCM, and that Vedanta arguably owes a duty of care to the claimants as the parent company of KCM. 

Oliver Holland, solicitor at law firm Leigh Day representing the Zambians, said:

“After four years fighting for this case to be heard by the English courts we are delighted that our clients’ case can now go ahead in the UK where there is a real opportunity for justice. “Our clients argued that as the UK-based parent company of KCM, Vedanta also had a duty of care towards them and should be held responsible for the damage they allege has been caused by the mine. Indeed in Vedanta’s own published materials the company claims to have control over the mine and to have responsibility for the proper standards of environmental control across its subsidiaries. The court has ruled today that Vedanta cannot merely pay lip service to these statements and must be held accountable for them.”

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Article
10 April 2019

UK: Supreme Court rules Zambians can sue miner Vedanta

Author: Jane Croft, Financial Times (UK)

Thousands of Zambian villagers can bring a legal challenge in the English courts against mining company Vedanta over alleged pollution in Zambia, the UK’s highest court ruled on Wednesday. The Supreme Court said that the lawsuit brought by 1,800 Zambian villagers can be heard in London despite arguments by Vedanta that the case should be tried by the Zambian courts. It ruled that the lawsuit could proceed in England because the claimants, who are all living in poverty, would struggle to access justice in Zambia and the country does not permit “no win no fee” arrangements for claimants to pay legal fees...

The ruling is significant because it paves the way for more environmental claims to be brought in London against large multi nationals with global operations — particularly from claimants living in poorer countries where there is a difficulty in accessing legal funding. The ruling also indicates that companies have a duty of care to third parties for the commitments they make publicly regarding their subsidiaries...

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Article
10 April 2019

Vedanta Resources and subsidiary to face justice in the UK over human rights harms in Zambia

Author: CORE Coalition & Internatinal Commission of Jurists (ICJ)

Today, the ICJ and the CORE Coalition welcomed the decision of the United Kingdom Supreme Court to allow a complaint to proceed against Vedanta Resources Plc and its Zambian subsidiary Konkola Copper Mines (KCM), alleging serious harm from extraction activities in Zambia.

The damage to health and livelihood was allegedly caused to local communities living in the Chingola District by the discharge of toxic waste from the Nchanga Mine operated by KCM.

The companies challenged the jurisdiction of the UK courts to hear the complaint for negligence and breach of statutory duty, saying there was no case against them arguable in a UK court and, in relation to KCM, that Zambia was the proper forum where any case would have to be heard.

The judgment, confirming the decision of lower courts, dismissed the appeal by the companies, allowing the case to now proceed to trial on the merits. The ICJ and CORE Coalition acted as interveners in the case...

“The ruling makes clear that, from available evidence at this stage, it is arguable in trial that a parent company like Vendanta owes a duty of care in relation to people living in the vicinity of their subsidiaries and this decision will have important implications to similar cases concerning parent company duties around the world,” said Lopez [of the ICJ].

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Article
10 April 2019

Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents)

Author: UK Supreme Court

[Full text of the judgment allowing the case to be heard in English courts]

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