The Supreme Court dismissed an appeal about whether the English courts had jurisdiction over claims by some 1,826 Zambian villagers for damage allegedly caused by toxic emissions from the Nchanga Copper Mine. Although the connecting factors otherwise pointed overwhelmingly to Zambia, the Court upheld the finding that there was a real risk the claimants would not obtain substantial justice there.
Members of farming communities in Zambia alleged that discharges from a copper mine had polluted water used for drinking and irrigation. They sued the mine operator, Konkola Copper Mines (KCM), and its UK-domiciled parent, Vedanta. Both companies disputed the English court’s jurisdiction.
Law Teacher writing support
Writing a law essay?
We choose a writer who is an expert in your area of law and qualified to at least the academic level you select. Most of our writers hold a master’s degree or PhD, have teaching experience, or both.
Send us your question and, if you wish, any marking criteria. We’ll write an essay to your instructions.
The claims against both companies are in common law negligence and breach of statutory duty. Against KCM they rest on its operation of the mine. Against Vedanta they rest on an alleged very high level of control and direction over KCM’s operations and its compliance with health, safety and environmental standards. The appeal concerned only jurisdiction. Vedanta was sued in England under article 4 of the Recast Brussels Regulation. KCM was served out of the jurisdiction as a necessary or proper party. Coulson J and the Court of Appeal rejected both defendants’ jurisdiction challenges. Lord Briggs, with whom Lady Hale, Lord Wilson, Lord Hodge and Lady Black agreed, dismissed the further appeal.
Abuse of EU law
The defendants said that suing Vedanta under article 4 was an abuse of EU law, used only to bring KCM within the English jurisdiction. Lord Briggs held that any abuse exception to article 4 must be narrowly construed. Following Owusu v Jackson, article 4 prevents a forum non conveniens stay against an EU-domiciled defendant. Coulson J found, and the Court of Appeal agreed, that the claimants genuinely wanted judgment against Vedanta, including because of a perception, supported by some evidence, that KCM might be unable to pay. Attracting jurisdiction over KCM was an important reason, but not the sole purpose. There was therefore no abuse, the point was acte clair, and no reference to the Court of Justice was needed.
A real issue against Vedanta
Service on KCM required a real issue to be tried against Vedanta, assessed by the summary judgment test. The claimants said Vedanta’s intervention in the mine, with knowledge of the risk of toxic escapes, gave rise to a duty of care and to fault-based liability under Zambian environmental, mining and public health legislation, even though KCM was the licensed operator.
Lord Briggs rejected the argument that this was a novel category of negligence requiring especially cautious analysis. There is no special parent-company doctrine. Parent and subsidiary are separate persons. Share ownership creates an opportunity to intervene in the subsidiary’s operations but does not itself impose a duty to do so. Liability depends on ordinary principles and on the extent to which, and the way in which, the parent took over, intervened in, controlled, supervised or advised on the relevant operations. Group-wide policies may be enough if they contain systemic errors that cause harm when implemented, if the parent actively trains, supervises and enforces them, or if it publicly undertakes that degree of supervision and then fails to provide it.
The claimants relied on Vedanta’s published materials, including a report entitled Embedding Sustainability, a management services agreement, and evidence from a KCM manager about changes after KCM joined the group. Coulson J held that the claim was arguable and that internal documents, not yet disclosed, were likely to be important. The Court of Appeal agreed. Lord Briggs held that there was material on which the judge could properly reach that conclusion, particularly Vedanta’s public assertions that it both set and implemented environmental standards. The same inquiry supported an arguable statutory claim. The finding of a real triable issue could not be overturned.
The proper place
The court had also to be satisfied that England and Wales was the proper place in which to bring the claim: the forum in which the case could suitably be tried for the interests of the parties and the ends of justice. Leaving aside access to justice, the connecting factors pointed overwhelmingly to Zambia. The alleged wrongs, the escapes, the harm, the mining licence, the applicable law, the claimants, most witnesses and much of the documentation were there. A Zambian judgment would be enforceable in England. Vedanta had offered to submit to the Zambian courts, so both defendants could be sued there.
Coulson J had nevertheless treated the risk of irreconcilable judgments as decisive, because the claimants were likely to continue against Vedanta in England. Lord Briggs held that this was wrong in principle. Article 4 confers a right to sue an EU domiciliary at home, but it does not entitle claimants to avoid a risk of irreconcilable judgments that they can themselves avoid by suing both defendants in an available foreign court to which both will submit. That risk remains relevant, but it is not a trump card. Balancing the factors afresh, and assuming for this purpose that substantial justice was available in Zambia, England was not the proper place.
Substantial justice
Service out may nevertheless be permitted if cogent evidence shows a real risk that substantial justice will not be obtainable in the foreign forum. Coulson J found not merely a real risk but a probability that the claimants would not obtain access to justice in Zambia. He did not doubt the independence or competence of the Zambian judiciary, or the availability of a fair procedure for large group claims. The obstacle was practical. The claimants were at the poorer end of the poverty scale in one of the world’s poorest countries and could not fund the litigation. Legal aid was unavailable and conditional fee agreements are unlawful in Zambia. Lawyers who might act for a modest deposit, recovering costs only if successful, would lack the numbers and experience needed for litigation of this scale and complexity against an obdurate opponent.
Evidence of other Zambian environmental group claims supported that conclusion. In Nyasulu v Konkola Copper Mines plc, medical evidence was deployed for only 12 of some 2,000 claimants; the Supreme Court of Zambia upheld liability for those 12 but dismissed the remaining claims for want of evidence of loss. There was evidence that the missing reports could not be funded. Lord Briggs held that the judge had not treated the absence of English-style funding as automatically conclusive, had not judged Zambia merely by comparison with England, and had paid proper regard to comity and the need for cogent evidence. The findings were open on the evidence, so the appeal failed on this issue.
Verdict: The Court unanimously dismissed the companies’ appeal. Zambia was the proper place to try the claims, but the real risk that the claimants could not obtain substantial justice there justified service on KCM. The claims could proceed in England. Neither company’s liability was decided.
Source: Vedanta Resources PLC and another v Lungowe and others [2019] UKSC 20
