London (AFP) – The Supreme Court of Great Britain has granted more than 40,000 residents of the Nigerian Delta the right to file compensation claims in England against Shell, the oil company, for pollution. On Friday, the High Court in London overturned a 2017 Court of Appeals ruling that class actions against the Anglo-Dutch group should be tried in a court in Nigeria.
The Nigerian residents of Ugali and Bale districts filed a lawsuit. They accuse the oil company and its Nigerian subsidiary SPDC of responsibility for soil and water pollution through decades of oil spills. They demand compensation and floor cleaning. Five years ago, they were demanding that the case be brought in a London court, arguing that they could not get their rights in a Nigerian court.
In 2017, a British court rejected the lawsuit. At the time, the judges ruled that Shell could not be held responsible for the offenses of its subsidiary in Nigeria. The five Supreme Court justices found the ruling to be “grave legal errors.” Accordingly, the court focused a lot on the relationship between Shell and its subsidiary.
Attorney Daniel Leader of the London law firm Lee Day, which represents the plaintiffs, said the Supreme Court ruling now gives the Ogil and Bell people “real hope” in a clean-up for Shell. On the other hand, Shell responded with “disappointment” to the ruling and blamed the leaks on criminal activities such as oil theft and sabotage on pipelines.
Just two weeks ago, a court in the Netherlands ordered Shell to pay compensation for the oil spill in two villages in Nigeria. Farmers from villages in the Niger Delta have filed a lawsuit. They actually filed their lawsuit in 2008 and are now 13 years later.
Oil reserves in the Niger Delta make Nigeria the largest producer in all of Africa. However, the vast majority of people in the delta live in poverty. Due to the environmental damage in the region, the most important economic sectors there, agriculture and fishing, are at great risk.
Attorney Holger Hebach explains the background to the procedure:
An important issue regarding corporate social responsibility is whether companies can be held responsible for human rights violations or environmental damage. Many had hoped that the Supply Chain Law would establish the basis on which aggrieved parties could seek compensation. This hope disappointed him. When announcing the government’s draft supply chain law, responsible ministers made it clear that previous liability regulations would remain.
However, there are already many international efforts to hold companies accountable for human rights violations and environmental damage under the current law. The UK Supreme Court has now taken an important decision in such a case. This is the situation Okabe et al. V. Royal Dutch Shell. The plaintiffs in the lawsuit are residents of the Niger Delta in Nigeria. Several international companies have been producing oil there for decades. One of them is Royal Dutch Shell.
Royal Dutch Shell has a subsidiary in Nigeria, which is the Shell Petroleum Development Company of Nigeria Ltd. This is registered in Nigeria and oil is produced there.
Oil production in the Niger Delta in Nigeria has resulted in large quantities of oil spilling repeatedly over the past few years and decades, causing severe damage to the environment, the health and living conditions of the population.
The plaintiffs in the lawsuit allege that the Nigerian subsidiary caused the damage and that the UK parent company was also responsible for it. That’s why they want to file a lawsuit.
The strange thing is that they do not want to implement the measure in Nigeria, but in Great Britain. They hope this will lead to an evaluation of the case by an independent court and the possibility of actually being able to enforce a ruling in their favor. Of course, it’s not up to the plaintiffs to decide which court to file your case. There are laws that regulate the jurisdiction of the courts. In principle, companies can be sued in the country in which they are based. However, in this case, there is a peculiarity that the plaintiffs want to sue two different persons from different countries. Separate procedures in different countries carry a risk of conflict of judgment; Moreover, it is not economical because witnesses must testify twice, etc.
That is why there are rules in place to enable procedures to be jointly executed in such cases – and courts seek to use them and avoid separate procedures.
In the case OkbabThere are many indications that the proceedings must take place in Nigeria: the plaintiffs live in Nigeria, the damages that have occurred on Nigerian soil and one of the companies that is supposed to file the case against is registered in Nigeria. However, there is a requirement in UK law that you can sue foreign companies or individuals in the UK if the content of the case relates to a lawsuit that has jurisdiction over the UK courts. Accordingly, plaintiffs can in principle also file a complaint against the Nigerian subsidiary of Shell in Great Britain if this is related to the case against the parent company Royal Dutch Shell. However, there is another condition here: there must be a “real problem” between the plaintiffs and the British parent company Royal Dutch Shell. Because the regulation states that you can sue foreign companies in Great Britain if the content of the lawsuit relates to a legal dispute against a British company that provides the possibility of misuse. Anyone wishing to have proceedings in the UK would always have the option to create jurisdiction in the UK Courts by participating in the litigation of a UK company. In order to prevent such arbitrary lawsuits, the courts must examine whether there are at least serious objective grounds for the lawsuit – whether there is a real problem between the plaintiff and the British company. Only then do they qualify and only then can the case against the foreign company also be brought to the UK.
In the case Okpabi Plaintiffs can only sue the British parent company in Great Britain if there is a “real problem”. Only in this case can the case be brought against the Nigerian subsidiary in Great Britain.
The two lower courts responded to this question in the negative. However, the ruling in the case was issued following the ruling of the Court of Appeal Vedanta, CSR news has already been reported on. This case concerns the liability of a British company for environmental damage in Zambia. The Supreme Court also dealt with conditions under which UK companies can be held responsible for the actions of their overseas subsidiaries.
Among other things, the Supreme Court made clear that there are no special liability rules for parent companies. They could be held responsible if they were responsible for the damage that occurred. Liability can arise, for example, from the fact that it has controlled the actions of the subsidiary, for example by issuing guidelines, through training, through instructions and participation in decisions. There are indications that this could have been the case here. The prosecutors have provided documents that make it possible that there may be other documents in the area of the accused that can be presented in the proceedings and that can support the plaintiffs’ claims.
It is important that the Supreme Court did not allow the work. Instead, it simply ruled that the courts of the United Kingdom had jurisdiction and that litigation could take place in Great Britain. However, he also asserts in his judgment that the claims cannot be rejected in full. It is expected that the following procedure will further clarify the corporate liability requirements.