Published online by Cambridge University Press: 21 May 2021
This article examines private international law issues raised by civil liability cases commenced in the courts of home states against transnational corporations concerning their alleged involvement in the overseas human rights violations. These claims have been particularly successful in the United Kingdom, where in the last several years the framework of Brussels I Regulation (recast) and English common law rules made it appropriate for the English courts to assert jurisdiction over corporate defendants without the possibility of subjecting claims against the parent companies to forum non conveniens control. In 2019, however, the Supreme Court in a high-profile case Lungowe v Vedanta Resources plc expressed doubts as to whether England should always constitute a proper forum for litigating overseas wrongs arising from the operations of British multinationals. The article aims to assess how the search of the most appropriate forum to litigate the dispute might impact victims of business-related human rights abuses in the post-Brexit environment and propose avenues for legal change.
Conflicts of interest: The author declares none.
Post-Doctoral Research Fellow, Bonavero Institute of Human Rights, University of Oxford, UK. The author coordinates a project ‘Civil Liability for Human Rights Violations’ funded by the Oak Foundation. The first draft of this article was presented at the 2019 Global Business and Human Rights Scholars Association Conference at Essex. The author is grateful to Professor Surya Deva and anonymous peer-reviewers for their helpful suggestions.
1 Access to remedy is often referred to as the ‘forgotten’ pillar of the UNGPs. OHCHR, ‘Improving Accountability and Access to Remedy for Victims of Business-Related Human Rights Abuse’, A/HRC/32/19 (10 May 2016), para 8.
2 UNGPs, Commentary to Principle 26.
3 For a thorough analysis of the emerging trend towards Tort Liability Claims, see Enneking, Liesbeth, Foreign Direct Liability and Beyond – Exploring the Role of Tort Law in Promoting International Corporate Social Responsibility and Accountability (The Hague: Eleven International Publishing, 2012)Google Scholar.
4 Obstacles to access to justice in host states are well addressed in Joseph, Sarah, Corporations and Transnational Human Rights Litigation (London: Hart Publishing, 2004) 2–6 Google Scholar.
5 Brexit refers to the UK’s withdrawal from the European Union which took place on 31 December 2020.
6 Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ 2012 L351/1.
7 The private international law aspects of Tort Liability Claims in the UK are discussed in Uglješa Grušic, ‘International Environmental Litigation in EU Courts: A Regulatory Perspective’ (2016) 35:1 Yearbook of European Law 180; Elena Blanco and Ben Pontin, ‘Litigating Extraterritorial Nuisances under English Common Law and UK Statute’ (2017) 6:2 Transnational Environmental Law 285; Matthias Weller and Alexia Pato, ‘Local Parents as “Anchor Defendants” in European Courts for Claims Against Their Foreign Subsidiaries in Human Rights and Environmental Damages Litigation: Recent Case Law and Legislative Trends’ (2018) 23:2 Uniform Law Review 397.
8 The conceptual basis of the FNC doctrine and applicable principles are further discussed in sections II and III.
9 Civil Procedure Rules (CPR), Practice Direction 6B.
10 The law in this article is stated as best known to the author as of 1 March 2021.
11 UK Government, ‘Cross-border Civil and Commercial Legal Cases: Guidance for Legal Professionals’, https://www.gov.uk/government/publications/cross-border-civil-and-commercial-legal-cases-guidance-for-legal-professionals/cross-border-civil-and-commercial-legal-cases-guidance-for-legal-professionals (accessed 1 February 2021).
12 Vedanta Resources plc v Lungowe [2019] UKSC 20. The question of whether England is the proper place to bring the claim has evolved in response to two concerns. At the outset of the proceedings, forum conveniens operates as a safeguard against the potentially wide grounds for the proceedings on a foreign defendant (i.e., foreign subsidiary). At a later stage, FNC applies to stay an action on a defendant who has already been served (i.e., English-based parent company). In this article, the term forum [non] conveniens is used where the analysis relates to both processes. See further discussion in Fentiman, Richard, International Commercial Litigation, 2nd edn (Oxford: Oxford University Press, 2015) 424–26Google Scholar.
13 For an excellent overview, see Richard Meeran, ‘Access to Remedy: The United Kingdom Experience of MNC Tort Litigation for Human Rights Violations’ in Bilchitz, David and Deva, Surya (eds.), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Cambridge: Cambridge University Press, 2013) 378 Google Scholar.
14 In this context, the English jurisprudence can be contrasted with the landmark ruling of the Supreme Court of Canada in Nevsun Resources Ltd v Araya 2020 SCC 5 that customary international law prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity can ground a claim for damages against corporations under Canadian law. For an analysis, see Upendra Baxi, ‘Nevsun: A Ray of Hope in a Darkening Landscape?’ (2020) 5:2 Business and Human Rights Journal 241.
15 Bernaz, Nadia, Business and Human Rights: History, Law and Policy – Bridging the Accountability Gap (Abingdon: Routledge, 2016) 259 CrossRefGoogle Scholar.
16 Connelly v RTZ Corp plc [1998] AC 854; Lubbe v Cape plc [2000] 1 WLR 1545.
17 Bodo Community v Shell Petroleum Development Company of Nigeria Ltd [2014] EWHC 1973 (TCC); Arroyo v Equion Energia Ltd [2016] EWHC 1699 (TCC); His Royal Highness Okpabi v Royal Dutch Shell plc [2021] UKSC 3; Vedanta, note 12.
18 Guerrero v Monterrico Metals plc [2010] EWHC 3228 (QB); Kesabo v African Barrick Gold plc [2013] EWHC 4045 (QB); Kalma v African Minerals Ltd [2020] EWCA Civ 144; Vilca v Xstrata Ltd [2018] EWHC 27 (QB); AAA v Unilever plc [2018] EWCA Civ 1532.
19 For a thorough analysis of the legal separation of companies under traditional corporate law, see Blumberg, Phillip, The Multinational Challenge to Corporation Law: The Search for a New Corporate Personality (New York: Oxford University Press, 1993)Google Scholar.
20 For a knowledgeable discussion of the principle of parent company liability, see Mares, Radu, ‘Liability Within Corporate Groups: Parent Companies’ Accountability for Subsidiary Human Rights Abuses’ in Deva, Surya and Birchall, David (eds.), Research Handbook on Human Rights and Business (Cheltenham: Edward Elgar) 446 Google Scholar.
21 Jennifer Zerk, Corporate Liability for Gross Human Rights Abuses – Towards a Fairer and More Effective System of Domestic Law Remedies (Office of the UN High Commissioner for Human Rights: 2014) 45–50.
22 This argument was elaborated in Ekaterina Aristova, ‘Tort Litigation against Transnational Corporations in the English Courts: The Challenge of Jurisdiction’ (2018) 14:2 Utrecht Law Review 6, 8–10.
23 Lubbe, note 16.
24 Ibid.
25 [1990] 2 AC 605. Since the emergence of Tort Liability Claims, the English courts have relied on Caparo principles to determine whether a duty of care will arise in a particular case. In 2019, the Supreme Court in Vedanta held that the Caparo test is only engaged to deal with a ‘novel category of common law negligence liability’, while the parent company’s duty of care is neither special nor controversial. Vedanta, note 12, paras 54–56.
26 [2012] EWCA Civ 525.
27 Ibid, para 80.
28 Ibid, para 69.
29 Ibid, paras72 and 79.
30 Ibid, para 78.
31 [2014] EWCA Civ 635.
32 Ibid, para 37.
33 Ibid, para 26.
34 Ibid, para 38.
35 Vedanta, note 12.
36 Ibid, para 60.
37 Ibid, para 49.
38 Ibid, para 51.
39 Ibid, para 56.
40 Ibid, para 53.
41 Ibid.
42 Tara Van Ho, ‘Vedanta Resources plc and Another v. Lungowe and Others’ (2020) 114:1 American Journal of International Law 110, 115.
43 Okpabi, note 17.
44 Ibid, paras 129–134.
45 The problem of parent company liability is explored in detail in Witting, Christian, Liability of Corporate Groups and Networks (Cambridge: Cambridge University Press, 2018)CrossRefGoogle Scholar.
47 Lubbe, note 16, para 71.
48 It is not uncommon for the parties to Tort Liability Claims to agree to settle the case after the drawn-out jurisdictional battles. Early in 2021, it was announced that Vedanta agreed to settle the claims of the Zambian villagers without admitting liability.
49 On the advantages of litigation in the English courts, see Rogerson, Pippa, Collier’s Conflict of Laws, 4th edn (Cambridge: Cambridge University Press, 2013) 53 CrossRefGoogle Scholar.
50 CPR, Rules 6.36 and 6.37. See references to applicable case law in Torremans, Paul and Fawcett, James (eds.), Cheshire, North and Fawcett Private International Law, 15th edn (Oxford: Oxford University Press, 2017) 336–39Google Scholar.
51 Lungowe v Vedanta Resources plc [2016] EWHC 975 (TCC) para 141; AAA v Unilever plc [2017] EWHC 371 (QB) para 133.
53 Hill, Jonathan and Shúilleabháin, Máire, Clarkson & Hill’s Conflict of Laws, 5th edn (Oxford: Oxford University Press, 2016) 78 CrossRefGoogle Scholar.
54 Okpabi, note 17.
55 In recent years, the corporate defendants have attempted to establish that Tort Liability Claims amount to an abuse of EU law. However, the Supreme Court in Vedanta confirmed that the scope of this challenge is narrow and will not be met if the claimants succeed in presenting an arguable claim against the English-domiciled parent company. Vedanta, note 12, 25. In addition, Articles 33 and 34 of Brussels I allow stay of parallel proceedings in favour of the foreign forum, but they have not been extensively tested in the case law yet.
57 [1987] AC 460.
58 Erste Group Bank AG (London) v JSC (VMZ Red October) [2015] EWCA Civ 379 para 149.
60 Connelly, note 16.
61 Lubbe, note 16.
62 Owusu v Jackson [2005] ECR I-1383.
63 Ibid, para 37.
64 Ibid, para 38.
65 See, e.g., Adrian Briggs, ‘The Death of Harrods: Forum Non Conveniens and the European Court’ (2005) 121 Law Quarterly Review 535; Edwin Peel, ‘Forum Non Conveniens and European Ideals’ (2005) 3 Lloyd’s Maritime and Commercial Law Quarterly 363.
66 Lungowe v Vedanta Resources plc [2017] EWCA Civ 1528 para 34; Garcia v BIH (UK) Ltd [2017] EWHC 739 (Admlty) para 22–25; AAA v Unilever plc, note 51, para 68.
67 Vedanta, note 51, para 153.
68 Vedanta, note 12, para 39.
69 Carlos Lopez, ‘Symposium on Vedanta Resources plc vs Lungowe’, http://opiniojuris.org/2019/04/17/symposium-on-vedanta-resources-plc-vs-lungowe-judgment-of-the-united-kingdom-supreme-court/ (accessed 30 April 2020).
70 See Ministry of Justice, ‘Support for the UK’s intent to accede to the Lugano Convention 2007’, https://www.gov.uk/government/news/support-for-the-uks-intent-to-accede-to-the-lugano-convention-2007 (accessed 30 April 2020).
71 2019 No. 479.
72 The UK is made up of three separate jurisdictions (England and Wales, Scotland, Northern Ireland) and does not have a single unified legal system. This article is primarily concerned with the English law.
73 The framework of English national law and the rules for service of process are explained in Fentiman, note 12, 299–305.
74 The assertion of jurisdiction over a foreign subsidiary under the ‘necessary or proper party’ gateway will remain relatively unchanged.
75 As one scholar has reasonably predicted, the doctrine of FNC ‘may well be about to witness an upturn in fortunes’. See Arzandeh, Ardavan, Locating the Place of Forum (Non) Conveniens in the English National Jurisdiction Rules (Oxford: Hart Publishing, 2019) 104 Google Scholar.
76 Van Ho, note 42, 115.
77 The UK’s accession to the Lugano Convention is subject to EU consent. If the EU grants its approval, the Lugano Convention will enter in force following a three-month objection period.
78 It is possible that claimants would then consider suing the parent company alone in specific cases without seeking to join the foreign subsidiary to avoid the burdensome requirement to obtain permission to serve a claim form outside the jurisdiction and satisfy the court that England is the ‘proper forum’ for the trial.
79 Rogerson, note 49, 52.
80 Airbus Industrie GIE v Patel [1999] 1 AC 119, 131–132. For a thorough analysis, see Andrew Bell, Forum Shopping and Venue in Transnational Litigation (Oxford: Oxford University Press, 2003) 50–131.
81 Dickinson, Andrew and Lein, Eva (eds.), The Brussels I Regulation Recast (Oxford: Oxford University Press, 2015) 115–16Google Scholar.
82 See, e.g., Baxi, Upendra, ‘Geographies of Injustice: Human Rights at the Altar of Convenience’ in Scott, Craig (ed.), Torture as Tort: Comparative Perspectives on the Development of Transnational Human Rights Litigation (Oxford: Hart Publishing, 2001) 197, 207Google Scholar.
83 See, e.g., Cambior v Recherches internationales Quebec J.E. 98-1905 (Sup Ct) [1998].
84 See, e.g., In re Union Carbide Corporation Gas Plant Disaster at Bhopal India, 634 F Supp 842 (SDNY 1986); Aguinda v Texaco, Inc., 303 F3d 470 (2d Cir 2002); Acuña-Atalaya v Newmont Mining Corporation, 308 FSupp 3d 812 (D Del 2018).
85 See, e.g., Council of Europe, ‘Recommendation CM/Rec(2016)3 of the Committee of Ministers to Member States on Human Rights and Business, 2 March 2016’ (2016) para 34; Daniel Blackburn, Removing Barriers to Justice: How a Treaty on Business and Human Rights Could Improve Access to Remedy for Victims (The Netherlands: Centre for Research on Multinational Corporations, 2017) 72. The Second Revised Draft of the Binding Treaty on Business and Human Rights also suggests that the FNC should not be used by the courts to dismiss legitimate judicial proceedings brought by victims. OEIGWG, ‘Revised Draft of a Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises’, https://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/OEIGWG_RevisedDraft_LBI.pdf (accessed 15 March 2021).
86 Bell, note 80, 90–95.
87 Spiliada, note 57, 494.
89 Vedanta, note 12, paras 93–95.
90 Philippa Webb, ‘The Inconvenience of Liability: The Doctrine of Forum Non Conveniens in International Environment Litigation’ (2001) 6 Asia Pacific Journal of Environmental Law 377, 381.
91 Peter Muchlinski, ‘Corporations in International Litigation: Problems of Jurisdiction and the United Kingdom Asbestos Cases’ (2001) 50:1 International and Comparative Law Quarterly 1; Pippa Rogerson, ‘The Common Law Rules of Jurisdiction of the English Courts over Companies’ Foreign Activities’ in Piet Slot and Mielle Bulterman (eds.), Globalisation and Jurisdiction (The Hague: Kluwer Law International, 2004) 91.
92 Muchlinski, note 91, 25.
93 Meeran, note 13, 385.
94 Peter Muchlinski, ‘Limited Liability and Multinational Enterprises: A Case for Reform?’ (2010) 34:5 Cambridge Journal of Economics 915, 920.
95 The ability of the parent company to submit to the jurisdiction of the foreign courts may be limited by the provisions of the international investment law. In this case, the jurisdiction of the host court will not be available under the forum [non] conveniens test. An analysis of this issue is beyond the scope of this article.
96 In fact, the Court of Appeal in Lubbe recognized that giving a defendant a choice of jurisdiction and the right to consent to foreign proceedings ‘becomes almost a forum shopping in reverse’, but this statement was not upheld by House of Lords. [1998] CLC 1559, 1571.
98 Vedanta, note 12, para 88.
99 On this point and additional hurdles presented by the operation of the second limb of Spiliada in Tort Liability Claims, see Claire Bright, ‘Vedanta v. Lungowe Symposium: Foreign Direct Liability Cases in England after Vedanta’, Opinio Juris Blog (26 April 2019), http://opiniojuris.org/2019/04/26/vedanta-v-lungowe-symposium-foreign-direct-liability-cases-in-england-after-vedanta/ (accessed 9 October 2020).
100 Appeal No. UKSC 2018/0068 dated 12 May 2020 para 2.
101 The overbroad assertions of jurisdiction by the home states could even raise concerns about judicial imperialism and the paternalistic imposition of regulatory standards by developed states on developing states. These concerns are well addressed by Chilenye Nwapi, ‘Adjudicating Transnational Corporate Crimes in Foreign Courts: Imperialism or Assertion of Functional Jurisdiction’ (2014) 19 African Yearbook of International Law 143. A thorough consideration of these concerns is not within the scope of this article. For the current purposes, it is important to stress that the acceptance of jurisdiction by home states is not a panacea for holding TNCs accountable, nor is it a substitute for the proper functioning of the judicial systems in host states. Rather, it is one of the means by which victims can be provided with a remedy where host states are unwilling or unable to do so.
102 Vedanta, note 67, para 133. The Supreme Court has not commented on this conclusion.
103 It would still be possible for the claimants to proceed with the claims solely against the English-domiciled parent company without joining the foreign subsidiary and, therefore, avoid the jurisdictional challenges. The history of litigating Tort Liability Claims in the English courts suggests that foreign claimants rarely choose to sue the English-based parent on its own.
104 Halina Ward, ‘Towards a New Convention on Corporate Accountability? Some Lessons from the Thor Chemicals and Cape PLC Cases’ (2001) 12:1 Yearbook of International Environmental Law 105, 138.
105 Committee on Civil Litigation and the Interests of Public, Private International Law Aspects of Civil Litigation for Human Rights Violations (International Law Association, The Hague Conference: International Law Association, 2010) 5.
106 See references in note 85.
107 Adrian Briggs and Peter Rees, Civil Jurisdiction and Judgments, 4th edn (London: LLP, 2005) 349.
108 Richard Fentiman, ‘Brussels I and Third States: Future Imperfect?’ (2011) 13 Cambridge Yearbook of European Legal Studies 65, 71.
109 See discussion in Fentiman, note 12, 301.
110 In Vedanta, the parent company has been actively involved in the Zambian operations by providing various services to the subsidiary according to the Management Agreement. In Okpabi, the parent company issued mandatory policies and group-wide operating standards for the subsidiaries.
111 Lubbe, note 16, 1555.
112 Vedanta, note 67, para 84. These allegations were not tried on the merits since the case has settled.
113 On this point and the following arguments, see also Jan Wouters and Cedric Ryngaert, ‘Litigation for Overseas Corporate Human Rights Abuses in the European Union: The Challenge of Jurisdiction’ (2009) 40:4 George Washington International Law Review 939.
114 Bell, note 80, 125.
115 This argument was made previously by Muchlinski and Rogerson. See references in note 91.
116 In 2012, the Committee on Civil Litigation and the Interests of the Public of the International Law Association has unanimously agreed that reliance on the parent company’s domicile in cases of business-related human rights abuses is predictable and assists with closing the governance gaps with remedying the abuses when they occur. Committee on Civil Litigation and the Interests of Public, International Civil Litigation for Human Rights Violations (International Law Association, Sofia Conference: 2012), 28–29.
117 Rogerson, note 91, 101.
118 The actual degree of the parent company’s managerial control and the subsidiary’s operational autonomy will, as demonstrated by the existing case law, differ significantly depending on a wide range of factors, such as the size of TNC, the specific market and/or industry, the ownership structure and the corporate governance model adopted.
119 See, e.g., Clyde & Co, ‘Forum Shopping Possibility Confirmed’, https://www.clydeco.com/insight/article/forum-shopping-possibility-confirmed (accessed 30 April 2020); White & Case LLP, ‘Parent Company Liability: No Arguable Basis to Impose a Duty of Care on UK Parent Company’, https://www.whitecase.com/publications/alert/parent-company-liability-no-arguable-basis-impose-duty-care-uk-parent-company (accessed 30 April 2020).
120 Analysing the post-Brexit rules of jurisdiction, Dickinson has recently suggested a similar construct for the operation of the Spiliada discretion. Acknowledging the costly and time-consuming requirements of the existing model, he suggests ‘shifting the onus to the defendant in all cases and an emphasis on the requirement that another forum be “clearly [i.e. manifestly] more appropriate” than England […]’. He also proposed ‘more pro-active case management through (e.g.) strict costs capping, a limit in the number of pages of evidence and submissions for each side […].’ See Andrew Dickinson, ‘Walking Solo – A New Path for the Conflict of Laws in England’, ConflictsofLaws.net (4 January 2021), https://conflictoflaws.net/2021/walking-solo-a-new-path-for-the-conflict-of-laws-in-england/ (accessed 1 February 2021).
121 The proposal draws inspiration from the application of the FNC doctrine in Australia, where the courts place on the defendant a burden of showing that Australia is the clearly inappropriate forum. The guidance on the clearly-inappropriate-forum test was provided by the Australian High Court in Voth v Manildra Flour Mills Pry Ltd (1990) 171 CLR 538. There is ongoing academic debate as to whether the Australian approach is functionally different from the Spiliada test. See Ardavan Arzandeh, ‘Reconsidering the Australian Forum (Non) Conveniens Doctrine’ (2016) 65:2 International & Comparative Law Quarterly 475. The consideration of the Australian approach is beyond the scope of the article, although analysis of its implications may form the basis for future research. The argument advanced here is that modification of the ‘clearly inappropriate forum’ concept has at least three advantages for Tort Liability Claims. First, it removes an evaluative requirement to search for a single best forum to adjudicate the dispute. Second, it allows focusing on the existence of a significant connection between parties, the subject matter and England as a forum. Third, it shifts the onus to the defendant which is beneficial for the claimants who already face a challenge of substantiating the claim with limited access to the internal documents of the corporate groups.
122 This article does not call for a formal presumption of jurisdiction in cases where the parent company and the subsidiary are sued as co-defendants and the alleged parent company liability arises from the integrated nature of their activities. Instead, it calls for a more nuanced analysis of the significance of the connections between the parties, the subject matter of the claim and the forum in Tort Liability Claims. At the same time, the author cannot rule out the need for such a presumption in future depending on the direction of the post-Brexit jurisprudence.
123 One of the anonymous peer-reviewers of the article has rightly noted that the appropriateness of England as a forum to try Tort Liability Claims would be exercised following the weight of presented evidence. The argument advanced here does not imply that the domicile of the parent company in England should effectively resolve the Spiliada inquiry. It is suggested that the nature of allegations and the substance of the claim should be taken into consideration during the jurisdictional analysis along with other factors. Presently, connections of the parent company with England are consistently overlooked when exercising the court’s broad discretion.
124 In this context, it is also important to note a sensible suggestion from Dickinson on the limit in the number of pages of evidence and submissions from the parties to resolve the jurisdictional inquiry. See Dickinson, note 120.
125 Connelly, note 16, 876.
126 European Coalition of Corporate Justice, ‘Evidence for Mandatory Human Rights Due Diligence Legislation’, Background note (September 2020), https://corporatejustice.org/evidence-for-mhrdd-september-2020-_1.pdf (accessed 15 March 2021).
127 European Parliament, Resolution of 25 October 2016 on Corporate Liability for Serious Human Rights Abuses in Third Countries (2015/2315(INI)) (2016) para 25.
128 In Vedanta, the Court of Appeal specifically acknowledged that engagement in a mini-trial on substantive liability issues was not appropriate at the jurisdictional stage of proceedings before full disclosure had taken place. It was noted that the claimants may fail at the trial, but for jurisdictional purposes present evidence sufficient to allow the claims to proceed in the English courts. Vedanta, note note 66, paras 86 and 90.
129 The COVID-19 pandemic has also demonstrated that the civil justice system could adjust to social distancing, enabling hearings to take place remotely, where possible.
130 Kalma v African Minerals Ltd, note 18.
131 Campbell McLachlan, ‘International Litigation and the Reworking of the Conflict of Laws’ (2004) 120:4 Law Quarterly Review 580.
132 Skinner, Gwynne (assisted by Chambers, Rachel and McGrath, Sarah), Transnational Corporations and Human Rights: Overcoming Barriers to Judicial Remedy (Cambridge: Cambridge University Press, 2020) 27 CrossRefGoogle Scholar.
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