Commentary: Lowering the bar (in a good way): the UK Supreme Court decision in Okpabi v. Shell
"Lowering the bar (in a good way): the UK Supreme Court decision in Okpabi v. Shell", 17 February 2021
Parent companies incurring common law duties of care to foreign claimants have gone from a distant hypothetical to a very real possibility. Two weeks ago, the Dutch Court of Appeal was the first court to hold on the merits that RDS, the parent company of the Shell group, incurred a duty of care to farmers in the Niger Delta. Now the UK Supreme Court (UKSC) has ruled in the case of Okpabi v. Shell that it is at least arguable that RDS had a duty of care towards the inhabitants of the Ogale and Bille communities, confirming its decision in Vedanta v. Lungowe, and allowing their case to proceed in English courts. In this blog I discuss the UKSC’s decision and its implications, and compare it to the Dutch Court of Appeals decision.
... The claims concern significant oil pollution in the Niger Delta, allegedly caused by Shell’s negligence in maintaining pipelines and other oil infrastructure – broadly similar to the Milieudefensie case in the Netherlands, discussed here.
... The UKSC has now reversed the Appeal decision, holding that the claim against RDS contains a sufficiently ‘triable issue’ and remitting the case to the High Court....
... The bulk of the judgment concerns the Court’s assessment of the way the Court of Appeal assessed the level of control allegedly exercised by RDS. The Court had already noted in Vedanta that it would be inappropriate for courts to engage in ‘mini-trials’ in response to a challenge to jurisdiction over a foreign defendant.
... Last month’s decision in the Milieudefensie case and the Supreme Court’s decision in Okpabi constitute major steps in ensuring that duties of care on parent companies can be plausibly argued before home state courts. Both the more realistic level of scrutiny a court should apply to such claims and the broadened scope of actions that can lead to a duty of care may mean that future claims arguing parent company liability become much more viable. Of course, the jurisdiction question still hangs over such cases, especially since the UK is no longer subject to the Brussels-I Regulation and forum non conveniens can be applied to claims against UK-domiciled parent companies.