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Cross-border Human Rights and Environmental Damages Litigation in Europe: Recent Case Law in the UK
Over the last few years, litigation in European courts against gross human rights violations and widespread environmental disasters has intensified. Recent case law shows that victims domiciled in third States often attempt to sue the local subsidiary and/or its parent company in Europe, which corresponds to the place where the latter is seated. In light of this, national courts of the EU have been asked to determine whether the parent company located in a Member State may serve as an anchor defendant for claims against its subsidiary – sometimes with success, sometimes not:
For example, in Okpabi & Ors v Royal Dutch Shell Plc & Anor, the English High Court, Queen’s Bench Division, by its Technology and Construction Court, decided that it had no international jurisdiction to hear claims in tort against the Nigerian subsidiary (SPDC) of Royal Dutch Shell (RDC) in connection with environmental and health damages due to oil pollution in the context of the group’s oil production in Nigeria. To be more specific, Justice Fraser concluded that the Court lacked jurisdiction over the action, inasmuch as the European parent company did not owe a duty of care towards the claimants following the test established in Caparo Industries Plc v Dickman. Under the Caparo-test, a duty of care exists where the damage was foreseeable for the (anchor) defendant; imposing a duty of care on it must be fair, just, and reasonable; and finally, there is a certain proximity between the parent company and its subsidiary, which shows that the first exercises a sufficient control over the latter.
On 14 February 2018, the Court of Appeal validated the first instance Court’s reasoning by rejecting the claimants appeal (the judgment is available here). In a majority opinion (Justice Sales dissenting), the second instance Court confirmed that the victims’ claims had no prospect of success. Nevertheless, Justice Simon provided a different assessment of the proximity requirement: after analysing the corporate documents of the parent company, he observed that RDS had established standardised policies among the Shell group. According to the Court, however, this did not demonstrate that RDS actually exercised control over the subsidiary. At paragraph 89 of the judgment, Justice Simon states that it is “important to distinguish between a parent company which controls, or shares control of, the material operations on the one hand, and a parent company which issues mandatory policies and standards which are intended to apply throughout a group of companies (…). The issuing of mandatory policies plainly cannot mean that a parent has taken control of the operations of a subsidiary (…) such as to give rise to a duty of care”. Therefore, the Court of Appeal set a relatively high jurisdictional threshold that will be difficult for claimants to pass in the future.
Conversely, in Lungowe v Vedanta, a case that involved a claim against a parent company (Vedanta) seated in the UK and its foreign subsidiary for the pollution of the Kafue River in Zambia, as well as the adverse consequences of such an occurrence on the local population, the Court of Appeal concluded that there was a real issue to be tried against the parent company. Moreover, the Court considered that the subsidiary was a necessary and proper party to claim and that England and Wales was the proper place in which to bring the claims. Apparently, this case involved greater proximity between the parent company and its subsidiary compared to Okpabi. In particular, the fact that Vedanta hold 80% of its subsidiary’ shares played an important role. The same can be said as regards the degree of control of Vedanta’s board over the activities of the subsidiary (see the analysis of Sir Geoffrey Vos at paragraph 197 of the Okpabi appeal).
Unsatisfied with the current landscape, some States adopted –or are in the process of adopting– legislations that establish or reinforce the duty of care or vigilance of parent companies directly towards victims. In particular, France adopted the Duty of Vigilance Law in 2017, according to which parent companies of a certain size have a legal obligation to establish a vigilance plan (plan de vigilance) in order to prevent human rights violations. The failure to implement such a plan will incur the liability of parent companies for damages that a well-executed plan could have avoided. In Switzerland, a proposal of amendment of the Constitution was recently launched, the goal of which consists in reinforcing the protection of human rights by imposing a duty of due diligence on companies domiciled in Switzerland. Notably, the text establishes that the obligations designated by the proposed amendment will subsist even where conflict of law rules designate a different law than the Swiss one (overriding mandatory provision). Finally, some other States, such as Germany, propose voluntary measures through the adoption of a National Action Plan, as this was suggested by the EU in its CSR Strategy.
For further thoughts see Matthias Weller / 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” forthcoming in Uniform Law Review 2018, Issue 2, preprint available at SSRN.
Draft Withdrawal Agreement, Continued
It is not quite orthodox to follow on oneself’s post, but I decided to make it as a short answer to some emails I got since yesterday. I do not know why Article 63 has not been agreed upon, although if I had to bet I would say: too complicated a provision. There is much too much in there, in a much too synthetic form; per se this does not necessarily lead to a bad outcome , but here… it looks like, rather. Just an example: Article 63 refers sometimes to provisions, some other to Chapters, and some to complete Regulations. Does it mean that “provisions regarding jurisdiction” are just the grounds for jurisdiction, without the lis pendens rules (for instance), although they are in the same Chapter of Brussels I bis?
One may also wonder why a separate rule on the assessment of the legal force of agreements of jurisdiction or choice of court agreements concluded before the end of the transition period in civil and commercial matters (Regulation 1215/2912) and maintenance (Regulation 4/2009): does the reference to “provisions regarding jurisdiction” not cover them already? Indeed, it may just be a reminder for the sake of clarity; but taken literally it could lead to some weird conclusions, such as the Brussels I Regulation taken preference over the 2005 Hague Convention “in the United Kingdom, as well as in the Member States in situations involving the United Kingdom”, whatever these may be. Of course I do not believe this is correct.
At any rate, for me the most complicated issue lies with the Draft Withdrawal Agreement provisions regarding time. As I already explained yesterday, according to Article 168 “Parts Two and Three, with the exception of Articles 17a, 30(1), 40, and 92(1), as well as Title I of Part Six and Articles 162, 163 and 164, shall apply as from the end of the transition period”, fixed for December 31st, 2020 (Article 121). In the meantime, ex Article 122, Union Law applies, in its entirety (for no exception is made affecting Title VI of Part Three). What are the consequences? Following an email exchange with Prof. Heredia, Universidad Autónoma de Madrid, let’s imagine the case of independent territorial insolvency proceedings – Article 3.2 Regulation 2015/848: if opened before December 31st, 2020, they shall be subject to the Insolvency Regulation. If main proceedings are opened before that date as well, the territorial independent proceedings shall become secondary insolvency proceedings – Article 3.4 Insolvency Regulation. If the main proceedings happen to be opened on January 2nd, 2021, they shall not – Article 63.4 c) combined with Article 168 Draft Withdrawal Agreement (I am still discussing Articles 122 and 168 with Prof. Heredia).
Another not so easy task is to explain Article 63.1 in the light of Articles 122 and 168. The assessment of jurisdiction for a contractual claim filed before the end of the transition period will be made according to Union Law, if jurisdiction is contested or examined ex officio before December 31st, 2020; and according to the provisions regarding jurisdiction of Regulation 1215/2012 (or the applicable one, depending on the subject matter, see Article 63.1 b, c, d) Draft Withdrawal Agreement, if it -the assessment- happens later. Here my question would be, what situations does the author of the Draft have in mind? Does Article 63.1 set up a kind of perpetuatio iurisdictionis rule, so as to ensure that the same rules will apply when jurisdiction is contested at the first instance before the end of the transition period, and on appeal afterwards (or even only afterwards, where it is possible)? Or is it a rule to be applied at the stage of recognition and enforcement where the application therefor is presented after the end of the transition period (but wouldn’t this fall under the scope of Article 63.3)?
That is all for now – was not a short answer, after all, and certainly not the end of it.
(Addenda: as for the UK, on 13 July 2017, the Government introduced the Withdrawal Bill to the House of Commons. On 17 January 2018, the Bill was given a Third Reading and passed through the House of Commons. Full text of the Bill as introduced and further versions of the Bill as it is reprinted to incorporate amendments (proposals for change) made during its passage through Parliament are available here. The Bill aims at converting existing direct EU law, including EU regulations and directly effective decisions, as it applies in the UK at the date of exit, into domestic law.)
Draft Withdrawal Agreement 19 March 2018: Still a Way to Go
Today, the European Union and the United Kingdom have reached an agreement on the transition period for Brexit: from March 29 of next year, date of disconnection, until December 31, 2020. The news are of course available in the press, and the Draft Withdrawal Agreement of 19 March 2018 has already been published… coloured: In green, the text is agreed at negotiators’ level and will only be subject to technical legal revisions in the coming weeks. In yellow, the text is agreed on the policy objective but drafting changes or clarifications are still required. In white, the text corresponds to text proposed by the Union on which discussions are ongoing as no agreement has yet been found. For ongoing judicial cooperation in civil and commercial matters (Title VI of Part III, to be applied from December 31, 2020: see Art. 168), this actually means that subject to “technical legal revisions”, the following has been accepted:
- Art. 62: The EU and the UK are in accordance as to the application by the latter (no need to mention the MS for obvious reasons) of the Rome I and Rome II regulations to contracts concluded before the end of the transition period, and in respect of events giving rise to damage, and which occurred before the end of the transition period.
- Art. 64: There is also agreement as to the handling of ongoing cooperation procedures, whereby requests for service abroad, the taking of evidence and in the frame of the European Judicial Network are meant.
- Art. 65: There is agreement as well as to the way Council Directive 2003/8/EC (legal aid), Directive 2008/52/EC on certain aspects of mediation in civil and commercial matter, and Council Directive 2004/80/EC (relating to compensation to crime victims) will apply after the transition period.
Conversely, no agreement has been found regarding Art. 63, i.e., how to deal with jurisdiction, recognition and enforcement of judicial decisions, and related cooperation between central authorities (but whatever is agreed will also be valid in respect of the provisions of Regulation (EU) No 1215/2012 as applicable by virtue of the agreement between the European Community and the Kingdom of Denmark, see Art. 65.2, in green).
In the light of this it may be not really worth to start the analysis of the Title as a whole: Art. 63 happens to be the less clear provision. Some puzzling expressions such as “as well as in the Member States in situations involving the United Kingdom” are common to approved texts, but may change in the course of the technical legal revision. So, let’s wait and see.
NoA: Another relevant provision agreed upon – in green- is Art. 124, Specific arrangements relating to the Union’s external action. Title X of Part III, on pending cases and new cases before the CJEU, remains in white.
And: On the Draft of February 28, 2018 see P. Franzina’s entry here. The Draft was transmitted to the Council (Article 50) and the Brexit Steering Group of the European Parliament; the resulting text was sent to the UK and made public on March 15.
News
AMEDIP’s upcoming webinar: The Construction of Private International Law – 27 April 2023 (at 14:30 Mexico City time) (in Spanish)
The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 27 April 2023 at 14:30 (Mexico City time – CST), 22:30 (CEST time). The topic of the webinar is the Construction of Private International Law and will be presented by Prof. Jorge Alberto Silva (in Spanish).
The details of the webinar are:
Link: https://us02web.zoom.us/j/85789687012?pwd=aXlKWFpzb2Qyb2VoNklwMWxyQ082UT09
Meeting ID: 857 8968 7012
Password: AMEDIP
Participation is free of charge.
This event will also be streamed live: https://www.facebook.com/AmedipMX
The University of Bologna Summer School on Transnational Litigation: what you should know about its 2023 edition
[This post has been prepared by Ms. Francesca Albi, J.D. Candidate | Università degli Studi di Verona]
The Summer School on Transnational Litigation has been organized since 2019 within the Ravenna Program on Cross-Border Disputes by the University of Bologna, Department of Juridical Sciences – Ravenna Campus (Italy), under the direction of Prof. Michele Angelo Lupoi.
The organization of its 2023 edition confirms the success this projects continues to enjoy among participants from all over the world, who, over the years, are contributing to build a promising network of Private International Law enthusiasts. Indeed, this project has proven to be a building-bridges catalyst to connect people with the same interests in Private International Law issues: in this sense, this multi-year Summer School actively contributes to the sharing and spread of knowledges and views, which go beyond borders in every possible sense.
In 2023, the Summer School will take place from Monday 17 to Saturday 22 July, both in person at the Faculty of Law (Via Oberdan 1/2) in Ravenna – Italy, and online.
The title, which summarises the hot topics of the courses of this year’s edition, is “Cross-border litigation and international arbitration”. As a matter of fact, the themes dealt with will concern, on one hand, transnational litigation from a wide perspective (i.e., involving climate litigation, cross-border maritime litigation, family and succession Private International Law, civil and commercial litigation), and, on the other hand, the increasingly interesting matter of international arbitration. The full schedule of classes is available and may be downloaded at https://site.unibo.it/transnational-litigation/en/program.
Participants will have the outstanding opportunity to acquire specialised knowledges on these relevant topics of growing importance directly from experts in such matters. In fact, the faculty consists of renowned scholars and legal practitioners, who will offer their experience involving diverse professional backgrounds developed in different States over the world. In detail, the lecturers in this edition are (in alphabetical order) Apostolos Anthimos, Giovanni Chiapponi, Elena D’Alessandro, David Estrin, Marco Farina, Francesca Ferrari, Chris Helmer, Albert Henke, Emma Roberts, Marco Torsello, Stefano Alberto Villata and Anna Wysocka-Bar. Their biographies and professional experience may be consulted at https://site.unibo.it/transnational-litigation/en/faculty.
Registration to the School are now open!
In order to participate, some requirements should be met: applicants must be students or graduate students of a Bachelor (three-years) or Master (five-years) Degree (or equivalent under previous systems) in Law (LMG/01), Legal Services Science (L-14), Political and International Relationships Science (L-36), International Relationships (LM52), or Political Sciences (LM62). Other candidates may also be accepted upon the presentation of the CV which should be show a connection to the topics of the Summer School. Alongside students and post-grad students, also practitioners in legal matters are invited to participate. In this regard, it must be noticed that the Ravenna Bar Association will grant 20 formative credits to Italian lawyers who attend the Summer School.
Registration to the Summer School is possible upon the payment of a fee, whose amount is €250,00 and which does not cover expenses for the accommodation and meals (please, note that registration is considered completed only when the payment of the fee is fulfilled). Applications are open until 6 July 2023 (h 23.59 CET); it is not possible to apply beyond this deadline. The application procedure is described at https://site.unibo.it/transnational-litigation/en/fees-and-forms.
In this regard, it is worth mentioning that, in order to give to one deserving law student or law graduate, who meets specific age requirements, the opportunity to attend the Summer School online free of charge, a call for papers has been launched. It consists in the submission of an originally and previously unpublished paper on a topic concerning transnational litigation and international arbitration. A selection committee, composed by staff and faculty members of the Summer School, will evaluate the papers and will reward the author of the best one through the possibility to attend the full Summer School online without paying the ordinary registration fee. Moreover, the best three papers will be published in the Linkedin Newsletter of the Summer School on Transnational Litigation “Transnational litigation pills”. Every submission is truly appreciated. Detailed information on this call for papers may be found on the website of the Summer School, especially in the section “Fees and forms”.
For any question regarding the application process or logistics, the contact person is Dr. Cinzia Cortesi, Manager of Fondazione Flaminia (master@fondazioneflaminia.it; +39 0544 34345). Otherwise, in order to acquire further information on the project, courses and call for papers, it is possible to contact Prof. Michele Angelo Lupoi, Director of the Summer School (micheleangelo.lupoi@unibo.it) or Francesca Albi, Tutor (francesca.albi@unibo.it).
Further information may be found in the official website of the Summer School at https://site.unibo.it/transnational-litigation/en.
The organization team of the Summer School warmly invites everyone who meets the requirements listed above to apply for the 2023 edition courses, in order to allow as many people as possible the exciting chance to become part of a group of colleagues and friends with the common interest in Private International Law, that is larger and larger every year.
New Journal Announcement: the Chinese Journal of Transnational Law
Wuhan University Institute of International Law, in partnership with global research leader SAGE, is delighted to announce the launch of a new journal “Chinese Journal of Transnational Law”.
The Chinese Journal of Transnational Law is a double-blind peer-reviewed journal that aims to address global challenges from the perspective of transnational law, which is broadly defined to cover international law (public and private), international economic law, comparative law, the interaction between domestic and international law, and any other legal field possessing a cross-border element. This journal embraces relevant submissions from different cultures and regions and attracts readers from the global, regional and Chinese markets. The journal shall be open to not only traditional doctrinal and theoretical legal research on transnational law, but also contextual and inter-disciplinary research. Although focused on contemporary matters in its aspiration to be a forum for the latest debates on transnational legal studies, it also considers submissions inspired by in-depth historical perspectives that cast new light on present developments. The CJTL covers broad topics including but not limited to:
- Innovative transnational dispute resolution, including both state-to-state and private dispute resolution mechanisms and the impact of culture, psychology, language and geopolitics on dispute resolution;
- Transnational trade, investment and economic governance;
- Transnational family law and the wellbeing of children, including surrogacy, child abduction and same sex marriage in the cross-border context;
- Transnational regulation of technology;
- Transnational corporate responsibility and governance;
- Transnational protection of private rights in tort and transactions;
- Transnational law and development;
- Transnational law and global health governance;
- Transnational environment protection and climate change;
- Transnational criminal law;
- Unilateral sanctions, extraterritorial regulations and blocking law.
The Chinese Journal of Transnational Law accepts submissions year round on any topic covered in the journal scope. In the meantime, the journal will publish calls for special issues occasionally. A call for the first special issue is going to be announced soon. You can find more information about this journal and submit your paper here.