1826 Zambian citizens issued proceedings against Zambian company KCM and Vedanta (KCM’s ultimate parent company) for personal injury, damage to property and loss of income, amenity and enjoyment of land as a result of pollution and environmental damage caused by discharges of harmful effluent from the Nchanga mine since 2005. Vedanta was served within the jurisdiction, while KCM was served out of the jurisdiction, with permission obtained on a without notice application. In September and October 2015 Vedanta and KCM respectively applied for declarations that the court lacked jurisdiction to try the claims or, alternatively, that it should not exercise such jurisdiction that it might have. Coulson J dismissed those applications. The Court of Appeal upheld the dismissal of those applications.
Held: the Supreme Court dismisses the appeal on three grounds. (1) Article 4.1 of the Recast Brussels Regulation confers a right on any claimant (regardless of their domicile) to sue an English domiciled defendant in England irrespective of connecting factors to other jurisdictions. The abuse of law test is whether the sole purpose of joining a defendant is to sue them other than in their Member State of domicile. The EU case law also suggests that the abuse of law doctrine is limited to situations where EU law is invoked collusively to subvert other EU provisions.
(2) On the facts, there was sufficient material identified by the judge in support of the view that the claimants’ case was arguable and the judge made no error of law in assessing whether there was a real triable issue against Vedanta, so his decision on the negligence claim must stand.
(3) In terms of the “proper place” test, the search is for a single jurisdiction in which the claims against all defendants may most suitably be tried. The lower courts had viewed irreconcilable judgments as a decisive factor in favour of England as the proper place for the claim against KCM, but Vedanta had by the time of the hearing offered to submit to the Zambian jurisdiction, so that the whole case could be tried there. Looking at the relevant connecting factors in the round, Zambia would plainly have been the proper place for this litigation as a whole, provided substantial justice was available to the parties in Zambia. However, cogent evidence shows that there is a real risk that substantial justice would not be obtainable in that foreign jurisdiction. It is not in doubt that Zambia has independent judges, courts and civil procedure which would ensure a just trial of large environmental group claims like this one, but the practicable impossibility of funding such group claims where the claimants are all in extreme poverty, because they could not obtain legal aid and because conditional fee agreements (CFAs) are unlawful in Zambia. Secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable effective litigation of this size and complexity, in particular against a well-resourced opponent like KCM.
Court's Press Summaryhttps://www.supremecourt.uk/cases/docs/uksc-2017-0185-press-summary.pdf