Facts:
1,826 Zambian citizens who are resident in Chingola, Zambia filed a case against Konkola Copper Mines and Vedanta Resources Plc at the England and Wales Technology and Construction Court (hereinafter referred to as the UK High Court Division) on 31 July 2015. The claimants sought damages for personal injury, wide ranging environmental harm, damage to property, loss of income and amenity and enjoyment of land. The claims against both appellants were founded in negligence and breaches of applicable Zambian environmental laws. In effect, these proceedings were brought against Vedanta, a UK incorporated parent company, and its Zambian subsidiary.
The Issues:
The main issue before the UK Supreme Court was solely the preliminary question of the jurisdiction of the courts of England and Wales to determine the claims brought against KCM and Vedanta. In resolving the main issue of jurisdiction, however, the court had to address several related issues, which involved traversing volumes of significant evidence. These issues include whether or not the claimants abused EU law by relying on Article 4 of the Recast Brussels Regulation (Regulation (EU) 1215/2012 on Jurisdiction) to establish jurisdiction over Vedanta as ‘anchor’ defendants.
UK Court of Appeal (2017): Vedanta Resources Plc and Konkola Copper Mines Plc v. Dominic Liswaniso Lungowe and others [2018] 1 WLR 3575
The UK High Court Division of the UK Court of Appeal has rejected claims made by Vedanta and KCM in Zambia. The plaintiffs’ access to substantive justice in Zambian courts was the other substantive issue to be considered in regard to the question of jurisdiction. Both appellants failed on a balance of probabilities to prove that the court below had arrived at a plainly wrong decision and accordingly dismissed the appellants’ appeals. The UK Court of Appeal found that the UK High Court Division was on firm ground in finding that the claimants only needed to establish a ‘real risk’ that they would not obtain substantial justice in Zambia.
UK Technology and Construction Court, High Court Division (2015): Dominic Liswaniso Lungowe & Others V. and Vedanta Resources Plc and Konkola Copper Mines [2016] EWHC 975 (TCC)
The UK High Court has ruled that KCM breached the Zambian Companies Act by failing to discharge its business in line with the provisions of Zambian law. The claimants’ principle claim against Vedanta was in negligence; that Vedanta had a duty of care towards the claimants, which arose from their assumption of responsibility for protecting the environment and local communities.
The Holding
The UK Supreme Court has dismissed the defendants’ appeal in this case. The Court concluded that Zambia should have been the proper place for proceedings, given the location of the claimants, the alleged damage, the evidence and KCM’s personnel. There was no need to refer the matter to the Court of Justice for the EU, according to the Supreme Court. The UK Supreme Court dismissed the defendants’ appeal in this case.
Significance
The UK Supreme Court’s decision in the Lungowe case has significance beyond the UK and the EU. It highlights the need for multinational companies to be aware of the possibility that third party claimants may be able to bring claims against them in English court. The scope of potential claimants could include communities affected by operations of a local subsidiary. A parent company will only be found to be subject to a duty of care in relation to an activity of its subsidiary if ordinary, general principles of the law of tort regarding the imposition of a duty on the part of the parent in favour of a claim are satisfied.
The UK Supreme Court’s decision in the Lungowe v Vedanta case highlights the need for multinational companies to be aware of the possibility that any third-party claimants may bring claims against them in English courts. Questions remain as to why it took so long for KCM operations to be brought under scrutiny.
Similar cases in Zambia have been known to take several years without any explanation for the delay whatsoever. Take for instance the case of Nyasulu and 2000 others v. KCM which was commenced in the Lusaka High Court in 2007 and decided in 2011. The appeal was lodged in the Supreme Court in 2012 and decided upon in 2015.