On 10 April 2019 the Supreme Court handed down its judgment upholding the Court of Appeal ruling that 1,826 Zambian citizens can bring a group action against UK-based Vedanta and its Zambian subsidiary Konkola Copper Mines plc (KCM) in the UK courts.
This has been a much anticipated judgment due to the potential liability of UK incorporated parent companies in respect of the actions of their foreign subsidiaries.
The claimants allege that the toxic discharges of a copper mine owned by KCM in Zambia caused considerable personal injury and pollution, and claim that KCM, and its English parent Vedanta, are liable for negligence and breach of duty. As Vedanta was an English company (and perhaps also as a result of the greater efficiency and powers of an English court when compared to the local courts), the claimants brought proceedings in England. Vedanta and KCM challenged the English court’s jurisdiction arguing that: (a) the English courts did not have jurisdiction to hear the claim against Vedanta; and (b) the appropriate place to bring the claims against KCM was Zambia.
As reported in our earlier Alerter (here) the Court of Appeal upheld the High Court’s decision that the case could be heard in England. In considering the appeal, the Supreme Court addressed the following issues:
The Supreme Court held as follows:
In short, the Supreme Court held that the English courts had jurisdiction. However, and although this case was about the question of jurisdiction, the judgment will also be of great interest to multinational parent companies based in the UK. In particular, the Supreme Court has made it clear that parent companies will not necessarily be insulated from liability for the actions of their foreign subsidiaries simply by virtue of them being separate legal entities. A parent company could find itself liable for the actions of its subsidiary if there is sufficient evidence that the parent took a sufficient part in the running of that subsidiary. Of course, whether there was involvement sufficient to attach liability to the parent is necessarily fact sensitive, and we await the final judgment at trial of this case with interest.