Lungowe v Vedanta Resources plc

Hilary Term

[2019] UKSC 20

On appeal from: [2017] EWCA Civ 1528

Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents)

before

Lady Hale, President

JUDGMENT GIVEN ON

10 April 2019

Heard on 15 and 16 January 2019

Appellants

Respondents

Charles Gibson QC	Richard Hermer QC
Geraint Webb QC	Marie Louise Kinsler QC
Ognjen Miletic	Robert Weir QC
Christopher Adams	Edward Craven
(Instructed by Herbert	(Instructed by Leigh Day)
Smith Freehills LLP)

Interveners (1 and 2)

Tim Otty QC

Tim Johnston

Professor Robert McCorquodale

George Molyneaux

(Instructed by Omnia Strategy

LLP)

Intervener (3)

Likando Kalaluka SC

Attorney General of Zambia

Interveners:-

LORD BRIGGS: (with whom Lady Hale, Lord Wilson, Lord Hodge and

Lady Black agree)

Introduction

1. This litigation arises from alleged toxic emissions from the Nchanga Copper Mine in the Chingola District of Zambia. The claimants, who are the respondents to this appeal, are a group currently consisting of some 1,826 Zambian citizens who live in four communities within the Chingola District. They are, by any standards, very poor members of rural farming communities served by watercourses which provide their only source of water for drinking (by themselves and their livestock) and irrigation for their crops. They say that both their health and their farming activities have been damaged by repeated discharges of toxic matter from the Nchanga Copper Mine into those watercourses, from 2005 to date.

2. The Nchanga Copper Mine (“the Mine”) consists, in part, of an open-cast mine, said to be the second largest in the world, and in part of a deep mine. Its

immediate owner is the second defendant Konkola Copper Mines plc (“KCM”),

which is a public company incorporated in Zambia. KCM is the largest private employer in Zambia, employing some 16,000 people, mainly at the Mine. The first

defendant Vedanta Resources plc (“Vedanta”) is the ultimate parent company of

KCM. It is the parent of a multinational group, listed on the London Stock Exchange, with interests in minerals, power, oil and gas in four continents. Vedanta is incorporated and domiciled in the United Kingdom. Although Vedanta claims only to have 19 employees of its own, eight of whom are its directors, the Vedanta Group employs some 82,000 people worldwide. KCM is not a 100% subsidiary of Vedanta, since the Zambian government has a significant minority stake, but materials published by Vedanta state that its ultimate control of KCM is not thereby to be regarded as any less than it would be if wholly owned.

3. The claims against both defendants are pleaded in common law negligence and breach of statutory duty. Those causes of action are pursued against KCM on the basis that it is the operator of the Mine. As against Vedanta, the same causes of

action are said to arise by reason of the “very high level of control and direction that

the first defendant exercised at all material times over the mining operations of the second defendant and its compliance with applicable health, safety and

environmental standards”: (Particulars of Claim, para 79).

4. This appeal is all (and only) about jurisdiction; that is, the jurisdiction of the courts of England and Wales to determine those claims against both defendants. As against Vedanta, the claimants rely upon article 4 of the Recast Brussels Regulation (Regulation (EU) 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters). As against KCM the claimants rely

upon what may loosely be called the “necessary or proper party” gateway of the

English procedural code for permitting service of proceedings out of the jurisdiction, now to be found mainly in para 3.1 of CPR Practice Direction 6B.

5. The procedural background to this appeal is, in outline, as follows. The claimants issued the Claim Form in July 2015. Vedanta was served within the jurisdiction. Service was effected on KCM out of the jurisdiction pursuant to permission obtained on a without-notice application on 19 August 2015. Both Vedanta and KCM applied to challenge jurisdiction, in September and October 2015 respectively. Their applications were heard together, over three days in April 2016, by Coulson J, who delivered a comprehensive reserved judgment dismissing them

on 27 May 2016 [2016] EWHC 975 (TCC). The defendants’ appeals were heard

over two days in July 2017 and dismissed, again in a comprehensive reserved

judgment, in October 2017 [2018] 1 WLR 3575. The defendants’ further appeals to

this court were heard, again over two full days, in January 2019.

Proportionality

6. It is necessary to say something at the outset about the disproportionate way in which these jurisdiction issues have been litigated. In Spiliada Maritime Corpn v

Cansulex Ltd (“the Spiliada”) [1987] AC 460, 465, Lord Templeman said this, about

what was, even then, the disproportionate manner in which jurisdiction challenges

were litigated:

“In the result, it seems to me that the solution of disputes about

the relative merits of trial in England and trial abroad is pre- eminently a matter for the trial judge. Commercial Court judges are very experienced in these matters. In nearly every case evidence is on affidavit by witnesses of acknowledged probity. I hope that in future the judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Chieveley in this case in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days. An appeal should be

rare and the appellate court should be slow to interfere.”

That dictum is, in my mind equally applicable to all the judges in what are now the Business and Property Courts of England and Wales, including, as in this case, the Technology and Construction Court.

7. That requirement for proportionality, and for respect to be given to first instance decisions on jurisdiction, has been repeated, perhaps in less colourful terms, in numerous subsequent cases. In VTB Capital plc v Nutritek International Corpn [2013] 2 AC 337, Lord Neuberger of Abbotsbury said this, at paras 82 to 83:

“82. The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.

83. Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter

proceeds to trial.”

8.         At para 84 Lord Neuberger cited dicta to the same effect by Waller LJ in

Cherney v Deripaska (No 2) [2010] 2 All ER (Comm) 456, para 7, in which he

concluded that it “would have been better for both parties and better use of court

time if they had expended their money and their energy on fighting the merits of the

claim”.

9. Jurisdiction challenges frequently raise questions about whether the claim against one or more of the defendants raises a triable issue. As it is now common ground, this broadly replicates the summary judgment test. Issues of this kind are, regardless whether contained within jurisdiction disputes, subject to a similar requirement for proportionality, the avoidance of mini-trials and the exercise of judicial restraint, in particular in complex cases, as was emphasised in the following well known passage from the speech of Lord Hope of Craighead in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1:

“94. For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is - what is to be the scope of that inquiry?

95. I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman [[2001] 1 All ER 91], at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.

96.       In Wenlock v Moloney [1965] 1 WLR 1238 the

plaintiff’s claim of damages for conspiracy was struck out after

a four day hearing on affidavits and documents. Danckwerts LJ said of the inherent power of the court to strike out, at p 1244B- C:

‘this summary jurisdiction of the court was never

intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that

power.’”

10. The extent to which these well-known warnings have been ignored in this litigation can be measured by the following statistics about the materials placed

before this court. The parties’ two written cases (ignoring annexes) ran to 294 pages.

The electronic bundles included 8,945 pages. No less than 142 authorities were deployed, spread over 13 bundles, in relation to an appeal which, on final analysis, involved only one difficult point of law.

11. A particular reason for the requirement to exercise proportionality in jurisdiction disputes of this kind is that, in most cases, they involve a contest between two competing jurisdictions in either of which the parties could obtain substantial justice. The exception, an issue whether substantial justice is obtainable in one of the competing jurisdictions, may require a deeper level of scrutiny, not least because a conclusion that a foreign jurisdiction would not provide substantial justice risks offending international comity. Such a finding requires cogent evidence, which may properly be subjected to anxious scrutiny. Nonetheless, the fact that such an issue arises in a particular case (as in this appeal) is no excuse for ignoring the requirement for proportionality in relation to all the other issues.

12. Judicial restraint is of particular importance in relation to jurisdiction disputes which, wholly exceptionally, reach this court, in particular in cases such as the present, where the Court of Appeal has already concurred with the fact-finding and evaluative analysis of the first instance judge. The essential business of this court is to deal with issues of law, rather than fact-finding or the re-exercise of discretion. The pursuit of detailed matters of factual (or evaluative) analysis in this court is therefore inappropriate, both because it is likely to involve a needless and useless

misapplication of the parties’ time and resources, and because it distracts this court

from its proper focus upon real issues of law.

13. Nor is it permissible to dress up what is in reality a factual dispute as if it were, or involved, a misdirection in law by the first instance judge. As will appear,

a telling example in the present case is the appellants’ assertion that Coulson J

applied an insufficiently rigorous or detailed analysis of the claimants’ pleaded case

against Vedanta, for the purpose of deciding whether it disclosed a real issue to be tried. Within every jurisdiction dispute, or embedded question whether there is a triable issue, the first instance judge faces a typical quandary: how to balance the requirement for proportionality against the need to ensure that resources are not wasted on an unnecessary trial. The choice, at how deep a level of detail to conduct that analysis and then in how much detail to express conclusions in a judgment, are matters for the experienced first instance judge, with which an appellate court should be slow to interfere.

14. The fact that it has been necessary, despite frequent judicial pronouncements to the same effect, yet again to emphasise the requirements of proportionality in relation to jurisdiction appeals, suggests that, unless condign costs consequences are made to fall upon litigants, and even their professional advisors, who ignore these requirements, this court will find itself in the unenviable position of beating its head against a brick wall.

The issues on this appeal

15. Although technically there are two appeals, one by each of the defendants, they are closely interrelated and the proceedings before this court are best understood as a single appeal. The issues, and the interrelationship between them, can most easily be summarised by reference to the structure applicable to the establishment of jurisdiction in claims against defendants one of which is domiciled within, and the other without, the jurisdiction of the English court. The defendant

domiciled here will be referred to as “the anchor defendant”. The defendant

domiciled abroad will be referred to as “the foreign defendant”. The essential

structure is common ground and may therefore be briefly summarised.

16. Jurisdiction against the anchor defendant derives directly from article 4.1 of the Recast Brussels Regulation, which provides that:

“Subject to this Regulation, persons domiciled in a member

state shall, whatever their nationality, be sued in the courts of

that member state.”

That basic provision is designed not only for the protection of EU domiciliaries, but also to enable a claimant to know, with reasonable certainty, where he may sue. In Owusu v Jackson (Case C-281/02) [2005] QB 801 the Court of Justice held, contrary to earlier English jurisprudence, that this conferred a right on any claimant (regardless of their domicile) to sue an English domiciled defendant in England, free from jurisdictional challenge upon forum non conveniens grounds, even where the competing candidates for jurisdiction were England (part of a member state) and some other non-member state such as, here, Zambia. The decision related to article 2 of the earlier Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968, which was in identical terms to the present Recast Brussels Regulation.

17. This does not, of course, prevent any defendant from seeking to have a claim struck out as an abuse of process or as disclosing no reasonable cause of action, or from seeking reverse summary judgment upon the basis that the claim discloses no triable issue against that defendant. Vedanta has not pursued a strike-out or summary

judgment application of that kind, but both it and KCM assert that the claimants’

pleaded case and supporting evidence disclose no real triable issue against Vedanta, because Vedanta cannot be shown to have done anything in relation to the operation of the Mine sufficient either to give rise to a common law duty of care in favour of the claimants, or a statutory liability as a participant in breaches of Zambian environmental protection, mining and public health legislation. Vedanta was, it is said, merely an indirect owner of KCM, and no more than that.

18. Secondly, Vedanta maintains that, even if the pleaded claim discloses a triable issue against it, nonetheless the claim should be stayed as an abuse of EU law, because the claimants are using a claim against Vedanta in England purely as a vehicle for attracting English jurisdiction against their real target defendant, KCM, by means of the necessary or proper party gateway.

19. Both these submissions were rejected by the judge, and by the Court of Appeal, but are pursued here, with the requisite permission of this court. Further, the appellants submit that the issue as to abuse of EU law deserves a reference to the Court of Justice.

20.       The claimants’ invocation of English jurisdiction as against KCM depends,

as already noted, upon the necessary or proper party gateway. This forms a long- established part of English private international law which, pursuant to article 6.1 of the Recast Brussels Regulation, is determinative of the jurisdiction of the English courts against a defendant, like KCM, not domiciled in a member state. The necessary or proper party gateway long ante-dates the Civil Procedure Rules but is now enshrined in Part 6 Practice Direction B para 3.1 as follows:

“The claimant may serve a claim form out of the jurisdiction

with the permission of the court under rule 6.36 where -

…

(3) A claim is made against a person (‘the defendant’) on whom the claim form has been or will be

served (otherwise than in reliance on this paragraph) and

-

(a)	there is between the claimant and the

defendant a real issue which it is reasonable for

the court to try; and

(b)	the claimant wishes to serve the claim

form on another person who is a necessary or

proper party to that claim.”

The express terms of the Practice Direction set out only part of what a claimant relying upon the necessary or proper party gateway must show. It is common ground that, by reference to those terms and well-settled authority, the claimant must demonstrate as follows:

i)          that the claims against the anchor defendant involve a real issue to be

tried;
ii)	if so, that it is reasonable for the court to try that issue;

iii) that the foreign defendant is a necessary or proper party to the claims against the anchor defendant;

iv)	that the claims against the foreign defendant have a real prospect of

success;

v) that, either, England is the proper place in which to bring the combined claims or that there is a real risk that the claimants will not obtain substantial justice in the alternative foreign jurisdiction, even if it would otherwise have been the proper place, or the convenient or natural forum.

21. As already noted, the question whether the claims disclose a real triable issue against Vedanta is a main issue on this appeal. It is however accepted that, if the claimants surmount this hurdle, it would be reasonable for the English court to try that issue, and that KCM would be at least a proper party to the claims against Vedanta. It is also (now) common ground that the claims against KCM have a real prospect of success.

22. Both the judge and the Court of Appeal found in the claimants’ favour on real issue and proper place. In addition, they both found that, even if Zambia would otherwise have been the proper place in which to bring the claims, there was a real risk that the claimants would not obtain substantial justice in the Zambian jurisdiction. Those questions remain in issue on this appeal. In the remainder of this judgment, the issues will be addressed in the following order:

i)          Abuse of EU law.

ii)        Real issue as against Vedanta.

iii)       Proper place.

iv)        Substantial justice.

Abuse of EU law

23.       The essence of the appellants’ case under this heading may be summarised

as follows. First, it is an abuse of EU law to use article 4 of the Recast Brussels Regulation as a means of enabling claimants to establish jurisdiction against an

anchor defendant for the collateral purpose of attracting a member state’s

international jurisdiction against foreign defendants, who are the real targets of the claim. It is said that, whereas article 4 is designed to protect defendants domiciled within the EU, this abuse exposes to litigation domiciled parent companies who would not, apart from their status as anchor defendants, otherwise be sued at all.

24.       The judge’s response was to acknowledge that there might be an abuse if the

pursuit of the anchor defendant had been for the sole purpose of attracting jurisdiction as against the foreign defendant, but not otherwise. He found, on the facts, that although the prospect of attracting jurisdiction against KCM was a substantial reason why the claimants sued Vedanta in England, it was not their only reason. They had a bona fide claim, disclosing a real issue for trial, against Vedanta and a desire to obtain judgment against Vedanta rather than merely against KCM, because of a perception, supported by some evidence, that KCM might prove to be of doubtful solvency.

25.       Faced with those findings of fact as to the claimants’ motivation, the

appellants pursue this ground of appeal upon the basis that the judge’s application

of a “sole purpose” test for abuse of EU law was too narrow or, at least, not acte

clair, thereby necessitating a reference to the Court of Justice.

26. For the purposes of analysis, the abuse of EU law claim needs to be approached upon the assumption, but without at this stage deciding, that the claim discloses a real triable issue as against Vedanta. If it does not, then Vedanta falls away as an anchor defendant, and the necessary or proper party gateway, as against

KCM, closes. Furthermore, as will appear, I consider that the judge’s conclusion

that the claim discloses a real triable issue as against Vedanta cannot be overturned
in this court.

27.       Nor can the judge’s conclusion that Vedanta was not sued by the claimants

in England for the sole purpose of attracting English jurisdiction over KCM be challenged on this appeal. His conclusion that Vedanta was sued in England for the genuine purpose of obtaining damages, albeit that attracting English jurisdiction over KCM was an important contributor to that decision, was a finding of fact. Although arrived at by a necessarily summary process which did not permit cross-

examination of the claimants’ witness evidence as to motive, it was well supported

by evidence that the claimants risked finding, after obtaining judgment against

KCM, that it was unable to pay the judgment debt. The judge’s findings of fact on

this issue were endorsed by the Court of Appeal (at para 38 per Simon LJ). They were final findings, in the sense that those factual issues will not be revisited at any later stage in the proceedings. It is contrary to the practice of this court to re-open concurrent factual findings made in both the courts below. To be fair, counsel for each of the appellants made no significant effort to do so.

28.       I therefore approach the legal analysis of this abuse of EU law issue on the

basis that:

a)	the claimants have pleaded a real triable issue against Vedanta;
b)	the claimants genuinely desire to obtain judgment for damages against

Vedanta; but,

c) one of the principal reasons (although not the sole reason) why the claimants sued Vedanta in England was so as to be able, by the use of article 4 and the necessary or proper party gateway in conjunction, to sue KCM in England as well.

29. On that factual basis, I am satisfied, to the extent that the point is acte clair, that the EU principle of abuse of law does not avail the appellants. The starting point is the need to recognise that, following Owusu v Jackson, what is now article 4.1 lays down the primary rule regulating the jurisdiction of each member state to entertain claims against persons domiciled in that state. The Recast Brussels Regulation itself (like its predecessors) contains a number of express provisions which derogate from that primary rule. As exceptions to it, they are all to be narrowly construed. If, therefore, the Recast Brussels Regulation also contains (as it probably does) an implied exception from the otherwise automatic and mandatory effect of article 4, based upon abuse of EU law, then that is also an exception which is to be narrowly construed.

30.       The centrality of article 4, as the basis of member states’ jurisdiction over

their own domiciliaries, is laid down not only in Owusu v Jackson itself, but in a series of later authorities, and fully recognised by academic writers, even those who, prior to Owusu v Jackson, had taken the opposite view where the relevant competition between jurisdictions lay between a member state and a non-member state. Decisions of the Court of Justice which have re-emphasised the centrality of article 4, and the need to construe any exceptions or derogations from it restrictively, include Melzer v MF Global UK Ltd (Case C-228/11) [2013] QB 1112, at paras 23 to 24 of the judgment. Dicta in the English courts to the same effect include, in this court, A v A (Children: Habitual Residence) [2014] AC 1, per Lady Hale at para 31 and, more recently, AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH [2018] AC 439, per Lord Hodge at para 13. Distinguished academics who are (now) of the same view include Professor Adrian Briggs who in Private International Law in English Courts (2014), at para 4.362,

concludes that, since Owusu, “the ship has now sailed” and in Civil Jurisdiction and Judgments, 6th ed (2015), at para 2.304, that “the answer is clear, and debate has moved on”. Of the same view are (now) the editors of Dicey, Morris & Collins on

Conflict of Laws, 15th ed (2012), at para 12-020.

31. There are a small number of cases in the Court of Justice where either the Court or the Advocate General has addressed specifically the question of abuse of law in the context of the Recast Brussels Regulation and its predecessors. They mainly concern the alleged abusive use of article 8.1 (formerly article 6.1) as a means of circumventing article 4 (formerly article 2). Article 8.1 contains provision (in a much more mechanical form than the English forum conveniens doctrine) for a limited departure from article 4, by providing that:

“A person domiciled in a member state may also be sued:

1) Where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from

separate proceedings; …”

It is therefore a limited form of necessary or proper party gateway out of the strictures of article 4. When read with the enabling words of article 5, it gives the claimant a choice to sue an EU domiciled defendant in a member state other than that of its domicile in order to avoid the risk of irreconcilable judgments. It is of no direct relevance in the present case because there is no co-defendant to the claim against Vedanta domiciled in another member state. Since article 8.1 is itself to be restrictively interpreted because it derogates from the primary rule of jurisdiction in article 4, it might be thought that the Court of Justice would liberally apply an abuse of law principle where it perceived that article 8 was being misused as a means of circumventing article 4. Nonetheless the cases show that abuse of EU law has been restrictively interpreted, even in that context.

32. In Freeport plc v Arnoldsson (Case C-98/06) [2008] QB 634 the claimant sought to use article 6.1 of the Judgments Regulation (EC) No 44/2001 (the predecessor of article 8.1) as a means of invoking the jurisdiction of the Swedish courts over a claim against an English company, because a Swedish company was a co-defendant. One of the objections raised by the English defendant was that the claimant was making an abusive use of article 6.1, by joining the Swedish company as a vehicle for that purpose, so as to disable the primary rule (then in article 2) requiring the English company to be sued in England. At para 66 of his opinion, Advocate General Mengozzi said that in order to disapply article 6.1 it would be necessary to show not merely that the claimant had joined the Swedish defendant

for the “sole object of removing one of those defendants from the courts of his own

domicile” but also that it would be necessary to show, not merely fraudulent or

wrongful intent, but “that the action bought against the defendant domiciled in the

forum member state appears to be unfounded … manifestly unfounded in all

respects - to the point of proving to be contrived - or devoid of any real interest for

the claimant”.

33. Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV (Evonik Degussa GmbH intervening) (Case C-352/13) [2015] QB 906 was another case about an alleged abuse of article 6.1 in an international cartel case against defendants domiciled in a number of member states. It was said that the claimants had deliberately delayed settlement of a claim against a German defendant for the purpose of attracting the jurisdiction of the German courts against co-defendants domiciled in other member states, thereby committing an abuse of article 6.1. Advocate General Jääskinen advised, at para 84 of his opinion, that:

“In accordance with the court’s consistent case law, ‘the rule

[on jurisdiction laid down in article 6(1) of the Brussels I Regulation] cannot be interpreted in such a way as to allow a plaintiff to make a claim against a number of defendants for the sole purpose of removing one of them from the jurisdiction of the courts of the member state in which that defendant is

domiciled’ (my emphasis).”

34. In its judgment, the Court of Justice expressly affirmed that opinion in para 27, adding at para 33 that in the context of cartel cases nothing short of collusion between the claimant and the anchor defendant would be sufficient to engage the abuse of law principle.

35. Those decisions of the Court of Justice show that, even before the Freeport case, there was an established line of authority which limited the use of the abuse of EU law principle as a means of circumventing article 6 (now article 8) to cases where the ability to sue a defendant otherwise than in the member state of its domicile was the sole purpose of the joinder of the anchor defendant. Even though there appears to be no authority directly upon abuse of EU law in relation to article 4 itself (or its predecessors), the need to construe any express or implied derogation from article 4 restrictively would appear to make the position a fortiori in relation to article 4, as indeed the judge himself held.

36. But the matter does not stop there. Such jurisprudence as there is about abuse of EU law in relation to jurisdiction suggests that the abuse of law doctrine is limited to the collusive invocation of one EU principle so as improperly to subvert another. In the present case the position is quite different. The complaint is that article 4 is being used as a means of circumventing or misusing the English national regime for the identification of its international jurisdiction over persons not domiciled in any member state: ie the forum conveniens jurisprudence and, specifically, the necessary or proper party gateway.

37.       This complaint forms a central theme in the appellants’ submissions not only

about abuse of EU law, but also about the necessary or proper party gateway itself. It is worth close examination at this stage because, to the extent that it is well founded, it raises the question whether the remedy (if any) for its adverse consequences is to be found in EU law or in the English private international law traditionally called the forum conveniens doctrine.

38. Prior to Owusu v Jackson (although, as is now recognised, illegitimately once the UK had become a member state) the English courts took a two-handed approach to any attempt to use the ability to serve an anchor defendant (domiciled in England) as of right, coupled with invocation of the necessary or proper party gateway as the basis for obtaining permission to serve a foreign defendant out of the jurisdiction in cases where, leaving aside the risk of irreconcilable judgments, the natural forum was the jurisdiction where the foreign defendant was domiciled. With one hand, the court could refuse (or set aside) permission to serve the foreign defendant out of the jurisdiction. With the other hand the court could stay the proceedings against the anchor defendant, in both cases on the basis that the foreign jurisdiction was the

forum conveniens (or using the CPR English equivalent, the “proper place”) for the

conduct of the litigation as a whole. By dealing with the claims against both defendants, the English court thereby neatly avoided the risk of irreconcilable judgments or multiplicity of proceedings.

39. Following Owusu v Jackson the English court has one hand tied behind its back. No more can it stay the proceedings against the anchor defendant on forum conveniens grounds. This is the precise ratio of Owusu v Jackson, and the Court of Justice was fully aware of the difficulties which that conclusion would be likely to

cause in the traditional exercise of the English court’s forum conveniens

jurisprudence in such cases. The result is, in a case (such as the present) where the English court is persuaded that, whatever happens to the claim against the foreign defendant, the claimants will in fact continue in England against the anchor defendant, the risk of irreconcilable judgments becomes a formidable, often insuperable, obstacle to the identification of any jurisdiction other than England as

the forum conveniens. Thus not only is one of the court’s hands tied behind its back,

but the other is, in many cases, effectively paralysed. In the context of group litigation about environmental harm, the appellants say that it has the almost inevitable effect that, providing a minimum level of triable issue can be identified against an English incorporated parent, then litigation about environmental harm all around the world can be carried on in England, wherever the immediate cause of the

damage arises from the operations of one of that group’s overseas subsidiaries.

40. Two consequences flow from that analysis. The first is that, leaving aside those cases where the claimant has no genuine intention to seek a remedy against the anchor defendant, the fact that article 4 fetters and paralyses the English forum conveniens jurisprudence in this way in a necessary or proper party case cannot itself be said to be an abuse of EU law, in a context where those difficulties were expressly recognised by the Court of Justice when providing that forum conveniens arguments could not be used by way of derogation from what is now article 4. The second is that to allow those very real concerns to serve as the basis for an assertion of abuse of EU law would be to erect a forum conveniens argument as the basis for a derogation from article 4, which is the very thing that the Court of Justice held in Owusu v Jackson to be impermissible. In my view, if there is a remedy for this undoubted problem, it lies in an appropriate adjustment of the English forum conveniens jurisprudence, not so as to permit the English court to stay the proceedings against the anchor defendant, if genuinely pursued for a real remedy, but rather to temper the rigour of the need to avoid irreconcilable judgments which has, thus far, served to disable the English court from concluding that any jurisdiction other than its own is the forum conveniens or proper place for the litigation of the claim against the foreign defendant. As will appear, I consider that there is a solution to this difficulty along those lines, where the anchor defendant is prepared to submit to the jurisdiction of the domicile of the foreign defendant in a case where, as here, the foreign jurisdiction would plainly be the proper place, leaving aside the risk of irreconcilable judgments.

41. For those reasons I would resolve the abuse of EU law issue in favour of the claimants, without any need for a reference to the Court of Justice.

Real issue to be tried as against Vedanta

42. The single task of the judge under this heading was to decide whether the claim against Vedanta could be disposed of, and rejected, summarily, without the need for a trial. This is because, although Vedanta made no reverse summary judgment application of its own, the assertion by a foreign defendant seeking to set aside permission to serve outside the jurisdiction under the necessary or proper party gateway that the claim against the anchor defendant discloses no real issue to be tried involves, as is now agreed, a summary judgment test: see Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804, per Lord Collins of Mapesbury at para 82. That was a case about the civil procedure rules of the Isle of Man but the Judicial Committee of the Privy Council treated those provisions as in substance no different in their effect from those in the English Civil Procedure Rules: see para 67.

43. Summary judgment disputes arise typically, and real triable issue jurisdiction disputes arise invariably, at a very early stage in the proceedings. In the context of a

jurisdiction challenge the court will, typically, have only the claimant’s pleadings.

Proportionality effectively prohibits cross-examination and neither party will have

had the benefit of disclosure of the opposing party’s documents, albeit that in

exceptional circumstances a direction for limited specific disclosure may be given: see Rome v Punjab National Bank (No 1) [1989] 2 All ER 136, per Hirst J, para 141 and Flatela Vava v Anglo American South Africa Ltd [2012] EWHC 1969 (QB). No order for limited disclosure was sought or made in the present case.

44.       The extent to which the absence of disclosure of defendants’ documents may

impede claimants in demonstrating a triable issue depends of course upon what are said to be the defects in its case. In the present case the critical question is whether Vedanta sufficiently intervened in the management of the Mine owned by its subsidiary KCM to have incurred, itself (rather than by vicarious liability), a

common law duty of care to the claimants or, (on the claimants’ expert evidence), a

fault-based liability under the Zambian environmental, mining and public health legislation in connection with the escapes of toxic materials from the Mine alleged to have caused the relevant harm. The level of intervention in the management of the Mine requisite to give rise to a duty of care upon Vedanta to persons living, farming and working in the vicinity is (as is agreed) a matter of Zambian law, but the question whether that level of intervention occurred in the present case is a pure question of fact. I make no apology for having suggested during argument that it is blindingly obvious that the proof of that particular pudding would depend heavily upon the contents of documents internal to each of the defendant companies, and upon correspondence and other documents passing between them, currently unavailable to the claimants, but in due course disclosable.

45. This poses a familiar dilemma for judges dealing with applications for summary judgment. On the one hand, the claimant cannot simply say, like Mr Micawber, that some gaping hole in its case may be remedied by something which may turn up on disclosure. The claimant must demonstrate that it has a case which is unsuitable to be determined adversely to it without a trial. On the other, the court cannot ignore reasonable grounds which may be disclosed at the summary judgment stage for believing that a fuller investigation of the facts may add to or alter the evidence relevant to the issue: see Tesco Stores Ltd v Mastercard Inc [2015] EWHC 1145, per Asplin J at para 73.

46. The main thrust of the appellants’ case under this heading was that a conclusion that Vedanta had incurred a duty of care to the claimants would involve a novel and controversial extension of the boundaries of the tort of negligence, beyond any established category, calling for a cautious incremental approach by analogy with established categories, which therefore required a detailed

investigation of the claimants’ case, which neither the judge nor the Court of Appeal

carried out.

47. It was submitted therefore that this court needed to carry out that detailed analysis. For that purpose Mr Charles Gibson QC for KCM undertook, mainly in

writing, a thorough review of the appellants’ published documents describing their

relationship, and Mr Richard Hermer QC for the claimants responded in kind, albeit to some extent under protest that this was not an exercise which this court ought to undertake.

48. It might be thought that an assertion that the claim against Vedanta raised a novel and controversial issue in the common law of negligence made it inherently unsuitable for summary determination. It is well settled that difficult issues of law of that kind are best resolved once all the facts have been ascertained at a trial, rather than upon the necessarily abbreviated and hypothetical basis of pleadings or assumed facts.

49.       The appellants’ submission that this case involves the assertion of a new

category of common law negligence liability arises from the fact that, although the claimants chose to plead their case by seeking to fit its alleged facts within a series of four indicia given by the Court of Appeal in Chandler v Cape plc [2012] 1 WLR 3111, it was submitted that this was by no means a Chandler type of case. It may, like the claim in the Chandler case, loosely be categorised as a claim that a parent company has incurred a common law duty of care to persons (in this case neighbours rather than employees) harmed by the activities of one of its subsidiaries. But the liability of parent companies in relation to the activities of their subsidiaries is not, of itself, a distinct category of liability in common law negligence. Direct or indirect ownership by one company of all or a majority of the shares of another company (which is the irreducible essence of a parent/subsidiary relationship) may enable the parent to take control of the management of the operations of the business or of land owned by the subsidiary, but it does not impose any duty upon the parent to do so, whether owed to the subsidiary or, a fortiori, to anyone else. Everything depends on the extent to which, and the way in which, the parent availed itself of the opportunity to take over, intervene in, control, supervise or advise the management of the relevant operations (including land use) of the subsidiary. All that the existence of a parent subsidiary relationship demonstrates is that the parent had such an opportunity.

50. Mr Gibson and Mr Hermer were eventually ad idem in commending to the

court the pithy and in my view correct summary of this point by Sales LJ in AAA v
Unilever plc [2018] EWCA Civ 1532, para 36:

“There is no special doctrine in the law of tort of legal

responsibility on the part of a parent company in relation to the activities of its subsidiary, vis-à-vis persons affected by those activities. Parent and subsidiary are separate legal persons, each with responsibility for their own separate activities. 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 of care on the part of the parent in favour of a claimant are satisfied in the particular case. The legal principles are the same as would apply in relation to the question whether any third party (such as a consultant giving advice to the subsidiary) was subject to a duty of care in tort owed to a claimant dealing with the subsidiary. Helpful guidance as to relevant considerations was given in Chandler v Cape plc; but that case did not lay down a separate test, distinct from general principle, for the imposition of a duty of care in relation to a parent

company.”

He continued, at para 37:

“Although the legal principles are the same, it may be that on

the facts of a particular case a parent company, having greater scope to intervene in the affairs of its subsidiary than another third party might have, has taken action of a kind which is capable of meeting the relevant test for imposition of a duty of

care in respect of the parent.”

He proceeded then to provide typical examples, which included this case, which had already by then been decided by the Court of Appeal.

51. Sales LJ thought that cases where the parent might incur a duty of care to third parties harmed by the activities of the subsidiary would usually fall into two basic types: (i) Where the parent has in substance taken over the management of the

relevant activity of the subsidiary in place of or jointly with the subsidiary’s own

management; (ii) Where the parent has given relevant advice to the subsidiary about how it should manage a particular risk. For my part, I would be reluctant to seek to

shoehorn all cases of the parent’s liability into specific categories of that kind,

helpful though they will no doubt often be for the purposes of analysis. There is no limit to the models of management and control which may be put in place within a multinational group of companies. At one end, the parent may be no more than a passive investor in separate businesses carried out by its various direct and indirect subsidiaries. At the other extreme, the parent may carry out a thoroughgoing vertical

reorganisation of the group’s businesses so that they are, in management terms,

carried on as if they were a single commercial undertaking, with boundaries of legal personality and ownership within the group becoming irrelevant, until the onset of insolvency, as happened within the Lehman Brothers group.

52. Mr Gibson sought to extract from the Unilever case and from HRH Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2018] EWCA Civ 191; [2018] Bus LR 1022, a general principle that a parent could never incur a duty of care in respect of the activities of a particular subsidiary merely by laying down group-wide policies and guidelines, and expecting the management of each subsidiary to comply with them. This is, he submitted, all that the evidence thus far deployed in the present case demonstrated about the Vedanta Group. Again, I am not persuaded that there is any such reliable limiting principle. Group guidelines about minimising the environmental impact of inherently dangerous activities, such as mining, may be shown to contain systemic errors which, when implemented as of course by a particular subsidiary, then cause harm to third parties. In the Chandler case, the subsidiary inherited (by taking over a business formerly carried on by the parent) a system for the manufacture of asbestos which created an inherently unsafe system of work for its employees, because it was carried on in factory buildings with open sides, from which harmful asbestos dust could, and did, escape. As a result, and after a full trial, the parent was found to have incurred a duty of care to the employees of its subsidiary, and the result would surely have been the same if the dust had escaped to neighbouring land where third parties worked, lived or enjoyed recreation. It is

difficult to see why the parent’s responsibility would have been diminished if the

unsafe system of work, namely the manufacture of asbestos in open-sided factories, had formed part of a group-wide policy and had been applied by asbestos manufacturing subsidiaries around the world.

53. Even where group-wide policies do not of themselves give rise to such a duty of care to third parties, they may do so if the parent does not merely proclaim them, but takes active steps, by training, supervision and enforcement, to see that they are implemented by relevant subsidiaries. Similarly, it seems to me that the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken.

54. Once it is recognised that, for these purposes, there is nothing special or conclusive about the bare parent/subsidiary relationship, it is apparent that the general principles which determine whether A owes a duty of care to C in respect of the harmful activities of B are not novel at all. They may easily be traced back as far as the decision of the House of Lords in Dorset Yacht Co Ltd v Home Office [1970] AC 1004, in which the negligent discharge by the Home Office of its responsibility to supervise Borstal boys working on Brownsea Island in Poole Harbour led to seven of them escaping and causing serious damage to moored yachts in the vicinity, including one owned by the plaintiff.

55. The essence of the claimants’ case against Vedanta is that it exercised a sufficiently high level of supervision and control of the activities at the Mine, with sufficient knowledge of the propensity of those activities to cause toxic escapes into surrounding watercourses, as to incur a duty of care to the claimants. In the lengthy Particulars of Claim (in which this allegation of duty of care, together with its particulars, occupied 13 pages) the claimants make copious reference, including quoted highlights, to material published by Vedanta in which it asserted its responsibility for the establishment of appropriate group-wide environmental control and sustainability standards, for their implementation throughout the group by training, and for their monitoring and enforcement. The claimants have exhibited the underlying published materials to witness statements, and relied, in addition, upon a management services agreement between Vedanta and KCM and a witness statement of a Mr Kakengela, a middle manager of KCM who gave evidence about changes in the mode of management of the Mine after KCM became part of the Vedanta Group.

56.       The judge’s approach to this issue may be summarised as follows. First, he

accepted that it was arguable that the Zambian courts would identify the relevant principles of Zambian common law in accordance with those established in England. It is now common ground that he was entitled on the evidence to do so. Secondly, he accepted the invitation of counsel on both sides to treat Caparo Industries plc v Dickman [1990] 2 AC 605, and its three ingredients of foreseeability, proximity and reasonableness, as the starting point. This assumed, contrary to my view, that he was dealing with a novel category of common law negligence liability, but he can hardly

be criticised for having done so in the light of the parties’ joint invitation. Thirdly he was guided by the claimants’ own pleaded case to focus upon the question

whether the indicia in the Chandler case were satisfied. In my view, and that of the Court of Appeal in this case, the Chandler indicia are no more than particular examples of circumstances in which a duty of care may affect a parent. They were so described by Arden LJ when setting them out in the Chandler case. Although this if anything imposed an unnecessary straitjacket, both upon the claimants and the judge, it did not lead to the identification of a wider basis in law for the recognition of the relevant parental duty of care than that which, in my view, the law actually provides, by reference to basic principle.

57. Next, the judge reminded himself, correctly in my view, that the answer to the question whether Vedanta incurred a duty of care to the claimants was likely to depend upon a careful examination of materials produced only on disclosure, and in particular upon documents held by Vedanta: see para 118. He cautioned himself against embarking on any sort of mini-trial. At para 119 he said this:

“In the light of that view, it is unnecessary for me to identify in

any detail the evidence [on] which the claimants rely in support of their case that Vedanta, as the parent company, owed a

relevant duty of care.”

58.       He then identified in four short sub-paragraphs the particular material which

supported his view that the claimants’ case was arguable. They included part of the

published material, namely a report entitled “Embedding Sustainability” which, he said, stressed that the oversight of all Vedanta’s subsidiaries rested with the board

of Vedanta itself, made particular reference to problems with discharges into water and to the particular problems arising at the Mine. He relied upon the management services agreement between Vedanta and KCM to which I have referred, upon a decision of the Irish High Court about the group (Elmes v Vedanta Lisheen Mining Ltd [2014] IEHC 73) and upon the witness statement of Mr Kakengela. He concluded by recognising the need for a cautious approach to the relevant evidence

filed by KCM’s principal witness Mr Ndulo, whose credibility he said had been

subject to serious adverse comment (including a finding of dishonesty) by a Commercial Court judge in an earlier case: see U & M Mining Zambia Ltd v Konkola Copper Mines plc (No 3) [2014] EWHC 3250 (Comm).

59. For its part the Court of Appeal followed a broadly similar course, while reminding itself that the Chandler indicia were no more than examples, and making a slightly different selection from the voluminous evidence of those parts of

Vedanta’s published statements indicative at least of an arguable case for having

undertaken a sufficiently close intervention into the operation of the Mine to attract
the requisite duty of care.

60.       In my view the appellants’ primary submission under this heading, that the

judge and the Court of Appeal failed to apply sufficient rigour to their analysis of the claimants’ pleadings and evidence on this question, fails in limine. This was not

a case of the assertion, for the first time, of a novel and controversial new category of case for the recognition of a common law duty of care, and it therefore required no added level of rigorous analysis beyond that appropriate to any summary

judgment application in a relatively complex case. Nor does the judge’s judgment

disclose any lack of appropriate rigour. The question as to triable issue as against Vedanta was one of a significantly larger number of contentious issues than those which have survived in this court. The reason which the judge gave for the relative brevity of his analysis of the underlying materials in para 119 of his judgment said nothing about the depth and rigour of his own review of those materials. He was merely seeking to explain why, in what was necessarily a long and detailed judgment, having formed a clear view that the case against Vedanta was arguable, it was unnecessary to burden his judgment with a lengthy and detailed description of his own analysis. For the reasons I have already given, his legal analysis may have departed slightly from the ideal, but only in respects in which either he

followed the parties’ joint invitation, or by imposing a straitjacket derived from the

Chandler case which, if anything, increased rather than reduced the claimants’

burden in demonstrating a triable issue. But in that respect those imperfections were largely cleared up by the Court of Appeal which, rightly in my view, recognised that

they did not undermine the judge’s conclusion.

61. This court has, again, been taken at length through the relevant underlying materials. For my part, if conducting the analysis afresh, I might have been less persuaded than were either the judge or the Court of Appeal by the management services agreement between the appellants, or by the evidence of Mr Kakengela. But I regard the published materials in which Vedanta may fairly be said to have asserted its own assumption of responsibility for the maintenance of proper standards of environmental control over the activities of its subsidiaries, and in particular the operations at the Mine, and not merely to have laid down but also implemented those standards by training, monitoring and enforcement, as sufficient on their own to show that it is well arguable that a sufficient level of intervention by Vedanta in the conduct of operations at the Mine may be demonstrable at trial, after full disclosure of the relevant internal documents of Vedanta and KCM, and of communications passing between them.

62. It matters not whether this court would have reached the same view as did the judge about triable issue. It is sufficient that, for the reasons which I have given, there was material upon which the judge could properly do so, and that his assessment was not vitiated by any error of law.

Breach of statutory duty by Vedanta

63. The claimants plead that, regardless whether Vedanta owed any common law duty of care to them, its intervention in the operation of the Mine caused it to commit breaches of duties imposed by Zambian statutes, even though KCM was the sole licensed operator of the Mine. They are the Mines and Minerals Development Act 2008, the Environmental Management Act 2011 and the Environmental Protection and Pollution Control Act 1990. Generally speaking they impose strict liability on

KCM but, according to the opinion of the claimants’ Zambian law expert, they also

impose a fault-based liability on a wider range of persons. For example, section 4 of

the Environmental Management Act 2011 enables the court to compel “the person responsible for any environmental degradation” to restore the environment to its

101.     The result is that the appellants fail on this issue of substantial justice.

Conclusion

102.     Having rejected the appellants’ case on abuse of EU law and real triable issue,

but having upheld their case on proper place, I would, but for their failure on the issue as to substantial justice, have been minded to allow their appeal. As it is however I consider that this appeal should be dismissed, on the substantial justice issue.