Putting jurisdiction in its 'proper place'

In a much anticipated judgment (Lungowe and Ors v Vedanta Resource Plc and Konkola Copper Mines Plc ("Vedanta") [1]) the Supreme Court has confirmed that a group of over 1,800 Zambian villagers have succeeded in establishing jurisdiction in England to try their claims for environmental damage.

Lungowe and Ors v Vedanta Resource Plc and Konkola Copper Mines Plc

The Claimants are a group of Zambian citizens, from rural communities living around the Nchanga Copper Mine (the "Mine") in the Chingola District of Zambia. They pleaded claims in negligence against both the immediate owner of the Mine (Konkola Copper Mines plc, "KCM", a public company incorporated in Zambia) and the parent company of KCM (Vedanta Resources plc "VR", a public company domiciled and incorporated in England). They claim that both KCM and VR failed to take reasonable care to prevent them suffering damage to their health and agricultural livelihoods as a result of the emission of toxic matter into the waterways on which they depended to provide drinking water for themselves and their livestock and for irrigation.

The appeal, which upheld the Court of Appeal decision, concerned only whether permission had correctly been given for service out of the jurisdiction on KCM under the rules of court (CPR r.6.36). The issues for the Supreme Court were:

• Is there a real issue between the claimants and the English parent company (in this case, VR)? This is effectively the test for striking out a claim (CPR r.3.4) in reverse.
• Is the foreign subsidiary (in this case KCM) a necessary or a proper party to the claims against VR?
• If so, does the claim against KCM have real prospects of success? This is not a high threshold and requires simply that its chances of success are more than 'fanciful'.
• Are the Courts of England & Wales the proper place to resolve the claim against KCM (in substance the common law concept of forum conveniens)?

The Supreme Court focused on the first and fourth bullets. The judgment of the Supreme Court (which was delivered by Lord Briggs, with whom all other members of the Supreme Court agreed) has the following points of important practical impact for multinationals.

[1] {2019} UKSC 20.

[2] {1990} 2 AC 605.

[3] {2019} UKSC 20, [49] and [54].

[4] {2019} UKSC 20, [59].

[5] {2019} UKSC 20, [49].

[6] {2019} UKSC 20, [53].

[7] This point arises from article 4 of the recast Brussels Regulation. It remains to be seen precisely what regime will replace that instrument as a matter of English law when the UK leaves the EU and the extent to which this point will remain thereafter.

[8] {2019} UKSC 20, [79].

[9] The fact that substantial justice may not be available in the alternative forum is a potentially significant caveat, which on the facts of this case the Supreme Court agreed with Coulson J was engaged because there were "access to justice" issues in Zambia arising from the absence of tenable funding options and of suitably resourced and experienced legal advisors to pursue litigation of this scale and complexity.

[10] This had been touched on by the Court of Appeal in Shell, see [2018] EWCA Civ 191, [10] – [22] per Simon LJ.

[11] {2019} UKSC 20, [43 - 45], [48] and [60].