Parent Company Liability

Parent Company Liability Presented by: Mrs. Samkalden and Mrs. Date: 17 January, 2023 The Legal Landscape Of Parent Company Liability - Jurisdiction → Brussels I recast / DCCP - Applicable law → Rome II Regulation / DCC • Lex fori → Dutch (procedural) law  Civil procedure (DCCP)  Admissibility (representative action Milieudefensie)  Disclosure / access to evidence • Lex causae → Dutch or foreign law  liability  Right of action  Burden of proof  Time limitations Shell Nigeria Case – Overview - Started in 2008 - First parent company liability case - District Court judgment in 2013; Court of Appeal judgment in 2021 - Parties: • Claimants: 4 individual Nigerian claimants & Milieudefensie (FoE The Netherlands) on behalf of all other local victims of 3 oil spills in the Niger Delta (representative action) • Defendants: Dutch parent company + previous parent companies & Nigerian subsidiary - Claims: • Declaration of law on liability // compensation for individual farmers • - - - Injunction for precautionary measures and remediation Jurisdiction: DCCP (similar to Article 8 (1) Brussels I regulatio) • Shell defence: no arguable claim • Abuse of law? Applicable law: • Rome II N/A → no choice of law • Nigerian law/ (English) common law on parent company liability • Shell: Dutch court should not make 'new' foreign law Standing: • Combination of Dutch and Nigerian/common law • Shell argued inadmissibility of the respresentative action by Friends of the Earth & no right of claim for individual plaintiffs - - Disclosure: • Burden of proof = on claimants • No access to technical data • No discovery in Dutch legal procedure • Petition for disclosure denied by District court, granted by Court of Appeal (Expert) evidence • Lack of (access to) technical data, facts • Local expert research according to Shall impossible for safety reasons • Time lapse Shell Nigeria Case: Duty Of Care - Vedanta judgment UKSC - Narrow interpretation by the Court of Appeal The Hague, taking aspects not only from Vedanta but also adding Chandler & Caparo - - Key criteria: • Knowledge • Control/ involvement CoA The Hague: • RDS was aware of the lack of a leak detection system (LDS) since 2005 • At least since 2010 RDS was involved with the question as to whether or not pipelines in Nigeria should have an LDS. • RDS should use it's position as shareholder & factual influence Shell Climate Case – Overview - Started in 2019. District court judgment in May 2020 - Parties: • Claimants: Milieudefensie (FoE The Netherlands) + 6 Dutch NGO's and more than 17.000 individual plaintiffs • - Defendant: Royal Dutch Shell Claims: • Declaration of law • Injunction to reduce emissions Shell Climate Case: Procedural Issues - Jurisdiction: • - Article 4 Brussels 1-recast → RDS established in the Netherlands Standing: • No standing as regards the interests of the current and future generations of the 'entire world population' → restricted to the Netherlands • Interests of current and future generations of Dutch residents and inhabitants of the Wadden Sea • - Insufficiently concrete individual interest for individual claimants Applicable law: • Article 7 Rome II: choice of law in environmental cases • FOE: damage caused by parent company policies & decisions • → Dutch law applied Shell Climate Case: Duty Of Care - Article 6:162 DCC: acting in conflict with what is generally accepted according to unwritten law = unlawful (due care principle) - Relevant factors to determine 'acceptable behaviors' include: • (Contribution to) eminent danger; • Likelihood / seriousness of harm; • Fundamental rights • UN Guiding Principles → avoid causing or contributing to harm (→ scope 3 emissions) - • Position & influence of RDS; • Proportionality and effectiveness of an obligation to reduce omissions Parties agreed on the need to reduce emissions to prevent climate change disagreement only on the role of Shell - Injunction granted, insufficient interest in declaratory decision