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  • Writer's pictureRobert Spicer

Okpabi and others v Royal Dutch Shell plc [2021] UKSC 3

The appeal to the Supreme Court concerned claims by 40,000 claimants in Nigeria. They alleged that they had suffered damage resulting from oil spills from infrastructure operated by the Shell Petroleum Development Company of Nigeria Ltd (SPDC). The spills caused widespread environmental damage including serious water and ground contamination. This is a Nigerian company which is a subsidiary of Royal Dutch Shell (RDS), a company domiciled in England. On behalf of the claimants it was argued that both companies were liable in negligence. Proceedings were served on RDS. The claimants obtained permission to serve SPDC but this was overturned by the High Court. The High Court found that the claims had no real prospect of success. The claimants’ appeal to the Court of Appeal was dismissed for the same reason. The Court of Appeal stated that the conditions for granting permission to serve the claim on SPDC as a necessary or proper party to the claims against RDS had not been made out. The claimants appealed to the Supreme Court. The Supreme Court allowed the appeal and made the following points: · When dealing with jurisdictional issues related to whether there was a triable claim, the focus should be on the particulars of claim or witness statements and whether the cause of action had a real chance of success. In this case, documents amounted to more than 2000 pages of evidential material. · RDS had a high degree of control over SPDC’s pollution and environmental compliance and the operation of its oil infrastructure. It was therefore reasonably arguable that RDS owed a duty of care to the claimants. · There was no special test for the circumstances in which a parent company owes a duty of care in relation to the activities of a subsidiary. These circumstances may include where the parent company takes over the management of activities or takes steps to implement group-wide policies. · Proof of the nature and extent of the involvement of RDS in the activities of SPDC depended largely on disclosure of documents. · There were real issues to be tried. This conclusion was supported by witness evidence. · The Shell group’s vertical structure, with organisational approval preceding corporate approval, allowed for delegation of authority. This included operational safety and environmental responsibility. The way in which this organisational structure worked in practice, and the extent to which authority was delegated, raised triable issues.

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