Case - United Kingdom - Lungowe v Vedanta

Lungowe v Vedanta

Summary of facts

The claims were originally brought by 1,826 people from Chingola in Zambia against Konkola Cooper Mines Plc (“KCM”) and its ultimate parent company Vedanta Resources Plc (“Vedanta”). This number increased to more than 2,500 people, including over 600 children, by the end of the proceedings. The claimants wanted compensation for the damage to their health and farming caused by the release of toxic matter into their only source of drinking water from the Nchanga Cooper Mine since 2005.

The claimants alleged negligence and breach of statutory duty by KCM through its operation of the mine and by Vedanta due to its “very high level of control” over the mining operations and its compliance with relevant health, safety and environmental regulations.

After a series of court cases, the case ended in an out-of-court settlement without any admission of liability in 2021.

Timeline

2021 Court of Appeal (Civil Division)

Jurisdiction

Applicable Law

Zambian common law, which is considered virtually the same as English common law for this case.

Legal issues

Whether the English courts have jurisdiction for Vedanta based on the forum non conveniens principle or because there has been an abuse of EU law.
Whether the English courts have jurisdiction for KCM based on the same five issues addressed in the High Court:
- (1) The claim against KCM needs to have a real prospect of success.
- (2) There needs to be a real issue to be tried between the claimants and Vedanta (as Vedanta is the anchor defendant enabling KCM to be sued in the UK). Is it arguable that a duty of care exists for Vedanta?
- (3) It must be reasonable for the court to try the issue.
- (4) KCM needs to be a necessary and proper party to the claim against Vedanta.
- (5) England needs to be the proper place to bring the claim.

Ruling / Outcome

The Court of Appeal agreed with the High Court judge on all grounds and dismissed the appeal by Vedanta and KCM.

2019 Supreme Court

Jurisdiction

Applicable Law

Zambian common law, which is considered virtually the same as English common law for this case.

Legal issues

Jurisdiction: Whether the case should be allowed to proceed in English courts. The grounds of appeal were reduced to four main issues:

For Vedanta’s appeal: whether there has been an abuse of EU law.
For KCM’s appeal:
- (1) whether there is a real issue to be tried between the claimants and Vedanta – whether it is arguable that a duty of care exists for Vedanta. KCM can only be sued in the UK if Vedanta is a party to the case as an anchor defendant.
- (2) whether England is the proper place to bring the claim.
- (3) whether there is a real risk that substantial justice cannot be obtained in Zambia if England is not the proper place for the claim.

Ruling / Outcome

The Supreme Court rejected Vedanta’s appeal.

There was no abuse of EU law [41].

The Supreme Court rejected KCM’s appeal.

(1) There was a real issue to be tried – it is arguable that Vedanta incurred a common law duty of care. In doing so, the Supreme Court established the following important principles:
- This is not a new distinct category of liability in negligence [49]
- It depends on the extent to which the parent takes over, intervenes in, controls, supervises or advises the management of the subsidiary’s relevant activities [49].
- There is no limit to models of management and control in multinational groups and not all cases of parent liability can be put into specific categories [51].
- Group-wide policies can create a duty of care by themselves but also through the parent taking active steps, training, supervision and enforcement of them. Relevant responsibility may also be incurred where the parent claims to have supervision and control of it subsidiary even where this if factually not true [52]-[53].
(2) England was not the proper place in which to bring the claim [87]. In doing so, the Court overturned the reasoning of the Court of Appeal.
(3) The Court agreed with the lower courts in saying that English courts still have jurisdiction over the claim because there is a real risk that substantial justice cannot be obtained for the claimants in Zambia [101].

Effect: The claims against both Vedanta and KMC can proceed in the English High Court.

Wider implications: the Vedanta judgment was a landmark case by confirming that it is possible for a parent company to have a duty of care towards third parties affected by its subsidiary.

2016 High Court of Justice: Technology and Construction Court

Jurisdiction

Applicable Law

Zambian common law, which is considered virtually the same as English common law for this case.

Legal issues

Tort of negligence: Claimants alleged that the mine operated by KCM negligently released toxic matter causing personal injury, property damage and loss of income, amenity and enjoyment of land.
Tort of negligence: Claimants alleged that Vedanta owed a duty of care towards the local population through the high level of control it exercised over KCM’s operations and its compliance with the relevant health, safety and environmental regulation. They allege that this duty was breached.
Jurisdiction challenge by Vedanta: The case should be thrown out either on forum non conveniens grounds or because there was an abuse of EU law because the sole purpose of suing Vedanta is to bring KCM before an English court.
Jurisdiction challenge by KCM. The following issues need to be addressed:
- (1) The claim against KCM needs to have a real prospect of success.
- (2) there needs to be a real issue to be tried between the claimants and Vedanta (as Vedanta is the anchor defendant enabling KCM to be sued in the UK). Is it arguable that a duty of care exists for Vedanta?
- (3) it must be reasonably for the court to try the issue.
- (4) KCM needs to be a necessary and proper party to the claim against Vedanta.
- (5) England needs to be the proper place to bring the claim.

Ruling / Outcome

The Court ruled against Vedanta’s application to dismiss.

Following the ECJ judgment in Owusu v Jackson, forum non conveniens cannot be used as an exception to the Recast Brussels Regulation. Accordingly, the court has jurisdiction because one of the defendants is domiciled in the UK.
There is no abuse of EU law. The defendant failed to demonstrate that the sole purpose of suing Vedanta was to use it as an anchor defendant to be able to bring KCM before an English court.

The Court ruled against KCM’s application to dismiss.

(1) The claim against KCM has real prospects of success.
(2) There is a real issue to be tried between the claimants and Vedanta – it is arguable that Vedanta has a duty of care under English law and with that under Zambian law
(3) It is reasonable for the court to try that issue and KCM is a necessary and proper party to the claim.
(4) England would not be the proper place to bring the claim against KCM if it was standalone. However, due to its connection to the Vedanta case, it is the proper place.
(5) The claimants would not obtain access to justice in Zambia giving the Court discretion to take the case.

Court case