The case of His Royal Highness Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2017] EWHC 89 (TCC) concerned the liability under English law of an English anchor holding company for claims made against a local (Nigerian) subsidiary.

The case concerned jurisdictional challenges by the two defendants, UK registered Royal Dutch Shell plc (RDS) (the ultimate holding company of the Shell Group), and its indirect Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd (SPDC).  Two sets of claimants, each set representing thousands of Nigerian citizens, had filed claims in the English courts for damages relating to serious ongoing pollution and environmental damage in the Niger Delta region from oil spills from SPDC's oil pipelines and other operating facilities.  The English courts could only hear the claim against SPDC if the claimants had a claim against RDS which would "anchor" claims against SPDC (made under Nigerian law) in the English courts.  The key question on which this case turned was whether RDS owed a duty of care to the Nigerian claimants under common law. 

While the Court held in principle that a parent company may owe a duty of care to third parties for the acts of its subsidiary, this was not the case here for reasons including that:

  • RDS did not have any operations in Nigeria
  • RDS was not better placed than SPDC to prevent the relevant harm and SPDC had not relied on it to do so
  • RDS did not directly hold shares in SPDC
  • RDS "merely hold[s] the shares in its subsidiaries as if it were an investment holding company".

Both defendants were therefore successful in their jurisdictional challenges, meaning that the Court would either dismiss the claims, or assume jurisdiction and strike the claims out. 

This decision can be contrasted to the recent judgment of Coulson J in the Vedanta decision (Lungowe and others v (1) Vedanta Resources plc (2) Konkola Copper Mines plc [2016] EWHC 292 (TCC)).  Here, an anchor defendant was liable for claims made against a local (Zambian) subsidiary.  There were two key factual differences between the cases that can be said to account for the different results.  First, the companies in Vedanta were more closely related than the companies were in this case.  Secondly, claims in Vedanta could not be brought under local (Zambian) law, whilst in Shell's case the claims could be pursued in Nigeria. 

These decisions illustrate the increasing reach of international corporate responsibility law in the English courts.

See the Court's decision here.