By Libby George and Tife Owolabi
(Reuters) – The Court of Appeal in London ruled on Wednesday that two Nigerian communities cannot pursue Royal Dutch Shell in English courts over oil spills in Nigeria’s Delta region.
The split decision upheld a High Court ruling last year that was a setback to attempts to hold British multinationals liable at home for their subsidiaries’ actions abroad.
The court rejected the appeal from law firm Leigh Day on behalf of Nigeria’s Bille and Ogale communities, and upheld a ruling that English courts do not have jurisdiction over claims against Shell’s Nigerian subsidiary Shell Petroleum Development Company (SPDC).
SPDC is jointly operated with the Nigerian government.
Shell said the court “rightly upheld” the earlier ruling, and said Nigeria’s “well-developed justice system” was the correct place for the claims. Its subsidiary SPDC has also denied responsibility for the spills, which it says were due to sabotage and illegal refining.
One of the three senior High Court judges, the Rt. Hon. Lord Justice Sales, disagreed with the majority ruling, writing that the communities have “a good arguable claim that (Shell) assumed a material degree of responsibility in relation to the management of the pipeline and facilities” operated by SPDC.
Leigh Day said the two Nigerian communities intended to bring the case to Britain’s Supreme Court.
“We are hopeful that the Supreme Court will grant permission to appeal and will come to a different view,” Leigh Day partner Daniel Leader said.
King Okpabi, the ruler of the Ogale community, said the English courts were the only hope, and that they “cannot get justice” in Nigeria.
The case is significant in determining whether multinational companies can face legal action in England over their subsidiaries’ actions abroad.
Last year, an appeals court upheld a ruling that a case brought by Zambian villagers against mining company Vedanta Resources over environmental pollution could be heard in England. Vedanta said it would seek the right to appeal to the Supreme Court.
(Reporting by Libby George; Editing by Edmund Blair and David Evans)