Dominic Liswaniso Lungowe & Others v (1) Vedanta Resources Plc (First Defendant) (2) Konkola Copper Mines Plc (Second Defendant)
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 27 May 2016 |
| Neutral Citation | [2016] EWHC 975 (TCC) |
| Docket Number | Case No: HT-2015-000292 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 27 May 2016 |
[2016] EWHC 975 (TCC)
The Hon Mr Justice Coulson
Case No: HT-2015-000292
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, Fetter Lane,
London, EC4A 1NL
Richard Hermer QC, Marie Louise Kinsler and Edward Craven (instructed by Leigh Day) for the Claimants
Charles Gibson QC, Professor Sir Alan Dashwood QC and Geraint Webb QC (instructed by Herbert Smith Freehills) for the First Defendant
Charles Gibson QC, Geraint Webb QC and Professor Adrian Briggs QC (instructed by Herbert Smith) for the Second Defendant
Hearing dates: 12, 13 and 14 April 2016
INTRODUCTION
The claimants are 1,826 Zambian citizens who are residents of four communities (Shimulala, Hellen, Kakosa and Hippo Pool) in the Chingola region of Zambia. On 31 July 2015, they commenced these proceedings alleging personal injury, damage to property, loss of income and loss of amenity and enjoyment of land arising out of alleged pollution and environmental damage caused by the Nchanga copper mine ("the mine") from 2005 to the present day.
The second defendant ("KCM") is a public limited company incorporated in Zambia. It owns and operates the mine. The first defendant ("Vedanta") is a holding company for a diverse group of base metal and mining companies, including KCM. I am told that KCM is the most important copper mining investment within the Vedanta group.
On 19 August 2016, Akenhead J granted the claimants permission on paper to serve the Claim Form and the Particulars of Claim out of the jurisdiction on KCM.
On 15 September 2015, Vedanta applied for:
(a) A declaration that the court does not have jurisdiction to try these claims, or alternatively, that the court should not exercise any jurisdiction which it may have to try these claims, pursuant to CPR Part 11(a) and/or (b);
(b) A stay of proceedings pursuant to CPR Part 11(6)(d) and/or CPR 3.1(2)(f) and/or pursuant to the court's inherent jurisdiction until further notice;
(c) Such further or consequential relief as the court deems fit; and
(d) Costs.
On 5 October 2015, KCM applied for:
(a) A declaration that the court does not have jurisdiction to try these claims, or alternatively, that the court should not exercise any jurisdiction which it may have to try these claims (alternatively, specific claims), pursuant to CPR Part 11(a) and/or (b);
(b) An order setting aside the claim form, the service of the claim form and the order of Akenhead J dated 19 August 2015, giving the claimants permission to serve the claim form on KCM out of the jurisdiction, alternatively, a stay of the claims and/or such further or consequential relief as the court deems fit;
(c) Such further or consequential relief, as the court deems fit; and
(d) Costs.
Unhappily, the central issue raised by these twin applications, namely where these claims should be tried, assumed all the trappings of a State trial. There were 19 full lever arch files containing evidence and exhibits, and a further 5 lever arch files containing well over 100 authorities. Live disputes between the parties ranged from detailed arguments as to the circumstances in which a parent company might owe a duty of care to those affected by the acts and omissions of its subsidiaries, to the dearth of private lawyers in Zambia and who is to blame for the failure of other environmental litigation in Zambia. Despite all of that, I was and remain of the view that the issues raised on the applications brought by the defendants are relatively straightforward and lead to what are, I hope, unsurprising conclusions.
The applications were heard over three days in mid-April 2016. The first full draft of this Judgment was prepared in the four days immediately thereafter, after which I went on circuit until the end of May. As I explained to the parties at the outset of the hearing, the logistical difficulty that I faced was that I could not take the 24 lever arch files on circuit, which meant in consequence that the final 'polishing' stage in the production of this Judgment was delayed for longer than I would have wished.
This Judgment comes in four parts. Part 1 ( Sections 1–6 inclusive) deals with general matters. Part II ( Sections 7–11 inclusive) deals with the application by Vedanta. Part III ( Sections 12–18 inclusive) deals with the applications by KCM. Part IV ( Section 19) sets out my conclusions.
BACKGROUND FACTS
The Parties
There are currently 1,826 claimants. This number may change because there has already been a dispute between Leigh Day, and another firm of solicitors, Hausfeld, as to who was representing those allegedly affected by pollution from the mine. It appears that Hausfeld are assessing the viability of potential new claims involving over 1,000 additional claimants. There is a distinct possibility, therefore, that the number of claimants may increase significantly.
The claimants live in the four villages in the Chingola district noted in paragraph 1. They are situated to the northwest of the mine. The majority of them are subsistence farmers who rely on the land and the local waterways to sustain basic agrarian livelihoods. They live along the Mushishima and Kakosa streams and the Kafue River, into which those streams flow. Their income is likely to be below the average income in Zambia, which is one of the world's poorest countries. It is unlikely that many of them will have travelled outside this part of Zambia, known as the Copperbelt region.
Beyond those general matters, it is not possible to be more specific about the claimants because, beyond the list of names, dates of birth and areas of residence, and a number of short witness statements from a few of them dealing with general matters, no other information has been provided about the individual claimants. Specifically, there are no details about their injuries, their land, or their alleged losses.
The mine commenced operation in 1937, when it was wholly owned by the Anglo-American Corporation Group, at the time of the British Protectorate of Northern Rhodesia. That country was granted independence and became Zambia in 1964. In 1970 the mine was part-nationalised, with 51% owned by State-controlled companies.
Thirty years later, in April 2000, KCM was incorporated in Zambia as a public limited company for the purpose of privatising the mine. It was 65% owned by KCM Holdings SA (an Anglo-American subsidiary), and 35% by ZCCM-Investment Holdings Plc, a State-owned company ("ZCCM"). In 2002, Anglo-American Plc withdrew from KCM. In 2004, Vedanta Resources Holdings Limited ("VRHL"), a subsidiary of Vedanta (the first defendant), acquired a 51% interest in KCM, the remaining 49% being held by ZCCM. In February 2008 VRHL increased its shareholdings, via call options, to 79.42%. The remaining 20.58% is owned by the Zambian State through ZCCM.
KCM operates the mine pursuant to statutory authority in the form of a mining licence. Only a Zambian domiciled company can be the holder of a mining licence. In addition, KCM hold a number of discharge licences which, subject to various conditions, permit KCM to make certain discharges from the mine into local waterways.
Vedanta is an extremely wealthy holding company: there are references in the papers to it being worth around £37 billion. It has 19 employees, of which eight are directors, with the others in corporate or administrative support roles. By contrast, the Vedanta group employs 82,000 people worldwide through its subsidiary companies. Those are the operating companies, like KCM, involved in all kinds of mining and manufacture, as well as oil, gas and power generation.
The Nchanga Copper Mine
The Nchanga mine actually consists of two separate mines: an 11km open pit mine and a deep underground mine. The mine operates in demanding conditions given the high water table and the high annual rainfall. KCM also operate a third copper mine in Zambia which is not the subject of this litigation. KCM employ 16,000 people in Zambia, the vast majority of them at Nchanga. KCM is the largest private employer in Zambia.
The Google satellite images not only show the two parts of the Nchanga copper mine, but they also show the waterways in the area of the mine and in particular the Kafue River, into which the subsidiary waterways flow. It is this river and these waterways which are at the heart of the claimants' claim in these proceedings.
Particular Criticisms of KCM
At the start of his written skeleton argument, Mr Hermer QC, on behalf of the claimants, gathered together a collection of criticisms of KCM made by three Commercial Court judges in an unrelated case, U & M Mining Zambia Ltd v Konkola Copper Mines Plc [2014] EWHC 2146 (Comm); [2014] EWHC 2374 (Comm); and [2014] EWHC 3250 (Comm). In summary, Eder, Cooke and Teare JJ all found that, in that case, KCM had repeatedly acted in a dishonest and unjustified manner. Those findings are in uncharacteristically strong terms. The collective view of the judges was summarised by Teare J when he said of KCM that they were:
"…an entity which has employees willing to give untrue evidence, to cause unnecessary harm, to be obstructive of the arbitration process and to take untenable points with a view to delaying enforcement…a party willing to do all it can to prevent the other party from enforcing its legal rights."
It was noted that, in the underlying arbitration in that...
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