Multinationals and the Export of Hazard
| Date | 01 January 1995 |
| DOI | http://doi.org/10.1111/j.1468-2230.1995.tb01994.x |
| Published date | 01 January 1995 |
| Author | Simon Baughen |
Multinationals and the
Export
of
Hazard
Simon
Baughen
*
The relocation of hazardous activities to the developing countries by multinational
companies in the developed world has become a well-established feature of the
global economy. Cases such as the Bhopal disaster show the problems that can
arise from this practice and, in particular, the difficulties foreign plaintiffs may
experience in obtaining adequate compensation for resulting injuries.
I
However,
the problem is not limited to hazardous activities but also extends to the export of
hazardous waste.2 International concern at the export of hazardous waste led to
the Base1 Convention 1989 which was ratified by the European Community on
1
February 1993. The provisions of the Convention became part of Community
law by Council Regulation (EEC)
No
259/93 of the same date. This article will
examine the impact of the Regulation on the position of a foreign plaintiff who has
suffered injury by reason of the export of waste to its country by an English
~ompany.~ However, the discussion of tort liability, jurisdiction and choice of
law issues will also be relevant to the related problem of a foreign plaintiff who has
suffered injury by reason of the export of hazardous technology, as
in
the Bhopal
case.
The plaintiff may well find, as in the Bhopal case, that the domestic company
which caused the damage has insufficient assets to satisfy any judgment against it.4
The foreign plaintiff will, therefore, need to consider recourse against the
English exporting company. However,
this
course of action confronts two
formidable obstacles. The first, arising from the foreign location of the damage,
lies in establishing jurisdiction in the English courts. The second is establishing
liability in tort. In suing the English company in the English courts, the foreign
plaintiffs would first have to overcome the reluctance of the English law of tort to
make one person responsible for the acts of another outside the servanvagent
sphere of vicarious liability.5 To do
this,
the plaintiff would have to show either
that the English company had broken a primary duty of care, or that the doctrine of
*Lecturer in Law at the University of Bristol.
Thanks
are due to Professor Keith Stanton and Jonathan Hill of the University of Bristol and Andrew
Griffiths of the University of Manchester, all of whom commented on earlier
drafts
of this article. The
views expressed
are
those of the author alone.
For further discussion of the legal issues arising out of the disaster,
see
Muchlinski, ‘The Bhopal Case:
Controlling Ultra-Hazardous Industrial Activities Undertaken by Foreign Investors’ (1987)
50
MLR
545; Abraham and Abraham, ‘The Bhopal Case and the Development of Environmental Law in India’
(1991)
40
IJCL 334; Cassels, ‘The Uncertain Promise of Law: Lessons from Bhopal’ (1991) 29
Osgocde Hall Rev 1; Baughen, ‘Corporate Accountability and the Law of Tort: The Inconclusive
Verdict of Bhopal’ (1993), University of Manchester Working Paper
No
16.
2 The exact figures for the transfer of wastes from the developed to the developing countries are difficult
to
estimate, but ‘several hundred thousand tonnes would seem to
be
a reasonable aggregate figure
based upon existing written and oral reports’: Long, ‘Economic Aspects of Transport and Disposal of
Hazardous Wastes’ (1990) 14
Marine
Policy
198. at 200.
3
For the purposes of this article, this term will mean a company incorporated in Great Britain which is
domiciled in England for the purposes of the Civil Jurisdiction and Judgments Act 1982.
4
Such cases in general terms may
be
regarded as exceptional. However, they are likely
to
be
the norm
in disaster cases when the subsidiary is faced by large numbers of claims for death,
personal
injury and
property damage. It is these disaster claims that
are
most likely to give
rise
to the sort of litigation
under discussion in this article.
5
Winfield and Jolowicz,
Tort
(London: Sweet
&
Maxwell, 14th ed, 1994) pp 592-593, 615-619.
1
0
The
Modern
Law Review Limited
1995
(MLR
58:
1,
January).
Published by Blackwell Publishers,
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54
January
19951
Multinationals
and
the
Export
of
Hazard
separate corporate personality should be disregarded
so
as to make the English
company vicariously liable for the acts and defaults of the foreign company. This
article considers these obstacles in
turn,
before considering the effect of the
Council Regulation.
Jurisdiction
A foreign plaintiff could sue the English company either in the jurisdiction where
the damage occurred or in the High Court in England. However, for the purposes
of obtaining an enforceable judgment, the choice is illusory. For any foreign
judgment to be enforceable under the general principles of private international
law, the English company would have had to have submitted to the jurisdiction of
the foreign court.6 Alternatively, it would have had to have been ‘present’ in the
jurisdiction at the time the proceedings were started.’
In
Adum
v
Cape Industries
~ZC,~
the Court of Appeal confirmed that such ‘presence’ will not be established
merely through the presence
in
the foreign jurisdiction of either a subsidiary
company or a company which is in reality entirely controlled by the defendant
corp~ration.~ This would apply
a fortiori
to the relationship between an exporter
and an importer of waste who had no juristic connections with each other.lO
The foreign plaintiff, therefore, has to sue in England if intending
to
obtain an
enforceable judgment against the English company which had exported the waste.
That company could then seek to stay the action on the grounds of
forum
non
conveniens.
The general principles to be applied in such cases are set out in
The
SpiZiudu.”
If another forum is more appropriate for the hearing of the action, a
stay will be granted unless to do
so
would cause injustice to the plaintiff.12
‘Appropriate’
forum
The AZbaforth13
suggests that the
locus
of the tort is the natural forum. It is
therefore necessary to establish where the cause of action in tort arose.
This
procedural question is inextricably linked with the substantive issue of the likely
ultimate basis of the English company’s liability in tort, if any. If it is found
vicariously liable for the acts and omissions of the foreign company, then the cause
of action will arise in the country in which the foreign company broke its duty
of
care. Furthermore, with a claim for vicarious liability, most of the important
evidence and witnesses will
be
located in the country where the foreign company
6
7
8
9
10
11
12
13
~~ ~~~
Cheshire and North,
Private Intemtional
Law
(London: Butterworths, 12th ed, 1992) pp 351 -358.
ibid
pp 349
-
35 1.
[1990] Ch 433 (CA).
A further reason for the decision of the Court of Appeal was the fact that the method adopted by the
court in Texas in assessing
the
amount of the default judgment was contrary
to
the requirement of
‘substantial justice.’ However, the tenor of the Court of Appeal’s judgment makes it likely that either
issue by itself would have been decisive.
For judgments obtained in a jurisdiction to which
the
Foreign Judgments (Reciprocal Enforcement)
Act 1933 applies, the ‘presence’ requirement is replaced by one requiring the defendant to have had its
‘principal place of business’ in the foreign jurisdiction at the commencement of the proceedings.
Spiliada Maritime COT
v
Cansulex
[1987]
AC
460.
After
re
Harrods
(Buenos Aires)
Lrd [1991] 3 WLR 397 (CA), there would be no question
of
the
Brussels Convention applying where
the
alternative forum is in a non-contracting state such as India.
Cordoba Shipping Co
v
National Srate
Bank
[1984] 2 Lloyd’s Rep 61.
0
The
Modern
LAW
Review Limited
1995
55
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