Município De Mariana (and the Claimants identified in the Schedules to the Claim Forms) v BHP Group Plc (formerly BHP Billiton Plc)

Hearing dates: 22, 23, 24, 27, 28, 29, 30, 31 July 2020

Further written submissions: 2 September 2020

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON. Mr Justice Turner

INTRODUCTION

On 5 November 2015, the Fundão dam in south eastern Brazil collapsed and over 40 million cubic metres of iron ore mine tailings were released into the Doce River. The consequences were catastrophic.

The polluting waste eventually found its way to the Atlantic Ocean over 400 miles away. It destroyed, damaged or contaminated everything in its path. Nineteen people died. Hundreds of thousands were affected and suffered loss. Entire villages were obliterated

In these proceedings, about 202,600 individual, corporate and institutional claimants contend that the defendants are liable to compensate them for losses sustained as a result of the disaster. The defendants resist the claims arguing, in particular, that legal liability to the claimants falls not upon them but upon the shoulders of others including the owner and operator of the dam which was, and is, Samarco Mineração SA (“Samarco”), a Brazilian mining company.

The corporate structure of which Samarco is a part is elaborate. Essentially, Samarco is a non-operated equal joint venture between Vale SA (“Vale”) and BHP Billiton Brasil LTDA (“BHP Brasil”). The first defendant, BHP Group Plc (“BHP Plc”) is a company incorporated in England. The second defendant, BHP Group Limited (“BHP Ltd”), incorporated in Australia, is a separate legal entity but linked with BHP Plc in a dual listed company arrangement which provides for a unified management structure. BHP Ltd is the ultimate owner of BHP Brasil. In this context, the defendants contend that, under Brazilian law, unlike Samarco, they are not liable to the claimants as polluters or otherwise.

The defendants not only deny substantive liability but have invited the Court, in response to applications based upon four distinct procedural grounds, to find that the case against them should be allowed to proceed no further in this jurisdiction. They contend that:

(i) the claims should be struck out or stayed as an abuse of the process of the court;

(ii) the claims against BHP Plc should be stayed by the application of Article 34 of the Recast Brussels Regulations;

(iii) the claims against BHP Ltd should be stayed because England is forum non conveniens;

(iv) alternatively, the claims against both defendants should be stayed on case management grounds.

One issue in the case was whether or not the claimants could expect to obtain full redress if they were limited to pursuing their claims in Brazil and not in England.

During the course of his submissions, Mr Hollander QC on behalf of the claimants sought to ventilate an argument concerning an issue as to Samarco's financial position but which had not been included in his skeleton argument and to which there had been no previous reference in any other context. In the exercise of my case management powers, I ruled that it was not open to him to bring the issue of Samarco's solvency into consideration.

It is the consequences of that decision which have given rise to the dispute between the parties which it is the purpose of this judgment to resolve.

BACKGROUND

The procedural history of this case does not make for happy reading. I will aim to keep it short.

I readily acknowledge the complexity of the issues to which the defendants' applications give rise. These features, however, go only some way towards justifying the accumulation of the huge swathes of documentation thereafter deployed by the parties. The trial bundles comprised 2,085 items set out in 30,015 pages which had been “distilled” into no fewer than five core bundles. There were nine further bundles containing no fewer than 127 authorities. The defendants' skeleton argument was 187 pages long and was the product of the collective endeavours of three leading and four junior counsel. The claimants' skeleton argument, the authors of which comprised one leading counsel and eight junior counsel, was 211 pages long and, by the end of the hearing, had been supplemented incrementally by no fewer than 22 appendices the steady flow of which gave rise to a growing frisson of resentment on the part of the defendants. Submissions lasted for eight full days and have been recorded in a transcript which is about 1,200 pages in length.

A close analysis of the parties' cases thus reveals a fractal pattern of progressively complex and ever-finer recursive detail of sharply declining significance. I dread to think of the costs which have been expended on this exercise.

In this context, I note the observations of Lord Briggs in Lungowe v Vedanta Resources Plc [2019] 2 W.L.R. 1051:

“6. It is necessary to say something at the outset about the disproportionate way in which these jurisdiction issues have been litigated. In Spiliada Maritime Corpn v Cansulex Ltd (The Spiliada) [1987] AC 460, 465, Lord Templeman said this, about what was, even then, the disproportionate manner in which jurisdiction challenges were litigated:

“In the result, it seems to me that the solution of disputes about the relative merits of trial in England and trial abroad is pre-eminently a matter for the trial judge. Commercial Court judges are very experienced in these matters. In nearly every case evidence is on affidavit by witnesses of acknowledged probity. I hope that in future the judge will be allowed to study the evidence and refresh his memory of the speech of my noble and learned friend Lord Goff of Chieveley in this case in the quiet of his room without expense to the parties; that he will not be referred to other decisions on other facts; and that submissions will be measured in hours and not days. An appeal should be rare and the appellate court should be slow to interfere.”

That dictum is, in my mind equally applicable to all the judges in what are now the Business and Property Courts of England and Wales, including, as in this case, the Technology and Construction Court.”

THE HEARING

During the course of the hearing, I expressed concern to Mr Gibson QC, one of the three leading counsel acting for the defendants, about the quantity of material which had been deployed by both sides. His explanation relied partly upon the procedural complexity of the proceedings in Brazil and partly upon the need to respond to the growing number of submissions raised and documents relied upon by the claimants in what, to my mind, had long since deteriorated into a forensic arms race.

At the first case management conference to be listed before me, which took place just three weeks before the hearing had been due to commence, I was presented with a fait accompli in terms of the volume of material which had already been collated and deployed by the parties over the preceding period of seven months. I took the view that any attempt retrospectively, and at the eleventh hour, to restrict the deployment of such material would be likely to do more harm than good. The parties would be distracted from the task of preparing the case and there would almost inevitably have arisen time-consuming disputes as to what material should be abandoned and what retained. The genie was already out of the bottle. For these reasons, I indicated that I would proceed on a “we are where we are” basis. I permitted the parties to serve further evidence to deal with specifically defined recent developments in the Brazilian proceedings but to be strictly confined to no more than 20 pages each. I also accepted that the skeleton arguments would probably have to be longer than usual in order to cover the relevant ground. There was, however, a limit to the extent of the arguably over-generous indulgence I was prepared to afford the parties whilst at the same time remaining loyal to the need to comply with the overriding objective.

That limit was reached on the morning of the seventh day of the eight-day hearing.

By that stage, the Court had already been the unenthusiastic recipient of a considerable number of “speaking notes” from Mr Hollander QC which the cynical observer may have categorised, at least in part, as a labelling exercise to render the late introduction of new or more detailed material more palatable to the Court. Hitherto, Mr Gibson QC, on behalf of the defendants had responded to the deployment of such notes with weary resignation rather than...