Município De Mariana (and the Claimants identified in the Schedules to the Claim Forms) v BHP Group (UK) Ltd (formerly BHP Group Plc)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 21 December 2022 |
| Neutral Citation | [2022] EWHC 330 (TCC) |
| Docket Number | Case No: HT-2022-000304 |
| Court | Queen's Bench Division (Technology and Construction Court) |
and
[2022] EWHC 330 (TCC)
Mrs Justice O'Farrell DBE
Case No: HT-2022-000304
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Royal Courts of Justice
Rolls Building, London, EC4A 1NL
Alain Choo-Choy KC, Nicholas Harrison, Jonathan McDonagh and Russell Hopkins (instructed by Pogust Goodhead (a trading name of PGMBM Law Ltd) for the Claimants
Charles Gibson KC, Shaheed Fatima KC, Stephanie Wood and Veena Srirangam (instructed by Slaughter and May) for the Defendants
Simon Salzedo KC and Richard Eschwege (instructed by White & Case LLP) for the Third Party
Hearing dates: 13 th and 14 th December 2022
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.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Wednesday 21 st December 2022 at 10.30am
This matter is before the court for an initial directions hearing, to consider the shape and scope of the proceedings, and identify steps required to be taken in advance of a case management conference (“CMC”) which will take place at the end of March or beginning of April 2023.
The main issues for the court to determine at this stage are:
i) what group litigation directions should be given to manage the proceedings;
ii) whether the court should fix a date for the first stage trial in respect of threshold liability issues; and
iii) what further directions the court should make in advance of the proposed CMC.
Background
The claims arise out of the collapse of the Fundão Dam in Brazil.
The material background is set out in the earlier judgment of the Court of Appeal at [2022] EWCA Civ 951. On 5 November 2015 Brazil suffered its worst ever environmental disaster when the Fundão Dam in southeast Brazil collapsed, releasing around 40 million cubic metres of tailings from iron ore mining. The collapse and flood killed 19 people, destroyed entire villages, and had a widespread impact on numerous individuals and communities, not just locally but as a result of the damage to the River Doce system over its entire course to the sea some 400 miles away. The Brazilian public prosecutor has estimated the cost of remediation and compensation at a minimum of R$155 billion, about £25 billion at today's exchange rates.
The area affected by the dam collapse fell within two states, Minas Gerais, where the dam was situated, and Espírito Santo, in which the River Doce reaches the Atlantic Ocean. The local government authority with responsibility for the area which included the dam itself, and the nearby villages which were destroyed, is the municipality of Mariana.
In these proceedings over 200,000 claimants seek compensation for losses caused by the disaster from the first defendant, a company incorporated in England and Wales (“BHP UK”), and the second defendant, a company incorporated in Australia (“BHP Australia”). The claimants are all Brazilian and comprise (i) over 200,000 individuals; (ii) 530 businesses, ranging from large companies to sole traders; (iii) 15 churches and faith based institutions; (iv) 25 municipalities; (v) 5 utility companies; and (vi) members of the Krenak community who have particular community rights, and for whom the river plays a unique part in their spiritual traditions.
The dam was owned and operated by Samarco Mineração SA (“Samarco”), a Brazilian company jointly owned, in 50% shares pursuant to a joint venture agreement, by the third-party Brazilian entity (“Vale”) and BHP Brasil Ltda (“BHP Brasil”). BHP Australia is the ultimate parent company of BHP Brasil. At all material times BHP Australia and BHP UK have operated together as a single economic entity under a dual listed company structure. The claims are brought jointly and severally against BHP UK and BHP Australia.
Following the disaster, there were criminal proceedings against various defendants in the Brazilian courts and also civil proceedings at federal and state level, comprising individual claims and class actions (“CPAs”). On 5 July 2016 a Brazilian private foundation (“Renova”) was established by Samarco, Vale and BHP Brasil as the vehicle through which they would carry out a programme of remediation and compensation.
The Proceedings
In November 2018, the claimants issued proceedings against BHP UK in the Business and Property Courts in Liverpool, Technology and Construction Court (“TCC”) by way of Part 7 claims (E50LV008 and E50LV010). A further claim form was issued on 3 May 2019 (HT-2019-LIV-000005) against both BHP UK and BHP Australia.
Between May and July 2019 the claimants served generic Master Particulars of Claim, together with approximately 200,000 Additional Particulars of Claim (“APOCs”) setting out the details of claims by individual claimants.
On 7 August 2019 the defendants applied for the claims to be struck out as an abuse of process; alternatively for the claims to be stayed on forum non conveniens grounds, pursuant to article 34 of Brussels Recast or the court's case management powers. The application was granted by Turner J, on the basis set out in his judgment dated 9 November 2020 at [2020] EWHC 2930 (TCC). The appeal against that judgment was successful, as set out in the Court of Appeal's judgment dated 8 July 2022 at [2022] EWCA Civ 951, and the defendants' applications were dismissed.
On 22 August 2022, with the consent of and at the request of the parties, His Honour Judge Cadwallader ordered a transfer of the claims to the TCC in London.
The defendants have sought permission to appeal to the Supreme Court; the outcome of such application is not yet known. The defendants' request for a stay pending determination of their permission application was refused by the Court of Appeal (and not renewed before the Supreme Court) but its continued participation in these proceedings is subject to the claimants' undertaking set out in the Court of Appeal Order dated 31 August 2022:
“(1) not to rely on any steps taken by the Defendants in the proceedings following this Order (including but not limited to the filing of an Acknowledgement of Service and/or Defence) as prejudicing any application for permission to appeal (or appeal) by the Defendants in any respect and (2) not to rely on any steps that the Defendants take and/or are ordered to take in the proceedings whilst permission to appeal/an appeal has not been finally determined in support of any argument that the Defendants have submitted to the jurisdiction.”
The Claims
The claimants seek to update their pleadings, as partially set out in the proposed Re-Amended Master Particulars of Claim (“RAMPOC”) served shortly before this directions hearing. The claims are all advanced under Brazilian law and include the following pleaded allegations:
i) Articles 3(IV) and 14 of the Environmental Law and/or Articles 927 and 942 of the Civil Code impose strict liability on the defendants for loss and damage caused by the environmental disaster by reason of their: (a) ownership and/or control of the entity responsible for the damage; (b) failure to supervise the activity giving rise to the damage; (c) funding the activity of others which led to the damage; and/or (d) benefiting from the activity of others which led to the damage.
ii) The defendants are liable under Articles 186, 927, 932 and 942 of the Civil Code for the loss and damage suffered by the claimants by reason of their voluntary act or omission, negligence or imprudence in: (a) disregarding advice and warnings as to the risks of collapse and/or (b) failing to take satisfactory action to address such risks.
iii) The defendants are liable under Article 116 of the Corporate Law, as controlling shareholders, for the loss and damage suffered by the claimants, by permitting activities involving a significant risk of substantial damage to the community.
The loss and damage suffered by the claimants is pleaded in general terms for each category of claimant in the body of the RAMPOC and can be summarised as follows:
i) The individuals claim compensation for physical and psychological injury, property damage, the need to move home, increased living expenses, loss of earnings, interference with fishing activities, loss of water and electricity supplies, and interference with their use and enjoyment of the river and land.
ii) The business claimants claim compensation for property damage, loss of profits, loss of income or increased costs, loss of business opportunities, loss of value and damage to reputation.
iii) The churches and faith-based institutions claim compensation for property damage, destruction or damage to artefacts of spiritual, artistic, historical and/or social significance, costs of property security and storage, loss of income, loss of water supply and loss of spiritual ties with the congregation.
iv) The municipalities claim compensation for damage to property, the environment, cultural heritage, tourism and quality of life, costs of remediation, lost income and investment, loss of reputation and costs of settling claims arising out of the collapse.
v) The utilities claim compensation for costs of repair, remediation and testing of the water treatment plants, the water supply system and associated equipment, loss of revenue and loss of reputation.
vi) The indigenous groups and the Quilombola claimants...
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