Vedanta Resources Plc and another v Lungowe and Others

Heard on 15 and 16 January 2019

( with whom Lady Hale, Lord Wilson, Lord Hodge and Lady Black agree)

This litigation arises from alleged toxic emissions from the Nchanga Copper Mine in the Chingola District of Zambia. The claimants, who are the respondents to this appeal, are a group currently consisting of some 1,826 Zambian citizens who live in four communities within the Chingola District. They are, by any standards, very poor members of rural farming communities served by watercourses which provide their only source of water for drinking (by themselves and their livestock) and irrigation for their crops. They say that both their health and their farming activities have been damaged by repeated discharges of toxic matter from the Nchanga Copper Mine into those watercourses, from 2005 to date.

The Nchanga Copper Mine (“the Mine”) consists, in part, of an open-cast mine, said to be the second largest in the world, and in part of a deep mine. Its immediate owner is the second defendant Konkola Copper Mines plc (“KCM”), which is a public company incorporated in Zambia. KCM is the largest private employer in Zambia, employing some 16,000 people, mainly at the Mine. The first defendant Vedanta Resources plc (“Vedanta”) is the ultimate parent company of KCM. It is the parent of a multinational group, listed on the London Stock Exchange, with interests in minerals, power, oil and gas in four continents. Vedanta is incorporated and domiciled in the United Kingdom. Although Vedanta claims only to have 19 employees of its own, eight of whom are its directors, the Vedanta Group employs some 82,000 people worldwide. KCM is not a 100% subsidiary of Vedanta, since the Zambian government has a significant minority stake, but materials published by Vedanta state that its ultimate control of KCM is not thereby to be regarded as any less than it would be if wholly owned.

The claims against both defendants are pleaded in common law negligence and breach of statutory duty. Those causes of action are pursued against KCM on the basis that it is the operator of the Mine. As against Vedanta, the same causes of action are said to arise by reason of the “very high level of control and direction that the first defendant exercised at all material times over the mining operations of the second defendant and its compliance with applicable health, safety and environmental standards”: (Particulars of Claim, para 79).

This appeal is all (and only) about jurisdiction; that is, the jurisdiction of the courts of England and Wales to determine those claims against both defendants. As against Vedanta, the claimants rely upon article 4 of the Recast Brussels Regulation (Regulation (EU) 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters). As against KCM the claimants rely upon what may loosely be called the “necessary or proper party” gateway of the English procedural code for permitting service of proceedings out of the jurisdiction, now to be found mainly in para 3.1 of CPR Practice Direction 6B.

The procedural background to this appeal is, in outline, as follows. The claimants issued the Claim Form in July 2015. Vedanta was served within the jurisdiction. Service was effected on KCM out of the jurisdiction pursuant to permission obtained on a without-notice application on 19 August 2015. Both Vedanta and KCM applied to challenge jurisdiction, in September and October 2015 respectively. Their applications were heard together, over three days in April 2016, by Coulson J, who delivered a comprehensive reserved judgment dismissing them on 27 May 2016 [2016] EWHC 975 (TCC). The defendants' appeals were heard over two days in July 2017 and dismissed, again in a comprehensive reserved judgment, in October 2017 [2018] 1 WLR 3575. The defendants' further appeals to this court were heard, again over two full days, in January 2019.

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.

That requirement for proportionality, and for respect to be given to first instance decisions on jurisdiction, has been repeated, perhaps in less colourful terms, in numerous subsequent cases. In VTB Capital plc v Nutritek International Corpn [2013] 2 AC 337, Lord Neuberger of Abbotsbury said this, at paras 82 to 83:

“82. The first point is that hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost. There is also a real danger that, if the hearing is an expensive and time-consuming exercise, it will be used by a richer party to wear down a poorer party, or by a party with a weak case to prevent, or at least to discourage, a party with a strong case from enforcing its rights.

83. Quite apart from this, it is simply disproportionate for parties to incur costs, often running to hundreds of thousands of pounds each, and to spend many days in court, on such a hearing. The essentially relevant factors should, in the main at any rate, be capable of being identified relatively simply and, in many respects, uncontroversially. There is little point in going into much detail: when determining such applications, the court can only form preliminary views on most of the relevant legal issues and cannot be anything like certain about which issues and what evidence will eventuate if the matter proceeds to trial.”

At para 84 Lord Neuberger cited dicta to the same effect by Waller LJ in Cherney v Deripaska (No 2) [2010] 2 All ER (Comm) 456, para 7, in which he concluded that it “would have been better for both parties and better use of court time if they had expended their money and their energy on fighting the merits of the claim”.

Jurisdiction challenges frequently raise questions about whether the claim against one or more of the defendants raises a triable issue. As it is now common ground, this broadly replicates the summary judgment test. Issues of this kind are, regardless whether contained within jurisdiction disputes, subject to a similar requirement for proportionality, the avoidance of mini-trials and the exercise of judicial restraint, in particular in complex cases, as was emphasised in the following well known passage from the speech of Lord Hope of Craighead in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1:

“94. For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is — what is to be the scope of that inquiry?

95. I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money,...