Shipping casualties and clearing-up

After a casualty the clear priority for shipowning, P&I and insurance interests alike is to clear up the mess as soon as possible and start trading again. The last thing they want is a run-in with well-meaning administrators saying that nothing can be done until form after form has been filled in, checked, rubber-stamped and filed, and permission to act obtained from Old Uncle Tom Cobleigh and all. Yet this was exactly what happened in 2012 to the owners of the 86,000 dwt container vessel MSC Flaminia. A fire broke out on a voyage from Charleston to Antwerp, forcing the crew to abandon ship and resulting in the vessel being towed dead to Wilhelmshaven in Germany. The owners wanted to send her directly to an entirely reputable ship-repairer in Romania for cleanup and repair, but the German environmental authorities were having none of it. The vessel was full of filth, sludge, metal debris and the dirty water used to extinguish the fire. This was, they said, waste and subject to the Waste Directive 2008 and Regulation 1013/2006, requiring extensive documentation, planning and administrative oversight before any transfer could take place. Owners argued in vain that Art.1.3(b) specifically excepted waste produced on board ships, trains, etc and later discharged for treatment: debris from a casualty, said the bureaucrats, was not within the exception. The result was that the ship remained marooned in Wilhelmshaven for seven months before it was finally allowed to go to Romania. The German courts, in proceedings to recover the resulting losses from the state, initially supported the Teutonic bureaucracy, but the Munich Landgericht then sent the question off to the ECJ: was waste resulting from a marine casualty within the exception?

The ECJ, much to everyone’s relief, today said that it was. The Directive had to be interpreted purposively and there was no reason to give special treatment to waste resulting from a casualty, especially as the terms of Art.1.3(b) were unqualified. Within the EU this now means that vessels can get out of ports of refuge quickly and be sent with due expedition to wherever they can be cleaned up and repaired most efficiently. And a good thing too.

The decision, under the name of Conti II v Land Niedersachsen (Case C‑689/17) [2019] EUECJ C-689/17, is here (unfortunately only in French).

When is a bill of lading ‘spent’?

 

In The Yue You 9023 [2019] SGHC 106 the High Court of Singapore has considered the issue of title to sue when spent bills of lading are involved under section 2(2)(a) of the Bills of Lading Act (equivalent to UK COGSA 1992). The bank held bills of lading as security for a loan to the buyer and sued the shipowner for misdelivery in delivering the cargo to a party nominated by the seller before the loan was made without production of a bill of lading. The court held that delivery of cargo to a party that was not entitled to delivery did not cause a bill of lading to be spent (a point noted obiter by the Court of Appeal in The Erin Schulte).

If, however, the bill had been spent the bank would have obtained title to sue under s.2(2)(a) as the loan facility agreement made several years earlier between the bank and the buyer was the contractual arrangement in pursuance of which the transaction had been effected for the purpose of section 2(2)(a). Further the bank had become the holder of the bills in good faith as required by s.5(2) of the Bills of Lading Act and its decision to grant the loan to the buyer against security over the bills, even on the assumption that it knew that the cargo had been discharged, could not be said to have been dishonest; nor could the bank be said to have consented to delivery of the cargo without production of the bills of lading.

The Norstar case at the International Tribunal for the Law of the Sea. Panama wins but awarded less than 1% of its claims.

 

In the Norstar case (Panama v Italy) on 10 April 2019, the International Tribunal for the Law of the Sea found that: Italy had violated article 87, paragraph 1, of the UN Convention on the Law of the Sea; article 87, paragraph 2, of UNCLOS was not applicable in the case; and that Italy did not violate article 300 of UNCLOS. The Tribunal awarded Panama compensation for the loss of the M/V “Norstar” in the amount of US$ 285,000 with interest.

The Norstar, a Panamanian-flagged vessel was engaged in supplying gasoil to mega yachts in the Mediterranean Sea. On 11 August 1998, the Public Prosecutor at the Court of Savona, Italy, issued a Decree of Seizure against the M/V “Norstar”, in the context of criminal proceedings instituted against eight individuals for alleged smuggling and tax evasion. At the request of Italy, the vessel was seized by Spanish authorities when anchored in the bay of Palma de Mallorca, Spain, in September 1998. The Tribunal found that art. 87 might be applicable as the bunkering activities of the M/V “Norstar” on the high seas in fact constituted not only an integral part, but also a central element, of the activities targeted by the Decree of Seizure and its execution.

The Tribunal noted that article 87 “proclaims that the high seas are open to all States” and that “save in exceptional cases, no State may exercise jurisdiction over a foreign ship on the high seas”. In this context, it observed that the “[f]reedom of navigation would be illusory if a ship … could be subject to the jurisdiction of other States on the high seas” Recalling its jurisprudence in  The Virginia G, the Tribunal then expressed the view that “bunkering on the high seas is part of the freedom of navigation to be exercised under the conditions laid down by the Convention and other rules of international law” and found that the bunkering of leisure boats carried out by the M/V “Norstar” on the high seas fell within the freedom of navigation under article 87.

In the view of the Tribunal, “if a State applies its criminal and customs laws to the high seas and criminalizes activities carried out by foreign ships thereon, it would constitute a breach of article 87 of the Convention, unless justified by the Convention or other international treaties” and “[t]his would be so, even if the State refrained from enforcing those laws on the high seas” adding that, “even when enforcement is carried out in internal waters, article 87 may still be applicable and be breached if a State extends its criminal and customs laws extraterritorially to activities of foreign ships on the high seas and criminalizes them” . The Tribunal concluded that Italy, through the Decree of Seizure by the Public Prosecutor at the Court of Savona against the M/V “Norstar”, the Request for its execution, and the arrest and detention of the vessel, had breached article 87(1) of UNCLOS.

The Tribunal found that art.87(2) which provides “These freedoms shall be exercised by all States with due regard for the interests of other States in their exercise of the freedom of the high seas,…” was not applicable in this case as it was Panama, not Italy, that was subject to the obligation of due regard. The Tribunal held that Italy had not violated art. 300 (Good Faith and Abuse of Rights). Article 300 cannot be invoked on its own and a State Party claiming a breach of article 300 must, inter alia, “establish a link between its claim under article 300 and ‘the obligations assumed under this Convention’ or ‘the rights, jurisdiction and freedoms recognized in this Convention’.

The Tribunal turned to reparation and held that Panama was entitled to compensation for damage suffered by it as well as for damage or other loss suffered by the M/V “Norstar”, including all persons involved or interested in its operation and emphasized the requirement of a causal link between the wrongful act committed and damage suffered.  The causal link between the wrongful act of Italy and damage suffered by Panama was interrupted on 26 March 2003” – when the shipowner received an official communication from the Court of Savona that the vessel was unconditionally released from detention – and any damage that may have been sustained after 26 March 2003 was not directly caused by the arrest and detention of the M/V “Norstar”.

The Tribunal awarded US$ 285,000 as the value of the M/V “Norstar” together with interest This was less than 1% of the total claims put forward by Panama. The tribunal did not award compensation with regard to Panama’s other claims: loss of profits; continued payment of wages; payment due for fees and taxes; loss and damage to the charterer of the M/V “Norstar”; and material and non-material damage to natural persons.

Waiver of Further Disclosure- The First Case Under the Insurance Act 2015

The Insurance Act (IA) 2015, which came into force on 12 August 2016, applies in England and Wales, Scotland and Northern Ireland (s. 23 of the IA 2015). It fell to the Court of Session (Outer House) in Scotland to deliver the first judgment under the Act in Young v. Royal and Sun Alliance plc [2019] CSOH 32.

The co-assureds (Mr Young and Kaim Park Investments Ltd, a company of which Mr Young was a director) brought a claim of £ 7.2 million for extensive fire damage to commercial premises insured. The insurer, Royal and Sun Alliance plc, rejected the claim on the basis that the assured failed to disclose material information (a commercial assured is under a duty of fair presentation under the IA 2015).

The policy had been entered through an insurance broker. The assured was requested by the insurance broker to fill in a proposal form which was prepared using the broker’s software. One part of the proposal form required the proposer to select from various options in a drop-down menu. The instruction read: “Select any of the following that apply to any proposer, director or partner of the Trade or Business or its Subsidiary Companies if they have ever, either personally or in any business capacity: …” The drop-down menu that followed this instruction included an option that any of the persons identified had been declared bankrupt or insolvent. Neither Mr Young nor Kaim Park Investments had been declared bankrupt or insolvent, however, Mr Young had previously been a director of four other companies which had entered into insolvency. The option which was selected on the proposal form was “None”. Accordingly, the proposal forwarded to the insurer showed the option selected, i.e. “None”, and the list of persons to which the declaration related. Once receiving the presentation, the insurer sent an e-mail to the brokers providing a quote for cover and a list of conditions. The conditions, inter alia, included: “Insured has never been declared bankrupt or insolvent.

In the present case, the assured’s argument was that the insurer’s e-mail response amounted to a waiver by the insurer of its right to receive the undisclosed information regarding the four insolvent companies.

The 2015 Act introduces no fundamental change on the law on waiver (a point which both parties agreed). By virtue of s. 3(5) (e) of the Act, the assured is not required to disclose a circumstance “if it is something as to which the insurer waives information.”

The judge, Lady Wolffe, reviewing the case law under the Marine Insurance Act (MIA) 1906 reiterated that waiver in this context can typically arise in one of two ways:

  • Where the insured had submitted information that would prompt a reasonably careful insurer to make further enquiries but the insurer had failed to do so (WISE (Underwriting Agency) Ltd v Grupo Nacional Provincial SA [2004] 2 All ER (Comm) 613); and
  • Where the insurer had asked a “limiting question” such that the insured could reasonably infer that the insurer had no interest in knowing information falling outwith the scope of the question (Doheny v New India Assurance Co [2005] 1 All ER (Comm) 382). The classic example is where the proposal form asks about convictions within the last 5 years and which can instruct waiver of information about convictions more than 5 years ago.

It was decided by Lady Wolffe that only the second of these forms of waiver could be relevant in the present case. Therefore, the key issue was whether it could be inferred from the e-mail of the insurer to the broker stating that the “assured has never been declared bankrupt or insolvent” that the insurer waived information regarding the involvement of Mr Young in other companies which had entered insolvency.

Reviewing the case law on the point, Lady Wolffe stressed that in determining whether the insurer’s email response amounted to waiver, the key consideration was whether a reasonable person in the position of the assured would be justified in thinking that the insurer had restricted its right to receive all material information. It needs to be borne in mind that when presenting the risk to the insurer, the broker utilized its own form rather than the insurer’s proposal form. The relevant part of the proposal form required the proposer to select from various options in a drop-down menu. The instruction read: “Select any of the following that apply to any proposer, director or partner of the Trade or Business or its Subsidiary Companies if they have ever, either personally or in any business capacity: …” The choices that followed this instruction included an option that any of the persons identified had been declared bankrupt or insolvent, but when assessing the risk, the insurer had only seen the selected option of “None” in the presentation. They had not seen the full list of options which the assured had selected from (which the judge referred to as matters concerning “Moral Hazards”). Therefore, the insurer’s email response intended to clarify that unknown matter. The insurer had done this by listing in the email the various hazards that required to be included. As a result, it was held that the reference in the email response to “the Insured” was not intended to limit the scope of the information being provided but had simply been used as shorthand for the group of persons identified in the presentation. Accordingly, there was no waiver on the part of the insurer with regard to the information not fully disclosed (i.e. the involvement of Mr Young in four insolvent companies).

Even though the case is the first one considered under the Insurance Act 2015, it does not shed any light on any of the novel concepts introduced by the Act. The decision was concerned with the preliminary question of waivers and was decided in light of authorities on the subject which have already existed for some time. Essentially, the fact that the broker’s own proposal form was used meant that the scope of information provided had been controlled by the assured and that it was impossible to be found as a waiver.

‘Howsoever caused’ in exception clause in bill of lading covers loss due to negligence and unseaworthiness.  

 

The Elin (Aprile S.PA. v Elin Maritime Ltd) [2019] EWHC [1001] (Comm) involved a claim under a bill of lading for damage to a cargo carried on deck which was stated to be so carried, and was therefore not subject to the Hague Rules. Owners sought to rely on two clauses.

1- the provision on page 1 of the Bill of Lading that “The Carrier shall in no case be responsible for loss of or damage to the cargo, howsoever arising … in respect of deck cargo”

2- the provision on page 2 of the Bill of Lading that the 70 packages identified on the attached list were “loaded on deck at shipper’s and/or consignee’s and/or receiver’s risk; the carrier and/or Owners and/or Vessel being not responsible for loss or damage howsoever arising”.

Owners argued that these two provisions must be interpreted as excluding all liability for carriage of deck cargo, including liability for negligence and unseaworthiness.. The phrase “howsoever arising”, which appeared in each of the clauses referred to all causes of loss or damage. The Owner relied on the decisions of Saville J,  Langley J and Hamblen J in The Danah [1993] 1 Lloyd’s Rep 351, The Imvros [1999] 1 Lloyd’s Rep 848 and The Socol 3 [2010] 2 Lloyd’s Rep 221, respectively.

Stephen Hofmeyr QC, sitting as a Judge of the High Court agreed. Nothing in the authorities to justify departing from that point of construction. The same or similar words of exclusion have been held to be effective to exclude both liability for negligence causing the loss of cargo (Travers v Cooper [1915] 1 K. B. 73 and  [1993] 1 Lloyd’s Rep. 351) and liability for unseaworthiness causing the loss of cargo (The Imvros). It would be difficult to imagine words of exemption which are wider in effect than “howsoever caused”. Over the last 100 years, they had become “the classic phrase” whereby to exclude liability for negligence and unseaworthiness. Accordingly on a true construction of the Bill of Lading, the Owner was not liable for any loss of or damage to any cargo carried on deck, including loss of or damage to any cargo carried on deck caused by the unseaworthiness of the Vessel and/or the Owner’s negligence.

“My wife may capture my heart”. Off hire and capture by pirates.

 

Owners time chartered the “Eleni P” on an amended NYPE 1946 form and during a voyage from Ukraine to China the vessel was routed via the Suez Canal and the Gulf of Aden. After transiting the Gulf of Aden without incident she was attacked and captured by pirates in the Arabian sea and released some seven months later.

Owners claimed US$ 4.5 million hire for this period. The Tribunal rejected the claim on the grounds that two additional typed clauses, clauses 49 and 101, excluded it. Owners appealed in respect of the correct construction of each pursuant to s69 of the Arbitration Act 1996. In Eleni Shipping Limited v Transgrain Shipping BV (“The ELENI P”) [2019] EWHC 910 (Comm) Popplewell J held that the appeal succeeded in respect of clause 49, but failed in respect of clause 101.

Clause 49 – Capture, Seizure and ArrestShould the vessel be captures [sic] or seized or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended for the actual time lost […]

Owners contended before Popplewell J that Clause 49 only applied when the Vessel was captured, seized, detained or arrested by any authority or any legal process – it therefore did not apply to capture by pirates. Charterers argued that only the word “arrested” was qualified by the phrase “by any authority or by any legal process” andnot  the word “captured” , and therefore as a matter of ordinary language, the Vessel had been captured.

Popplewell J held that the clause only applied to capture by an authority or legal process, and therefore not to capture by pirates. The words “any authority or any legal process” applied to the whole preceding list of events. To limit it to arrest would be superfluous. The tribunal had stated that ‘capture’ was not something that an ‘authority’ could be involved with. Not so, Popplewell J stating “capture does not necessarily connote the use of force. Unoccupied land or undefended goods may be captured. My wife may capture my heart. I see no difficulty as a matter of the ordinary use of language in the concept of a governmental authority or ruler capturing a vessel.”

Clause 101 – Piracy ClauseCharterers are allowed to transit Gulf of Aden any time, all extra war risk premium and/or kidnap and ransom as quoted by the vessel’s Underwriters, if any, will be reimbursed by Charterers. […] In case vessel should be threatened/kidnapped by reason of piracy, payment of hire shall be suspended. It’s remain understood [sic] that during transit of Gulf of Aden the vessel will follow all procedures as required for such transit including but not limited the instructions as received by the patrolling squad in the area for safe participating to the convoy west or east bound.

Did the suspension of hire only operate if the vessel were threatened or kidnapped by reason of piracy while transiting the Gulf of Aden, as owners argued, or did it operate wherever the Vessel was threatened in the Gulf of Aden or as an immediate consequence of her transiting or being about to transit the Gulf, a charterers argued? The Tribunal had accepted charterers’ argument and so did Popplewell J. The purpose of the Clause was to allocate the risks associated with such trade, not solely within a specifically defined geographical area. Its first sentence allocates the burden of an extra war risk premium and the sentence concerning hire suspension allocates the risk of delay from detention as a consequence of the transit which the first sentence requires.

Accordingly, owners were unable to claim hire for the seven months during which the vessel was held by the pirates.

Brandt v Liverpool implied contract falls outside art. 25 of Brussels Regulation (Recast).

 

In Pan Ocean Co. Ltd v China-Base Group Co. Ltd & Anor [2019] EWHC 982 (Comm) (16 April 2019) Christopher Hancock QC (Sitting as a Judge of the High Court) has held that an implied contract arising out of the conduct of the parties at the port of discharge did not fall within art.25 of the Brussels Regulation (Recast) 2012.

A cif contract was concluded between Gunvor and China-Base, loadport to be any port in Indonesia, Malaysia, or the Philippines with delivery in China.  A bill of lading was issued recording the loading of about 36,360 mt of light cycle oil and gas oil at Zhoushan, China and Taichung, Taiwan. Pan Ocean, the demise charterer of the vessel voyage chartered the vessel to Clearlake shipping a company said to be associated with Gunvor. The charterparty provided for English law and Jurisdiction. Pan Ocean issued bills of lading which accurately reflected the loadports and nature of the cargo and the vessel then loaded further cargo of gasoil in the Philippines. No bills of lading were issued for this cargo but in accordance with Clearlake’s instructions, it is said that an agent of Pan Ocean issued switch bills of lading falsely naming the loadport for the entire cargo as Subic Bay, Philippines and mis-describing the entire cargo as light cycle oil. The Vessel discharged the cargo into bonded shore tanks in Nansha, China. China-Base/Beihai neither presented any bills of lading nor gave any letter of indemnity to Pan Ocean or their agents. The cargo was impounded by the Chinese authorities on grounds of customs irregularities.

The buyers arrested the vessel in Singapore claiming damages for alleged misrepresentations in the cargo documentation. The demise charterers sought an anti-suit injunction in the English High Court to prevent the buyers proceeding with their claim in Singapore and claimed that the English court had exclusive jurisdiction over their claim under art. 25(1) of the Brussels Regulation (Recast) which provides

  1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing;

(b) in a form which accords with practices which the parties have established between themselves; or

(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.”

The demise charterers argued that an implied contract had come into existence between themselves and the buyers at the discharge port on the terms of the bill of lading. The Judge addressed this issue on the assumption that there was an implied contract between the parties. He held that although the bill of lading which would constitute the terms of the putative implied contract was in writing, the agreement itself had to be in writing in accordance with Art 25(1)(a) ““The agreement conferring jurisdiction shall be … (a) in writing or evidenced in writing”).” This was not the case where the agreement contended for was an implied contract based on the actions of the parties in taking delivery of the cargo at the port of discharge.

Had it been established that the English court had exclusive jurisdiction, the court, applying the approach laid down in Ecobank v. Tanoh [2016] 1 WLR 2231. would not have granted an interim anti-suit injunction. The application for an injunction had neither been sought promptly, nor before the proceedings were too far advanced. Over 9 months had passed since the warrant of arrest in Singapore was served, with several hearings in Singapore during that period.

IISTL Member to present paper at ASDEM’s 14th International Oil Industry Laytime and Demurrage Conference on 16/17 May

 

 

IISTL member Professor Simon Baughen will be presenting a paper “LEGAL ISSUES OF DEMURRAGE AND PUMPING WARRANTIES” at Asdem’s 14th International Oil Industry Laytime and Demurrage Conference on 16/17 May at the Le Meridien Piccadilly Hotel in London.

Pumping warranties are the norm in tanker charters and apply a separate laytime and demurrage regime to the period of discharge, and sometimes to the period of loading as well. They have also generated many disputes between owners and charterers as to how this separate regime operates and how it fits in with the demurrage time bar clauses that are invariably found in tanker charters. Professor Baughen will be looking at the pumping clauses found in oil charterparties from the wide range of additional clauses that are necessary for Asbatankvoy to the standard warranties in widely used modern forms and examining the legal issues they give rise to.

The full speaker line-up and topic list for this event, can be found in Asdem’s brochure which you can download by clicking here.

To register immediately on-line, please click here.

 

 

 

 

 

From Borstal boys to Parent Companies. Tort liability for the acts of third parties.

 

2017 saw three ‘anchor defendant’ cases before the High Court involving tort claims against a UK parent corporation in respect of the activities of its overseas subsidiary. The claimants sought leave to serve the subsidiary out of the jurisdiction under the ‘necessary and proper party’ gateway for service out of the jurisdiction in paragraph 3.1 of Practice Direction 6B in the Civil Procedure Rules (“CPR”). In two cases, AAA v Unilever and Okpabi v Shell, leave was refused but was granted in the third case, Vedanta Resources PLC and another v Lungowe. The key issue was whether there was a triable issue against the UK parent corporation. Lungowe involved alleged pollution from toxic emissions from a copper mine in Zambia owned by a Zambian company, KCM, whose ultimate parent company is Vedanta Resources Ltd which is incorporated and domiciled in the UK.

The Supreme Court, [2019] UKSC 20, in which Lord Briggs gave the lead judgment, has upheld the findings at first instance and in the Court of Appeal that there was a triable issue as regards Vedanta on the basis of a plausible case that its involvement in the activities of KCM gave rise to a duty of care to those affected by those activities.

There were four issues before the Supreme Court on which the claimants succeeded on 1,2, and 4 but not on 3.

(1) whether it is an abuse of EU law to rely on article 4 of the Recast Brussels Regulation for jurisdiction over Vedanta as anchor defendant so as to make KCM a “necessary or proper party”.

The EU case law suggests that the abuse of law doctrine is limited to situations where EU law is invoked collusively to subvert other EU provisions. In light of the decision in Owusu v Jackson (C-281/02) [2005] QB 801 (CJEU), arguments based on forum conveniens cannot justify derogating from the primary rule of jurisdiction in article 4.1 The concern about the wide effect of article 4.1 in this case is best addressed under the domestic law on the “necessary or proper party” gateway.

(2) whether the claimants’ pleaded case and supporting evidence disclose no real triable issue against Vedanta

The assertion that the negligence claim against Vedanta raises a novel and controversial legal issue was misplaced, as the liability of parent companies in relation to the activities of their subsidiaries is not, in itself, a distinct category of negligence unsuited to summary determination. The relevant principles for determining whether A owes a duty of care to C in respect of the harmful activities of B are not novel and can be traced back to the decision of the House of Lords in Dorset Yacht Co Ltd v Home Office [1970] AC 1004, the case involving Home Office responsibility for damage caused by absconding borstal boys when they boarded a yacht and collided with the plaintiff’s yacht. The duty  would arise from a sufficiently high level of supervision and control of the activities  at the mine with sufficient knowledge of the propensity of those activities to cause toxic escapes into the surrounding watercourses. This was a question for Zambian law, which it was agreed followed English tort law, but the question what that level actually was is a pure question of fact. On the facts, there was sufficient material identified by the judge in support of the view that the claimants’ case was arguable and the judge made no error of law in assessing this issue, so his decision on the negligence claim must stand.

The Judge had identified the following evidence as establishing that there was an arguable case that Vedanta owed a duty of care. There was part of the published material, namely a report entitled “Embedding Sustainability” which stressed that the oversight of all Vedanta’s subsidiaries rested with the board of Vedanta itself, and which made particular reference to problems with discharges into water and to the particular problems arising at the Mine. There was the management services agreement between Vedanta and KCM , and a witness statement of Mr Kakengela.

Lord Briggs stated[61]:

“For my part, if conducting the analysis afresh, I might have been less persuaded than were either the judge or the Court of Appeal by the management services agreement between the appellants, or by the evidence of Mr Kakengela. But I regard the published materials in which Vedanta may fairly be said to have asserted its own assumption of responsibility for the maintenance of proper standards of environmental control over the activities of its subsidiaries, and in particular the operations at the Mine, and not merely to have laid down but also implemented those Page 23 standards by training, monitoring and enforcement, as sufficient on their own to show that it is well arguable that a sufficient level of intervention by Vedanta in the conduct of operations at the Mine may be demonstrable at trial, after full disclosure of the relevant internal documents of Vedanta and KCM, and of communications passing between them.”

(3) whether England is the proper place in which to bring the claims;

The domestic law ‘proper place’ test requires a search is for a single jurisdiction in which the claims against all defendants may most suitably be tried. The courts have treated the risk of irreconcilable judgments as a decisive factor in favour of England as the proper place for the claim against the non-EU defendant as well. The judge in this case applied that approach but that was a legal error in circumstances where Vedanta had by the time of the hearing offered to submit to the Zambian jurisdiction, so that the whole case could be tried there. The risk of irreconcilable judgments would be the result of the claimants’ choice to exercise their article 4 right, rather than because Zambia is not an available forum for all the claims. The risk of irreconcilable judgments was still a relevant factor but was no longer a trump card such that the judge made an error of principle in regarding it as decisive. Looking at the relevant connecting factors in the round, Zambia would plainly have been the proper place for this litigation as a whole, provided substantial justice was available to the parties in Zambia

(4) if Zambia would otherwise be the proper place, whether there was a real risk that the claimants would not obtain access to substantial justice in the Zambian jurisdiction.

Even if the court concludes that a foreign jurisdiction is the apparently the proper place, the court may still permit service of English proceedings on the foreign defendant if cogent evidence shows that there is a real risk that substantial justice would not be obtainable in that foreign jurisdiction. In this case, the judge identified two “access to justice” issues in Zambia First, the practicable impossibility of funding such group claims where the claimants are all in extreme poverty, because they could not obtain legal aid and because conditional fee agreements (CFAs) are unlawful in Zambia. Secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable effective litigation of this size and complexity, in particular against a well-resourced opponent like KCM.

The claims will now proceed against the parent company and its Zambian subsidiary in the English High Court.

PM gets extension to article 50.

 

The EU last night agreed to extend the period referred to in Article 50 as follows.

Conclusions – 10 April 2019
EUCO XT 20015/19 1
EN
1. The European Council takes note of the letter of Prime Minister Theresa May of 5 April 2019 asking for a further extension of the period referred to in Article 50(3) TEU.
2. In response, the European Council agrees to an extension to allow for the ratification of the Withdrawal Agreement. Such an extension should last only as long as necessary and, in any event, no longer than 31 October 2019. If the Withdrawal Agreement is ratified by both parties before this date, the withdrawal will take place on the first day of the following month.
3. The European Council underlines that the extension cannot be allowed to undermine the regular functioning of the Union and its institutions. If the UK is still a Member of the EU on 23-26 May 2019 and if it has not ratified the Withdrawal Agreement by 22 May 2019, it must hold the elections to the European Parliament in accordance with Union law. If the United Kingdom fails to live up to this obligation, the withdrawal will take place on 1 June 2019.
4. The European Council reiterates that there can be no opening of the Withdrawal Agreement, and that any unilateral commitment, statement or other act should be compatible with the letter and the spirit of the Withdrawal Agreement and must not hamper its implementation.
5. The European Council stresses that such an extension cannot be used to start negotiations on the future relationship. However, if the position of the United Kingdom were to evolve, the European Council is prepared to reconsider the Political Declaration on the future relationship in accordance with the positions and principles stated in its guidelines and statements, including as regards the territorial scope of the future relationship.
6. The European Council notes that, during the extension, the United Kingdom will remain a Member State with full rights and obligations in accordance with Article 50 TEU, and that the United Kingdom has a right to revoke its notification at any time.

 

Accordingly, provided Parliament approves the necessary statutory instrument to amend ‘exit day’ in the EU Withdrawal Act 2018 in time, the UK will not leave the EU at 11pm  on 12 April 2019. The requisite SI is The European Union (Withdrawal) Act 2018 (Exit Day)
(Amendment) (No. 2) Regulations 2019.