Court rules villagers cannot sue Shell in London over Nigerian oil spill

[January 26, 2017]  By Karolin Schaps

LONDON (Reuters) - Oil major Royal Dutch Shell cannot be sued in London courts over Nigerian oil spill allegations, the High Court ruled on Thursday, dealing a setback to attempts to hold multinationals liable at home for subsidiaries' activities.

If the High Court had ruled in favor of the two groups, other claimants against British-based multinationals could have been emboldened to pursue legal action through the British courts, some legal experts had said.

Villagers from the Bille and Ogale communities in Nigeria's oil-rich Delta region were trying to pursue oil spill allegations against the company's Nigerian subsidiary Shell Petroleum Development Company of Nigeria (SPDC) in British courts.

The court ruled that the suit did not establish that Shell, the parent company, had legal responsibility for SPDC's actions.

"The claimants have failed to demonstrate that the first threshold requirement – is there a 'real issue' between the claimant and the anchor defendants – is met," the ruling stated.

Leigh Day, a law firm representing the villagers, said it would appeal the ruling.

Igo Weli, SPDC's general manager for external relations, said the firm hoped "the strong message sent by the English court today ensures that any future claims by Nigerian communities concerning operations conducted in Nigeria will be heard in the proper local courts".

The Nigerian villagers argued domestic courts were unfit to hear their case, while Shell said the matter was a uniquely Nigerian issue and should be heard there.

Shell also denies responsibility for the spills, which it says were due to sabotage and illegal refining.

"It is our view that the judgment failed to consider critical evidence which shows the decisive direction and control Royal Dutch Shell exercises over its Nigerian subsidiary," said Dan Leader, partner at Leigh Day who also represented Nigeria's Bodo community in another oil spill claim against Shell that ended in a $55 million settlement in 2015.

Last year, the High Court ruled that a case brought by Zambian villagers against miner Vedanta Resources over environmental pollution could be heard in England.

(Reporting By Karolin Schaps; editing by Susan Thomas and Adrian Croft)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.