Lungowe & Ors v Vedanta Resources Plc & Anor

Forum non conveniens cannot justify staying proceedings against a defendant domiciled in England where Owusu v Jackson applies. The court nevertheless retains case-management powers to stay proceedings in rare and compelling circumstances, although those powers should not be used where a genuine claim remains viable.

For service out under the necessary or proper party gateway, the claimant must establish a real prospect of success against the foreign defendant, a real issue with the English defendant which it is reasonable for the court to try, and that the foreign defendant is a necessary or proper party. The overall question is whether England is the proper place for the claim. Existing proceedings against an English-domiciled defendant may make England the appropriate forum where otherwise identical claims would otherwise require parallel trials. Lack of effective funding and representation abroad may independently establish that justice cannot be obtained there.

1,826 Zambian claimants alleged personal injury, property damage and related losses caused by pollution from the Nchanga copper mine in Zambia. The mine was owned and operated by Konkola Copper Mines Plc, a Zambian company, while Vedanta Resources Plc was its United Kingdom-domiciled parent.

Vedanta applied for a stay and jurisdictional relief. KCM applied to set aside permission to serve it out of the jurisdiction or alternatively to stay the claims. The central issues were whether the claims against Vedanta were genuine, whether KCM was a necessary or proper party, and whether England or Zambia was the proper forum, including whether the claimants could obtain access to justice in Zambia.

1. Vedanta. The applications were dismissed. Article 4 of the Recast Brussels Regulation, as interpreted in Owusu v Jackson, required the English court to exercise jurisdiction over Vedanta. The factual differences between the present group litigation and Owusu v Jackson did not permit departure from binding authority. A possible criticism of the reasoning in Owusu v Jackson did not affect its binding result.
2. The court retained case-management powers which could, in an appropriate case, justify a stay notwithstanding Owusu v Jackson. Such cases would involve rare and compelling circumstances. They were not present because the claims against Vedanta raised a real issue to be tried, were not a device or fraudulent use of domicile, and were intended to proceed.
3. KCM gateway. The claim against KCM had a real prospect of success. KCM operated the mine, toxic discharges were recorded, and at least some statutory claims imposed strict liability. The absence of individual particulars did not defeat the threshold at this interlocutory stage.
4. A parent company may arguably owe a duty of care in negligence for harm caused by a subsidiary’s operations. The claimant must satisfy the Caparo v Dickman test. The four factors identified in Chandler v Cape were relevant indicators, but they were not rigid preconditions and the court should not conduct a mini-trial. The claims against Vedanta were arguable in both English and Zambian law.
5. It was reasonable for the English court to try the issue against Vedanta. KCM was a necessary or proper party because the claims involved the same facts, legal principles, causation and loss, and required one investigation.
6. Viewed in isolation, Zambia was plainly the natural forum. However, the continuing English proceedings against Vedanta were a highly significant factor. Requiring two trials on opposite sides of the world concerning the same facts was unacceptable. England was therefore the proper place for the claims against KCM.
7. In any event, the evidence showed that the claimants would almost certainly lack access to justice in Zambia. They could not realistically fund complex group litigation; conditional fee agreements were unlawful; legal aid was unavailable in practice; suitable lawyers and litigation funding had not been identified; and the history of comparable litigation supported the conclusion that effective justice would not be obtained there.

Vedanta’s and KCM’s applications were dismissed. Consequential matters were reserved.