Okpabi v Royal Dutch Shell plc
Nigerian communities had an arguable case that the parent company of the Shell group owed them a duty of care for oil spills by its Nigerian subsidiary, applying Vedanta.
Facts
Over 40,000 Nigerian citizens claimed that their land and water had been polluted by oil spills from pipelines operated by the Shell Petroleum Development Company of Nigeria, a subsidiary of Royal Dutch Shell, the parent company of the Shell group based in England. They sued both companies in England, arguing that the parent company owed them a duty of care because of its control over the subsidiary's operations. The Court of Appeal held that there was no arguable case against the parent.
Legal principle
The Supreme Court held that there was a real issue to be tried as to whether the parent company owed a duty of care, so the claims could proceed in England. Lord Hamblen said that the Court of Appeal had wrongly conducted a mini trial at the jurisdiction stage, and had wrongly treated the issue of the parent company's duty as depending on whether it controlled the subsidiary. Applying Vedanta, the question is the extent to which the parent took over, intervened in, controlled, supervised or advised on the management of the relevant operations, and the issuing of group wide policies and standards may be relevant.
Related cases on separate legal personality and the corporate veil
- Adams v Cape Industries plc [1990] Ch 433
- Chandler v Cape plc [2012] EWCA Civ 525, [2012] 1 WLR 3111
- Re Darby, ex p Brougham [1911] 1 KB 95
- DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852
- Gilford Motor Co Ltd v Horne [1933] Ch 935
- Jones v Lipman [1962] 1 WLR 832
- Lee v Lee's Air Farming Ltd [1961] AC 12
- Macaura v Northern Assurance Co Ltd [1925] AC 619
Studying company law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.
This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
