LONDON Royal Dutch Shell cannot be sued in London over oil spills in Nigeria, the High Court ruled on Thursday, in a setback to attempts to hold British multinationals liable at home for their subsidiaries' actions abroad.
Villagers from the Bille and Ogale communities in the oil-producing Niger Delta in southern Nigeria had said they were affected by pollution and had sought to take action against Shell in London rather than its subsidiary in Nigeria.
If the High Court had ruled in favor of the claimants, others could have been encouraged to pursue legal action against British-based multinationals through the British courts, legal experts have said.
The court ruled that Shell, as the parent company, does not have legal responsibility for its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria (SPDC), which is jointly operated with the Nigerian government.
The judge, Justice Fraser, said: "There is simply no connection whatsoever between this jurisdiction and the claims brought by the claimants, who are Nigerian citizens, for breaches of statutory duty and/or in common law for acts and omissions in Nigeria, by a Nigeria company."
The court also said the claimants should be able to use Nigerian courts, which are now delivering quicker verdicts.
The villagers argued that Nigerian courts were unfit to hear their case, but Shell said the matter was a uniquely Nigerian issue and should be heard there.
Leigh Day, the law firm representing the villagers, said they would appeal against the ruling.
"My clients are very confident they will succeed in an appeal," said Leigh Day partner Daniel Leader, who also represented Nigeria's Bodo community in another oil spill claim against Shell that ended in a $55 million settlement in 2015.
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".
Shell also denies responsibility for the spills, which it says were due to sabotage and illegal refining.
Activists said the judgment would unfairly allow Shell to avoid responsibility for its subsidiary's actions.
"This is an unfair judgment. What has happened in London is that Shell has been given power to do whatever with impunity in Nigeria," said Celestine Akpobari, an activist in Ogaliland, where the claimants come from.
Last year, the High Court ruled that a case brought by Zambian villagers against mining company Vedanta Resources over environmental pollution could be heard in England.
Vedanta has appealed the ruling.
(Additional reporting by Tife Owolabi in Yenagoa; editing by Susan Thomas, Adrian Croft and Giles Elgood)