Energy

London judges reverse course to reopen $7 bln Brazil dam lawsuit against BHP

4 minute read
  • Senior judges say appeal has "real prospect of success"
  • Claimants' lawyers hail ruling as "monumental judgment"
  • BHP says proceedings do not belong in UK
  • 2015 dam failure caused Brazil's worst environmental disaster

LONDON, July 27 (Reuters) - London's Court of Appeal made a U-turn on Tuesday by agreeing to reopen a $7 billion lawsuit by 200,000 claimants against Anglo-Australian mining giant BHP (BHP.AX), (BHPB.L), reviving a case over a dam rupture behind Brazil's worst environmental disaster.

Lawyers for one of the largest group claims in English legal history have been pushing to resurrect the 5 billion pound ($6.9 billion) lawsuit against BHP since a lower court struck out the lawsuit as an abuse of process last year - and a Court of Appeal judge upheld that decision in March. read more

But in a highly unusual move, three Appeal Court judges on Tuesday reversed course and granted permission for an appeal, saying they believed it had a "real prospect of success".

The collapse in 2015 of the Fundao dam, owned by the Samarco venture between BHP and Brazilian iron ore mining giant Vale (VALE3.SA), killed 19 and obliterated villages as a torrent of more than 40 million cubic metres of mining waste swept into the Doce river and Atlantic Ocean over 650 km (400 miles) away.

Tom Goodhead, a PGMBM managing partner who is bringing the claim on behalf of Brazilian individuals, businesses, churches, organisations, municipalities and indigenous people, called it a "monumental judgement".

Frederico de Assis Faria, Attorney General of Brazil's hard-hit district of Mariana, said victims now had "an opportunity for real justice" six years after the disaster.

BHP, the world's largest mining company by market value, has labelled the case pointless and wasteful, saying it duplicates proceedings in Brazil and the work of the Renova Foundation, an entity created by the company and its Brazilian partners to manage reparations and repairs.

"BHP's position remains that the proceedings do not belong in the UK," it said in a statement.

The debris of the municipal school of Bento Rodrigues district, which was covered with mud after a dam owned by Vale SA and BHP Billiton Ltd burst, is pictured in Mariana, Brazil, November 10, 2015. REUTERS/Ricardo Moraes/File Photo

Contacted in Brazil, Vale declined comment.

'GOOD DAY FOR JUSTICE'

The case was revived after PGMBM in April applied for an oral Court of Appeal hearing - reserved only for exceptional cases - and argued the appeal judge had not properly grappled with arguments about why the case should proceed. read more

Martyn Day, the Leigh Day lawyer who has taken on miner Vedanta and oil giant Shell (RDSa.L) in English courts on behalf of villagers over alleged pollution in Zambia and oil spills in the Niger delta respectively, welcomed the ruling.

"It is highly unusual for the Court of Appeal to use this mechanism (of an oral hearing) for reviewing a decision of a fellow member of the court," he said. "A good day for justice."

Claimant lawyers have argued that most of their clients have not brought proceedings in Brazil, that they are entitled to sue BHP in England and that Brazilian litigation is so lengthy that it cannot provide full redress in a realistic timeframe.

The lawsuit is the latest battle to establish whether multinationals can be held liable for the conduct of overseas subsidiaries on their home turf.

The appeal is expected to be heard next year and any ruling is likely to be further appealed to the Supreme Court in London.

Reporting by Kirstin Ridley; Editing by Kirsten Donovan and Edmund Blair

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