Vedanta Resources PLC and Another v. Lungowe and Others

Nature of the Case

United Kingdom (UK) Supreme Court decision upholding jurisdiction and potential liability of a UK parent company in connection with alleged actions of a Zambian subsidiary company that took place in Zambia.

Enforcement of the Decision and Outcomes

Now that the Supreme Court has decided that the case can proceed in the English courts in relation to both Vedanta Resources and KCM, the parties can proceed to a full trial of the issues. According to the Supreme Court [94], “[i]n the absence of any admissions from the appellants which might serve to narrow the issues (and there are none), large aspects of the claimants’ collective and individual claims will depend upon the presentation of expert evidence. They will include identifying the emissions which actually occurred, and their toxicity, establishing whether the system of operation of the Mine (both in its planning and implementation) fell short of that requisite to satisfy a duty of care, tracing the emissions through to watercourses in the vicinity of the claimants, proving (during a considerable period of time) that these emissions caused damage to particular claimants’ land, business and health, and quantifying (save perhaps in relation to personal injuries) the diminution in the value of business and property thereby caused.”

In a joint statement issued on 18 January 2021, the parties announced: “Without admission of liability, Vedanta Resources Limited and Konkola Copper Mines Plc confirm that they have agreed, for the benefit of local communities, the settlement of all claims brought against them by Zambian claimants represented by English law firm Leigh Day.” The settlement amount has not been disclosed.

Significance of the Case

This case is significant for UK parent companies with subsidiaries operating in other parts of the world. It is now possible for such companies to face liability in the UK for environmental harms caused by their foreign subsidiaries. Crucially, parent companies can be held liable for assuming responsibility in respect of the activities of foreign subsidiaries. The case establishes that parent company liability is not a novel extension of the law of negligence. A parent company may be held to have assumed responsibility for activities of a foreign subsidiary where: a defective policy or inadequate guidance issued by the parent company results in harm to third parties; where a parent company is responsible for the training supervision and enforcement of policies relating to a subsidiary’s activities; and where a parent company holds itself out as exercising supervision and control of a subsidiary’s activities but fails to do so.

For their contributions, special thanks to ESCR-Net member: the Program on Human Rights and the Global Economy (PHRGE) at Northeastern University.

Groups Involved in the Case

• Members International Commission of Jurists and Corporate Responsibility (CORE) Coalition filed a written intervention in the case