Vedanta v Lungowe Symposium Wrap Up

[Carlos Lopez is a Senior Legal Adviser at the International Commission of Jurists.]

Claire Bright has nicely concluded the series of blogs in this online symposium on the legal and policy implications of the UK Supreme Court judgment on jurisdiction in Vedanta v Lungowe. It is time now to close the symposium and gratefully acknowledge the participants (Robert McCorquodale, Doug Cassel, Anil Yilmaz, Gabrielle Holly, Lucas Roorda and Claire Bright) and our hosts, the International Commission of Jurists and opinio juris for providing the opportunity and the space for a first legal exchange on the judgment’s contents and their implications.

As expected from the highest court in the UK, the Vedanta judgment has not disappointed, and many are able to find in it a rich angle or argument that deserves commentary for its potential general implications. It is in many ways, a seminal judgment that will be surely be referred to by future decisions. Doug Cassel has rightly labeled it “the most important judicial decision in the field of business and human rights since the jurisdictional ruling of the United States Supreme Court in Kiobel v Royal Dutch Petroleum in 2013”, and despite the cautionary or critical stances on issues of access to justice, pointed out by Gabrielle Holly and Lucas Roorda, Cassel might be right. Not least because this is “the first decision by any superior court in the world directly on this issue.” (McCorquodale)

Indeed, it is in its clarification of the applicable standard of duty of care of parent companies in respect to the external stakeholders of their subsidiaries where the main substantive contribution of the Vedanta judgment lies. The flexibility of the duty of care standard formulated by the UKSC makes it potentially applicable also to supply chain relationships, where the position of the buyer/lead company is not dissimilar from the position of a parent company in Vedanta, as Anil Yilmaz brilliantly explains in her blog.

Some commentators –within or outside this symposium- have expressed certain disappointment that the Court did not explicitly address the UN Guiding Principles, or the amicus submission by ICJ and CORE Coalition where the Guiding Principles and other international material was amply referenced. Still, the judgment is almost unanimously viewed as going in broadly the same direction as the amicus submission and the UNGPs. The identified tensions with some of the UNGP’s recommendations to companies to carry out due diligence in their global operations and the unintended effect of the Vedanta decision in encouraging a hands off approach by parent companies will hopefully be brushed away by further evolution and clarification of international standards in this field.

The (re)introduction of a “proper place” (or forum conveniens) analysis is seen as problematic, along with the perceived creation of (yet) another evidentiary burden for complainants to demonstrate they risk to be denied substantial justice in the alternative forum. Claire Bright regards this as a contradictory approach by the Court, also drawing –together with Lucas Roorda – parallels with forum necessitatis requirements. However, practice will tell how much of a hurdle the “forum conveniens” and substantial justice analysis represents for claimants and the general cause of access to justice. In my view, the substantial justice analysis used by the UKSC as determinant for the decision on the proper place to try a case, is a flexible one. Not dissimilar from the analysis of the Ontario Court of Appeal in Garcia v Tahoe Resources, where the Court, dealing with a forum non conveniens motion, decided that the lack of discovery procedures in Guatemala civil law system “points away from finding that Guatemala is clearly the more appropriate forum for bringing tort claims against a British Columbia corporate defendant…” (at 80). A well-trained and resourceful lawyer for complainants may be always able to argue, on the same or other grounds as Vedanta or Tahoe, that the forum of the host country is not one that guarantees substantial justice.