How Can I Bring a Civil Claim Against a Business in a Foreign Court?

Taking legal action in courts in other countries can be useful when courts in your country are unable to solve your issue.

Here are some possible reasons why this might be the case:

• Corruption in your country could make it difficult to enforce the law against powerful businesses with influence on the legal and political system.
• Courts and law enforcement bodies in your country may be too weak to force big businesses to pay compensation or respect the law.
• There may be legal barriers to securing corporate liability in your country.
  • One example is stabilisation clauses in investment contracts in bilateral investment treaties where your country has agreed to preserve the legal rights and obligations of the TNC as they appear at the time of entering into the contract. This can restrict regulations, human rights and environmental reforms that negatively impact TNCs’ business activities.
• The assets of the company or the parent company may be based in another country, making it difficult for you to take them to court in your country.

In contrast, courts in other countries may be stronger and better equipped to force the company to change its actions or pay compensation.

Foreign courts are particularly useful when taking cases against:

• Parent companies in TNCs; and
• Companies in the global supply chains that operate or are based outside your country

Practical Tip: Business and Human Rights Resource Centre Case Database
Check if similar cases have been taken or are being taken in your country or in the courts where the TNC is based or has operations.

(a) Using Foreign Courts to Hold Parent Companies in TNCs Accountable

Although it may appear that a local subsidiary is responsible for the human rights abuse, it could be possible to take legal action against the parent company.

Taking a claim against a parent company of a TNC can be difficult in the country where the subsidiary operates:

• Courts might not have jurisdiction to hear cases against companies that are based elsewhere.
• The assets of the TNC may be based in the company where the parent company is, making it difficult to get compensation in the country where subsidiaries operate.

Generally, if you want to bring a case against a parent company, you have to show that:

• The parent company is directly liable as the principal wrongdoer. This is where the subsidiary acts as the agent of the parent (or its alter ego) for the purposes of the actions leading to the harm making the acts of the subsidiary effectively the acts of the parent company, due to the degree of direct control the parent has exercised over those acts.
• The parent company is jointly responsible with the subsidiary for the alleged human rights abuse. This is where both the parent and subsidiary are involved in the actions leading to the harm and the parent would be liable for its own harmful actions.

You don’t have to choose between taking a case against a subsidiary or parent company. It may be possible to claim against the subsidiary and the parent in the same case, so as to attach liability to the assets of the corporate group as a whole.

But, it can be difficult to show that the parent company is directly or jointly responsible for the acts of its subsidiaries and courts are often reluctant to establish the parent’s liability merely because it owns the subsidiary. Evidence of control over the actions leading to the harm must be shown. This can be difficult because of the legal separation between the parent and subsidiary.

To show a parent company controls a subsidiary, it can be useful to show:

• That the subsidiary is closely managed and directed by the parent company
• The parent company owns the majority of the shares of the subsidiary
• The parent company knew or should have known what the subsidiary was doing
• The same internal rules and policies govern the parent and subsidiaries

If the court finds that the parent company has some control over the subsidiary’s operations but not enough to be directly or jointly responsible, the court could find that a parent company owes a direct duty of care to individuals harmed by actions of the subsidiary company.

Example: Lungowe v Vedanta (UK)
Zambian farmers are suing UK parent company Vedanta Resources plc and its Zambian subsidiary Konkola Copper Mines Plc (KCM) in the UK courts.

The claimants argue that Vedanta had a sufficient level of control or supervision over mining operations in Zambia to owe them a direct duty of care, which Vedanta then breached by failing to prevent toxic mining waste from entering local water sources and harming local communities and their environment.

In April 2019, the UK Supreme Court ruled the UK courts have jurisdiction to hear the claims against Vedanta and KCM for negligence in tort and breach of a statutory duty, even though the harm occurred in Zambia.

The court held that the claim against KCM has a real prospect of success and that it’s arguable that Vedanta assumed responsibility for relevant aspects of KCM’s operations and so may owe the claimants a duty of care. The court noted that Vedanta not only had environmental standards relating to subsidiary activities but also oversaw implementation through training and monitoring.

Example: Dooh v. Royal Dutch Shell plc (The Netherlands)
With the help of a Dutch NGO and law firm, a group of Nigerian farmers whose livelihoods had been destroyed by oil pollution in the Niger Delta brought a legal case in The Netherlands against Royal Dutch Shell and its Nigerian subsidiaries.

The Court of Appeal has accepted jurisdiction because Shell is itself arguably liable for the alleged negligence of the Nigerian subsidiary as it may have been actively involved in the subsidiary’s operations.

This is more likely where the parent has taken active steps to supervise, monitor or otherwise indicate that is has assumed responsibility for the relevant aspects of its subsidiary’s operations.

(b) Using Foreign Courts to Hold Companies Accountable in Global Supply Chains

Foreign courts may also need to be involved in cases against different companies along the GVC – here the link between the firms involved may be contractual.

Companies at the top of the supply chain often do not operate in your country where the harm is caused. This means you may have to take cases in the foreign countries where lead companies are based or operate.

Example: Jabir v KiK (Germany)
In a case before the German courts, survivors and family members of victims of a fire in a textile factory in Pakistan alleged that KiK Textilien und Non-Food GmbH (KiK), a German textile retailer and customer of the factory, was negligent in tort for not ensuring adequate fire safety precautions at the factory.

The claimants argued that KiK owed them a duty of care on the basis that it controlled factory conditions and assumed responsibility for safety management.

The claim was dismissed on the basis that the case was time-barred by the law in Pakistan, the applicable law in this case (see below).

Although it can be difficult, this example shows it is possible  to prove that a lead firm should take some responsibility for the human rights abuses of sub-contractors along the supply chain and perform human rights due diligence upon their activities.

• This usually follows from legislation that creates due diligence obligations on businesses to monitor their supply chains.

Example: Australia’s Illegal Logging Prohibition Act
This law requires businesses to conduct due diligence by way of a verification and certification process and imposes civil and criminal penalties on an importer or processor who “intentionally, knowingly or recklessly imports or processes illegally logged timber”.

For more information on national mandatory due diligence laws, see “Do Businesses Have Human Rights Responsibilities?”

To take a case against a business in the courts of another country, those courts must have jurisdiction. This requires establishing a link between the business and the country in which the claim may be brought.

(a) Courts in Countries Where a Business is Domiciled

Although the specific rules change in different countries, jurisdiction can often be established in the country where the parent company is domiciled.

This includes:

• The country where the business is incorporated or has its statutory seat – this can usually be found on business websites.
• The country where the business has its central administration/headquarters or principal place of business – this can usually be found on business websites.
• The countries where the business has substantial business interests, such as countries held the business holds assets or engages in significant business activity – this can cover a wide range of countries, but different courts require different levels of business activity to establish jurisdiction.
• The countries where the business has a subsidiary, agency, instrumentality, branch, representative office.

Which Court has Jurisdiction?
According to the European Union Brussels I (recast) Regulation, if the foreign company is domiciled in the European Union, the company’s home country courts will have jurisdiction over a case.

For US companies, the US “personal jurisdiction” rule allows a US court to exercise jurisdiction over a corporate defendant in its “home” state.

These laws mean that you may be able to bring a legal claim against a foreign business in its home country regardless of where the harm occurred.

Example: Dooh v. Royal Dutch Shell plc (The Netherlands)
In this case (see above), the claimants sued Royal Dutch Shell in The Netherlands on the basis that its principal place of business is in The Hague. The case against Royal Dutch Shell was filed in the Netherlands under the Brussels I Regulation.

This may not always be a simple thing to prove. Companies may use jurisdictions with limited regulatory controls in which to incorporate, and boards of directors can meet in countries away from where the main business of the company is undertaken. However, a range of countries may be available to choose from.

(b) National Courts with Universal Jurisdiction

Sometimes, businesses can be held accountable in countries that have courts with universal jurisdiction.

• This type of jurisdiction is most relevant for criminal cases. For more information on criminal cases, see “How Can I Bring a Criminal Case in National Courts?”

Courts with universal jurisdiction can hear cases concerning gross human rights abuses – such as the crimes of genocide, crimes against humanity, slavery, torture and war crimes – regardless of where the abuses took place or where the business is domiciled.

• Amnesty International has reported that there are 163 countries with some form of universal jurisdiction of the serious crimes listed above.

Example: New Zealand’s International Crimes and International Criminal Court Act 2000
This law allows people to be prosecuted in New Zealand for war crimes, crimes against humanity, and genocide in accordance with the Geneva Conventions and the Rome Statute of the ICC.

It states that individuals may be prosecuted in New Zealand for these crimes regardless of

“(i) the nationality or citizenship of the person accused; or

(ii) whether or not any act forming part of the offence occurred in New Zealand; or

(iii) whether or not the person accused was in New Zealand at the time that the act constituting the offence occurred or at the time a decision was made to charge the person with an offence.”

Another key example is in Spain where prosecutions under universal jurisdiction are more common than in other countries.

Universal jurisdiction is beginning to be used to hold individuals in businesses accountable for crimes they have committed or contributed to through their business activities.

Example: War Crimes Case Against Lundin Petroleum in Sweden
Swedish prosecutors are bringing a criminal case against two directors of Lundin Petroleum for aiding and abetting crimes against humanity committed in South Sudan.

Lundin carried out oil exploration and production during the civil war in South Sudan and is alleged to have paid armed groups to displace local populations come oil-rich areas.

The case has been approved to go to trial and could lead to corporate fines, forfeiture of property/profits related to Lundin’s operations in Sudan and imprisonment of the directors.

However, if you want to receive compensation, the business will have to hold assets in the country which can be given to you as a remedy.

Accessing courts in foreign countries raises issues specific to the context of corporate accountability.

Below are some examples of barriers to accessing courts in foreign countries and ways to overcome them:

(a) Forum Non Conveniens

In some countries (especially the US), the principle of forum non conveniens allows the court to decide that the case should not be heard because there are more convenient courts available in other countries (i.e. the country where the activities took place).

This is based on:

• The balance of convenience for the parties; and
• The balance of public interests between the forum court and the place where the claim arose.

Example: Bhopal case (US)
In the Bhopal case (see “How Can I Bring a Civil Claim Against a Business in National Courts?”), a claim was brought in the US against the US parent and Indian subsidiary in the US courts.

The US courts dismissed the claim on the basis of forum non conveniens in favour of the case proceeding in India.

However, in some cases, courts have dismissed forum non conveniens arguments on the basis that there isn’t a real chance of accessing justice in the courts of the country where the abuses happened.

Sometimes, this can be because of corruption in the other country.

Example: The Newmont Mining Case in Peru
The plaintiffs (a farming family in Peru) have filed a request for an injunction against Newmont Mining Corporation, one of the world’s largest gold producers, and its Peruvian subsidiary. They argue that Newmont led a campaign of harassment and abuse against the plaintiffs to force them off their land.

In March 2019, a US Court of Appeals reversed a lower court decision accepting Newmont’s arguments of forum non conveniens (and that the case should be heard in Peru) citing evidence of corruption in the Peruvian courts.

The case could then be heard in US courts.

There may be practical difficulties (like access to funding) about bringing your case in your country that may persuade a court in a different country to hear the case.

Example: Lungowe v Vedanta (UK)
In this case, (see above), although the UK Supreme Court accepted, in theory, that Zambia was the best place to take the case (because that’s where the abuses occurred), the court held the case could still be brought in the UK.

This was because the court considered there a real risk that the claimants could not obtain “substantial justice” in Zambia, since (i) legal aid would not be available, conditional fee agreements are illegal, and the claimants are too poor to fund legal representation; and (ii) Zambia lacks legal teams of sufficient size and experience to pursue mass claims of this nature effectively.

(b) Presumption Against Extraterritorial Application

In some countries, there is also a general presumption against the extraterritorial application (i.e. application to events in different countries) of national laws.

Example: Kiobel v Royal Dutch Shell Petroleum (US)
Cases used to be brought in US courts to secure accountability for human rights abuses in other countries under the Alien Torts Statute.

However, this route has been largely closed due to US courts deciding there is a presumption against the extraterritorial application of the statute.

The US Supreme Court held that a claim under statute was possible only where there existed a substantial territorial connection between the alleged human rights abuse and the US.

In this case it excluded a claim brought by Nigerian claimants against a non-US corporation for acts occurring in Nigeria.

If the claim is based on the Alien Torts Statute, it must be shown that the intent behind the statute is for it to allow claims arising outside the jurisdiction.

In European courts, this generally isn’t a big a problem and there is a wave of cases now being brought in different European countries.

• For example, similar cases to Kiobel have been brought in the UK and The Netherlands.

(c) Applicable Law

Although you may be able to sue a foreign business in its home country, the general rule is that your case will be decided according to the law in the country where the damage occurred (i.e. your country or the host country).

This can lead to problems:

• If the law in the host state sets out lower standards of protection (e.g. lower health and safety standards and labour standards) than in the business’ home country, you may not be able to rely on the higher standards.
• If the law in the host state has a shorter statute of limitations (i.e. a time limit), the period you are allowed to bring your claim may have expired even if the case could have proceeded under the foreign country’s laws.

Example: Jabir v KiK
A court in Germany held that the applicable law in the case was the law of Pakistan because this is where the damage occurred.

The court concluded that the two-year legal limitation period for bringing a claim under Pakistan’s law had expired before the claims were filed and so dismissed the claim. Under German law, the claimants would not have been time-barred.

(d) Financing Your Case

Access to courts is expensive, especially when it involves travelling to another country. Legal aid may help but its availability in cases involving corporate defendants will depend on the rules applicable in the foreign country.

For more information see “How Can I Finance my Action?”

(e) Practical Difficulties when Bringing a Case in Another Country

Another difficulty in bringing cases in other countries is that you need to present evidence collected in one country in the courts of another country.

• This could involve bringing witnesses (who may also need to be granted a visa to appear in court) from your country to courts in another country.
• This also means navigate your way around the laws of evidence in a new country.

Make sure you bring ALL relevant evidence when travelling from one country to another.

• Be careful to preserve the evidence in transport and ensure it’s not damaged.
• Try to make a digital copy as much evidence as possible and keep copies of your evidence in a secure location.
• Ensure that your evidence is held in a secure way. You may need to encrypt digital evidence. Make sure everything is password protected.

If witnesses need to appear in the court in another country, ensure you have checked they are able and willing to travel. This will need to be funded.

• Consider whether video appearances or written witness statements can be used instead of physical appearances.
• Courts in some countries will try to work with you to overcome difficulties in getting witnesses to travel abroad.

Example: Kalma v African Minerals Limited (UK)
In this case, a UK High Court judge travelled to Sierra Leone to take witness statements.

Because you will need expertise in the law of another country and (most likely) assistance in overcoming some of the difficulties associated with bringing a case in another country, it is very important you find an organisation or law firm in the country you want to bring the case that is able to see.

Here you can find a couple of example statements of claims. Although your claim needs to relate to your case, these examples could help you if you are thinking about bringing a civil claim against a business in a foreign.

Note:

• The structure of the claims
• The arguments they use
• The cases and evidence they use to support their argument

Choc v Hudbay Minerals Inc (Canada) – Legal Documents

Indigenous Mayan Q’eqchi’ Peoples from Guatemala have filed a claim in the Canadian courts against the Canadian mining TNC Hudbay Minerals Inc and two of its subsidiaries.

They allege that members of the police and military committed acts of violence, including murder, assault and rape while under the control of Hudbay. They argue that the company negligently directed, controlled, monitored and supervised the security forces deployed to secure Hudbay’s mining project in Guatemala.

In 2013, the Canadian courts accepted jurisdiction and the case will proceed to trial.

Find the legal documents for the case here.

Doe v Unocal (US) – Statement of Claim

Villagers from Myanmar who suffered serious human rights abuses by members of the army (including forced labour and forced relocation) in connection with a natural gas pipeline project, brought a class action against Unocal Corporation (a US oil company) and related companies in the US courts.

The plaintiffs alleged that the defendant companies paid money to and benefited from the army’s role in project, alleged to be managed as a joint venture between the army and defendant companies. The plaintiffs’ legal claims included wrongful death, assault, liability in negligence and recklessness. The case settled.

Find the statement of claim in the link above.