Tort Litigation against Transnational Corporations in the English Courts: The Challenge of Jurisdiction

Ekaterina Aristova

doi:10.18352/ulr.444

Abstract

In recent decades, some jurisdictions have shown a growing trend of private claims alleging direct liability of parent companies for overseas human rights abuses (‘Tort Liability Claims’). These cases form part of an international effort aimed at establishing public control over the private operations of transnational corporations (‘TNCs’). Their success in addressing the challenges of cross-border operations of corporate groups, however, depends on the rules governing domestic courts’ power to adjudicate disputes. One of the consequences of globalisation is that the territorial focus of the adjudicative jurisdiction is often contrary to the transnational nature of the TNCs’ activities. The central purpose of this article is to demonstrate how jurisdictional issues arising in Tort Liability Claims challenge the traditional paradigm of private international law as an abstract and technical discipline by necessitating increasing involvement of domestic courts in the regulation of international business. The article focuses on the rules of jurisdiction applied by the English courts and, in particular, on the much-debated decisions in Lungowe v Vedanta and Okpabi v Shell.

Highlights

Recent decades have seen an explosion of interest in the social, economic and environmental risks caused by the cross-border operations of transnational corporations (‘TNCs’)
The concluding part will critically assess the overall impact of the increasing trend of litigating against TNCs in their home states
This paper argues that rules of jurisdiction play a critical role in the framework of Tort Liability Claims, but their potential to close a regulatory gap in group liability for overseas torts is limited by the absence of international coordination and uniform legal approaches to the activities of TNCs

Summary

Introduction

Recent decades have seen an explosion of interest in the social, economic and environmental risks caused by the cross-border operations of transnational corporations (‘TNCs’) These powerful corporate groups have often been involved in various forms of corporate wrongdoing in many parts of the world.[1] Severe abuses, reported by various non-governmental organisations (‘NGOs’), range from murder to the violation of socioeconomic rights.[2] As a response to inadequate legal remedies for the victims of corporate abuses in host states[3] and an absence of international binding instruments on corporate accountability,[4] few jurisdictions have shown a growing trend of civil liability cases against TNCs (‘Tort Liability Claims’).[5] These cases are examples of private negligence claims brought by the victims of overseas corporate wrongs against parent companies before the courts of the home states. This paper argues that rules of jurisdiction play a critical role in the framework of Tort Liability Claims, but their potential to close a regulatory gap in group liability for overseas torts is limited by the absence of international coordination and uniform legal approaches to the activities of TNCs

See in more detail

Tort Liability Claims: A new solution for regulating TNCs

Tort Liability Claims

Okpabi v Shell and the challenge of a ‘real issue to be tried’ test