Vedanta Resources PLC and Another v Lungowe and Others [2019] UKSC 20

Abstract

As globalization has expanded in recent years, a number of novel issues have arisen on the international stage, regarding the relations and interaction between legal regimes – both from the perspective of states (in contexts such as human trafficking), and from that of multinational corporations. One such issue in this latter context concerns liability of parent companies for actions or omissions of their (overseas) subsidiaries or branches – especially considering the lack of transparency surrounding such relationships, and the very public face presented by a multinational. Given the potential for a claim to be brought in either of the two jurisdictions concerned, a number of cases have sought to bring some clarity to this decision. Vedanta Resources plc and another v Lungowe and others1 is the latest in a line of cases at the UK courts concerning liability of parent companies for actions of foreign-domiciled subsidiaries. AAA v Unilever plc2 and Okpabi and others v Royal Dutch Shell plc and another3 discussed, and were dismissed largely because of, lack of ‘sufficient proximity’ between the parent company and subsidiary to prompt a duty of care. As discussed below, this was one question of law on which the claimants succeeded in Vedanta: a common law duty of care was found. The implications of Vedanta for Okpabi upon its upcoming appeal (and similar future cases) in extending the applicability of a duty of care (in certain circumstances) to stakeholders other than employees or consumers, are wide-ranging. Given the less than optimistic outcome for victims in both AAA and (to date) Okpabi from a business and human rights perspective, it is hoped that Vedanta can contribute to a more victim-centered approach. Case note: Vedanta Resources plc and Another v Lungowe and Others [2019] UKSC 20