On 8 July 2022, the Court of Appeal handed down judgment in Municipio de Mariana & ors v BHP Plc & BHP Ltd. The Court allowed the Claimants’ appeal and allowed the group litigation arising out of the collapse of the Fundão Dam in Brazil to proceed in this jurisdiction.
The Claimants are over 202,000 individuals resident in Brazil and certain Brazilian municipalities, faith-based institutions and businesses. They bring claims under Brazilian law against the Defendants, BHP Plc and BHP Ltd, for losses arising out of the collapse of the Fundão dam. The dam was owned and operated by Samarco Mineração SA (a company jointly owned by BHP Billiton Brasil Ltda and Vale SA). The Claimants allege that BHP Plc and BHP Ltd are liable for losses arising out of the Fundão Dam collapse under Brazilian environmental law, as well as Brazilian corporate and civil law.
BHP Plc and BHP Ltd issued applications in August 2019 to (i) strike out the claims as an abuse of process, (ii) in BHP Plc’s case, seeking a stay under Article 34 of the Brussels Recast Regulation; (iii) in BHP Ltd’s case, seeking a stay on the grounds of forum non conveniens, i.e. that Brazil was an available forum which was clearly and distinctly more appropriate for a trial of the claims; and/or (iv) to stay the claims on case management grounds. The applications were heard before Mr Justice Turner in July 2020 over eight days. On 9 November 2020, the judge handed down judgment and granted all four applications.
Permission to appeal was initially refused on paper by the Judge and by a single Lord Justice, but was later granted following an application by the Claimants to reopen the appeal under CPR 52.30.
The Claimants’ appeal was heard over five days in April 2022. The appeal raised important and complex issues, particularly in the context of group litigation, on abuse of process, Article 34 of the Brussels Recast regulation, and the application of forum non conveniens principles.
In summary:
- In relation to abuse of process, the Court of Appeal held that the Judge’s decision to strike out, alternatively stay, the proceedings was flawed. Among other things, the Court of Appeal held that the Judge had erred in concluding that the proceedings were irredeemably unmanageable and had wrongly relied on forum non conveniens factors as part of his analysis on abuse of process (see [179]-[233]).
- As regards BHP Plc’s Article 34 application, the Court of Appeal held that the Court should take a broad approach to determine whether the actions in England and in Brazil were related ([256]-[257]). It further held that a judgment in the related Brazilian action, namely the litigation known as “the 155bn CPA”, was capable of recognition in this jurisdiction ([258]-[272]). However, the Court of Appeal concluded that a stay of the English proceedings was not necessary for the administration of justice ([273]-[314]).
- In relation to BHP Ltd’s forum non conveniens application, the Court of Appeal held (at stage one of the well-known Spiliada test) that BHP Ltd had not established that a single action in Brazil was a clearly and distinctly more appropriate forum in which the claims could more suitably be tried ([343]-[347]). Further, the Court held (at stage two of the Spiliada test) that the Claimants had established that there was a real risk that they could not proceed together in a single action in Brazil ([352]-[362]).
The full text of the Court of Appeal’s judgment can be found here.
Daniel Toledano QC, Nicholas Sloboda, Maximilian Schlote, Veena Srirangam and Jade Fowler (along with Charles Gibson QC, Shaheed Fatima QC and Hanif Mussa QC) acted for BHP, instructed by Slaughter and May. Stephanie Wood also acted for BHP in an earlier stage of the proceedings.
Alain Choo Choy QC (along with Nicholas Harrison, Jonathan McDonagh and Russell Hopkins) acted for the Claimants, instructed by PGMBM.