A London court will decide in the coming weeks, the objection by Royal Dutch Shell on whether it can be tried in the UK over allegations of oil spill in Bille and Ogale, two communities in Nigeria’s oil-rich Niger-Delta region in Nigeria.
Allowing the case, some legal experts reason, could attract more cases against multinationals in Britain by litigants who do not trust the justice systems in their home countries.
Others warn that a victory by the communities could encourage unscrupulous residents to let oil spills worsen at remote sites by denying clean-up access, as payouts are often linked to the scale of the damage.
“This case brings home the message that multinationals may increasingly face claims in the English courts arising from disputes which have little or no connection to England,” said Tom Cummins, a partner at law firm Ashurst told Reuters.
While the Bille and Ogale communities say they have not confidence in Nigerian courts on the case against Shell subsidiary Shell Petroleum Development Company of Nigeria (SPDC), which is deeply rooted within the Federal and state governments, Shell insists the matter is “uniquely a Nigerian problem”.
It also denies responsibility for the spills, which it blamed on sabotage and illegal refining by vandals.
Their claim comes just months after Shell agreed a 55 million pound ($68 million) settlement in 2015 with another Nigerian group, the Bodo community.
That case covered two pipeline leaks in 2008, which Shell accepted were its fault due to corrosion, and marked the largest ever out-of-court settlement relating to Nigerian oil spills. Law firm Leigh Day, which is representing the Bille and Ogale communities and also brought the Bodo case in London against Shell, says Nigeria’s court system is not robust enough to give a fair ruling in reasonable time.
Leigh Day, which is licensed only to practise in Britain, has also raised concerns over whether companies will conduct clean-up operations properly without international pressure.
“You’ve got a dual problem: the systemic ineffectiveness of the courts and the fact that people (in local communities) just can’t get the evidence together or even representation to take on these companies,” Daniel Leader, partner at Leigh Day, told Reuters.
For its part, the Nigerian government’s National Oil Spill Detection and Response Agency defended the effectiveness of the Nigerian court system, saying it had successfully sanctioned and sued several companies locally, including SPDC.
Shell said it settled the Bodo case in part because it admitted responsibility for the spill, but never agreed that the case should be tried in London.
It said it would fight to stem a potential landslide of cases from groups whose lands Shell says were spoiled by sabotage, oil theft and illegal refining that are endemic across the Delta.
“We fully intend to have this (jurisdictional issue) decided by a trial judge, to determine the issue once and for all,” said Gaurav Sharma, senior legal counsel for Shell’s global litigation team.
Shell said 92% of all oil spilled from SPDC facilities between 2009 and 13 resulted from theft, sabotage or illegal refining.
In part due to such attacks, the oil major is divesting pipelines and other onshore assets after more than 50 years of operations in Nigeria.