Lungowe v Vedanta Resources Plc [2019] UKSC 20

Court: Supreme Court

Facts: Dominic Liswaniso Lungowe and 1,825 other Zambian citizens alleged that Vedanta Resources plc, a UK-based multinational, was liable for environmental and human rights violations caused by its Zambian subsidiary, Konkola Copper Mines Plc (KCM). The claimants sought compensation for personal injury, property damage, and loss of income due to discharges from the copper mine operated by KCM. Vedanta contested the jurisdiction of the English court and sought a stay on the grounds of forum non conveniens.

Issue: Whether Vedanta Resources plc could be held liable in England for the alleged harm caused by its Zambian subsidiary, KCM, and whether the English court had jurisdiction over the case.

Held: The Supreme Court unanimously held that Vedanta Resources plc could be sued in England. The court found that there was an arguable case that Vedanta, as the parent company, owed a duty of care to the claimants concerning the actions of its subsidiary. Lord Briggs emphasized that the critical question was whether Vedanta had sufficiently intervened in the management of KCM to incur such a duty of care.

The court clarified that the parent company’s duty of care was not based solely on its parent-subsidiary relationship but on the level of intervention, control, and supervision exercised over the subsidiary’s operations. Lord Briggs noted that if Vedanta had implemented group-wide policies and actively enforced them, including through training and monitoring, it could be liable. The presence of internal documents and communications would be crucial in assessing this.

Key Judicial Statement: Lord Briggs stated, "The level of intervention by a parent company in the management of its subsidiary, particularly in implementing and enforcing group-wide policies, can establish a duty of care. The parent company’s control and oversight of the subsidiary’s operations are key factors in determining whether it has assumed responsibility for the subsidiary’s actions."

💡 LevelUpLaw: Lungowe v Vedanta Resources Plc establishes that a parent company may be liable for the actions of its subsidiary if it has actively intervened in and assumed responsibility for the subsidiary’s operations, particularly concerning environmental and human rights standards. The case underscores the importance of examining internal documents and communications to determine the extent of the parent company’s involvement and control. This decision affirms that established tort principles can be applied to complex corporate structures, without introducing a novel category of negligence liability.