By David Hunt and Kimmie Fearnside
Multinational organizations often adopt corporate structures that are calculated to insulate the group parent company from the wrongful acts of its subsidiaries. The recent jurisprudence of the UK Supreme Court demonstrates that such structures may not provide the expected protection against claims.
In Okpabi and Ors v. Royal Dutch Shell & Anor [2021] UKSC 3 (“Okpabi”) the Supreme Court found that the English courts could take jurisdiction over claims for tortious wrongdoing brought against Royal Dutch Shell Plc (“RDS”), a UK domiciled company, in relation to the actions of its Nigerian subsidiary. In reaching that conclusion the Court accepted that the claimants had a real prospect of establishing at trial that RDS was liable. This decision affirms the Supreme Court’s previous confirmation in Vedanta Resources Plc v Lungowe [2019] UKSC 20 (“Vedanta”) that parent companies could be so exposed to liability. More