Summary

INTRODUCTION

1. On 5 November 2015 Brazil suffered its worst ever environmental disaster when the Fundão Dam in South East Brazil collapsed, releasing around 40 million cubic metres of tailings from iron ore mining. The collapse and flood killed 19 people, destroyed entire villages, and had a widespread impact on numerous individuals and communities, not just locally but as a result of the damage to the River Doce system over its entire course to the sea some 400 miles away. The Brazilian public prosecutor has estimated the cost of remediation and compensation at a minimum of R$155 billion, about £25 billion at today's exchange rates.

2. In this action some 202,600 claimants seek compensation for losses caused by the disaster from the first respondent (now BHP Group (UK) Ltd by a further recent name change), which is incorporated in England and Wales ("BHP England"); and from the second respondent which is incorporated in Australia ("BHP Australia"). BHP England and BHP Australia are now the only two defendants in this action. The claimants are all Brazilian and comprise (a) over 200,000 individuals, including some members of the indigenous Krenak community who have particular community rights, and for whom the river plays a unique part in their spiritual traditions; (b) 530 businesses, ranging from large companies to sole traders; (c) 15 churches and faith based institutions; (d) 25 municipalities; and (e) 5 utility companies.

3. The area affected by the dam collapse fell within two states, Minas Gerais, where the dam was, and Espírito Santo, in which the River Doce reaches the Atlantic ocean. The local government authority with responsibility for the area which included the dam itself, and the nearby villages which were destroyed, is the municipality of Mariana. At Appendix 1 to this judgment is a map identifying the affected places and the geographical distribution of the claimants.

4. The dam was owned and operated by Samarco Mineração SA ("Samarco") a Brazilian company jointly owned, in 50% shares pursuant to a joint venture agreement, by two other Brazilian companies, Vale SA ("Vale") and BHP Billiton Brasil Ltda ("BHP Brazil"). BHP Brazil is a subsidiary within the BHP group. Vale and BHP are two of the world's largest mining concerns. BHP England and BHP Australia sit at the head of the BHP group. At all material times they have operated together as a single economic entity under a dual listed company structure, with boards of directors comprising the same individuals, a unified senior executive management structure and joint objectives. Although the corporate structure is such that it is BHP Australia which is the indirect parent of BHP Brazil, the claim is brought jointly and severally against BHP England and BHP Australia. The claim against each is materially identical, based on the same factual and legal allegations.

5. Claim forms were initially issued in November 2018, but were superseded by a claim form covering all surviving claims, which was issued and served on the two defendants in May 2019. Both defendants were served with the claim form here as of right: jurisdiction over BHP England arises by virtue of its domicile here under Regulation (EU) No 1215/2012 ("Brussels Recast"); jurisdiction over BHP Australia is established by it carrying on business at offices here, where the proceedings were served.

6. By that time the disaster had already given rise to a vast number of claims against other defendants in the Brazilian courts; and to an extensive compensation and remediation programme by the Renova Foundation ("Renova"), a Brazilian private foundation established by Samarco, Vale and BHP Brazil. About three quarters of the claimants had been involved in such litigation and/or the Renova programme.

7. On 7 August 2019 the defendants applied to strike out or stay the claims:

(1) BHP Australia applied to stay the claims against it pursuant to CPR 11(1) on the grounds that Brazil was clearly and distinctly the more appropriate and available forum ("the forum non conveniens application");

(2) BHP England applied to stay the claim pursuant to article 34 of Brussels Recast on the grounds that there were pending proceedings in Brazil giving rise to a risk of irreconcilable judgments ("the article 34 application"); by the conclusion of the hearing before the Judge, and before us, the only such pending action relied on was what has been characterised as the 155bn CPA;

(3) Without prejudice to those applications, both defendants applied to strike out or stay the claims pursuant to CPR 3.4(2)(b) as an abuse of process, alternatively for them to be stayed on case management grounds pursuant to CPR 3.1(2)(f), in each case because they are pointless, wasteful and duplicative of the collective and individual proceedings and/or judgments in Brazil and/or the work of the Renova Foundation ("the abuse application" and "the case management stay application" respectively).

8. Following an eight-day hearing in July 2020 and further written submissions in September 2020, Mr Justice Turner ("the Judge") handed down a judgment on 9 November 2020 ("the Judgment"), determining all four applications in favour of the defendants. In summary his main findings were as follows.

(1) All the claims should be struck out, alternatively stayed, as an abuse of process. His principal reason was that because of problems of irreconcilable judgments and cross-contamination arising from parallel proceedings in Brazil, the claims would be "irredeemably unmanageable" in England. He also considered that the proceedings were futile and wasteful because the claimants could not expect to receive any more advantageous redress through pursuing them here than could be obtained through litigation and/or the Renova initiatives in Brazil.

(2) In the alternative,

(a) the claims should be stayed against BHP England pending conclusion of the 155bn CPA pursuant to article 34 of Brussels Recast. The Judge held there were numerous issues on which there was a risk of irreconcilable judgments between this action and the 155bn CPA. He assumed (without deciding) that it would not be possible for the claimants' claims to be brought in Brazil and consolidated with the 155bn CPA, but held that it was appropriate to stay this action pending the conclusion of the 155bn CPA. He relied on his earlier conclusion that for the two actions to proceed in parallel would be procedurally unmanageable and antithetical to the proper administration of justice.

(b) The claims against BHP Australia should be stayed on forum non conveniens grounds. He held that, even if proceedings against BHP England would be continuing in England, Brazil would still be the appropriate forum for the trial of the claims against BHP Australia; and that the claimants had failed to establish to the required standard that they would not obtain substantial justice in Brazil because they could obtain adequate redress there through Renova and/or litigation in the Brazilian courts.

(3) A case management stay would have been justified. The Judge held that the factors relevant to the exercise of his discretion in relation to a case management stay did not differ materially from those relevant to the strike out application.

9. The claimants' application to the Judge for permission to appeal was refused on paper in January 2021, as was its renewal to the single Lord Justice. The claimants then made a successful application under CPR 52.30 to set aside the latter's refusal of permission. The judgment of this court granting permission to appeal in respect of all four applications has the neutral citation number [2021] EWCA Civ 1156 ("the PTA Judgment").

10. Before considering the reasoning in the Judgment more closely, and identifying and addressing the rival arguments on the appeal, it is convenient to set out the nature of the claims in these actions, and the scope and course of the various processes which have taken place in Brazil. The latter, in particular, requires some little detail because the reasoning in the Judgment, and the rival arguments in the appeal, are dependent on such detail.

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