The future of foreign direct liability?: Exploring the international relevance of the Dutch Shell Nigeria case

Abstract

In January 2013, the The Hague district court in the Netherlands rendered a groundbreaking verdict in a civil liability suit against Royal Dutch Shell and its Nigerian subsidiary (SPDC). The lawsuit had been brought before it by four Nigerian farmers and the Dutch NGO Milieudefensie, in response to a number of oil spill incidents from SPDC-operated pipelines in the Nigerian Niger Delta. Although the majority of the claims were dismissed, the district court in its ruling did grant one claim that related to spills from an abandoned wellhead, ordering SPDC to pay compensation for the resulting loss. This judgment holds international relevance, as this Dutch Shell Nigeria Case forms part of a worldwide trend towards foreign direct liability cases. Growing numbers of similar lawsuits have been brought before courts in other Western societies, but judgments on the merits have so far remained scarce. The relevance of the case has further increased with the US Supreme Court’s April 2013 ruling in the case of Kiobel v. Royal Dutch Petroleum Co., which has significantly limited the scope of the Alien Tort Statute. This article explores the The Hague district court’s decision in the Dutch Shell Nigeria Case, and places the case within the socio-legal context of the contemporary trend towards foreign direct liability cases, the international debates on corporate accountability and business & human rights, and the Supreme Court's judgment in the Kiobel-case.