Territoriality and Globalization

In Stephen Allen, Daniel Costelloe, Malgosia Fitzmaurice, Paul Gragl, and Edward Guntrip (eds.), 'Oxford Handbook on Jurisdiction in International Law' (Oxford University Press, 2018 Forthcoming) Territoriality and Globalization Uta Kohl This chapter challenges the commonly held view that the territorial State is fundamentally unsuited to, and incompatible with, twenty-first century manifestations of globalization in the form of ever-tightening economic integration or all-pervasive global communication networks. This is only partly true. The State – as defined and enabled by public international law around the idea of territorial sovereignty – provides the ideal mechanism for global capital and corporate activity to function and grow with maximum efficiency and minimal accountability. The territorial nation State provides the legal framework that facilitates foreign wealth accumulation through open borders, and its subsequent retention in the Global North through closed borders. At the core of this legal framework are the territorial rules under private and public international law that provide high flexibility in selectively opening and closing borders as and when national interest demands. The chapter argues that the complementary concepts of territory and borders are useful constructs to ringfence capital from ‘leakages’ to the outside. The argument is illustrated with reference to US cases applying the presumption against extraterritoriality, on the one hand, and by English corporate crossborder tort litigation, on the other hand. In these cases, the territorial State emerges not as a victim of globalization but as an essential participant, propagator and beneficiary of it. Table of Contents 1. Introduction ........................................................................................................................ 2 2. Reflections on Territory, Borders and Authority ................................................................ 4 2.1. The Dual Nature of ‘Territory’ and ‘Borders’ .................................................................. 4 2.2. Territorial Sovereignty and the Public-Private Divide ..................................................... 6 3. Inconspicuous ‘Border Guards’ and Preventing ‘Leakages’ of Capital ............................... 7 3.1. Regulatory Law and the ‘Presumption against Extraterritoriality’ in US Litigation ........ 8 3.2. English Tort Litigation .................................................................................................... 12 3.2.1. Removal of Protective Shields: Corporate Veil and Forum Non Conveniens ......... 13 3.2.2. Zambian Copper ..................................................................................................... 17 3.2.3. Nigerian Oil ............................................................................................................. 21 4. Conclusion ............................................................................................................................ 25 1 1. Introduction This chapter challenges the assumption that the territorial State is fundamentally unsuited to twenty-first century manifestations of globalization in the form of ever-tightening economic integration and all-pervasive global communication networks.1 In fact, the accuracy of that assumption depends entirely on whose perspective one takes. The State – based on the idea of territorial sovereignty as conceived under public international law – provides the ideal mechanism for global capital and corporate activity to flourish with maximum efficiency and minimal accountability. The legal structure of the State facilitates a one-way porosity of national borders for the purpose of foreign wealth accumulation, whilst at the same time ring-fencing that wealth from leakages back to its ‘natural’ national beneficiaries. This is so in the case of tangible natural resources in the Global North-South divide, but it is also increasingly apparent in the battle over intangible resources, i.e. trademarked brands, copyrighted material and data within the Global North.2 Implicit in the argument is that although the State in the globalized world serves private corporate interests and related beneficiaries well, it fails those that look to the State as the champion of public interests. This is not to say that the territorial State is necessarily subject to global corporate capture, but that it has design features that lend themselves to such capture and have been moulded to that task. Furthermore, this discussion does not seek to deny the emergence of a myriad of global governance mechanisms and activities either,3 but rather to stress the active role of the territorial State in the creation and maintenance of the global economic order and its profound inequalities. Although it is correct to assert that the ‘forces [of globalization] have reduced the ability of states either to frame independent socioeconomic, foreign and defence policies, or to draw on or forge a national identity capable of sustaining an allegiance to the public good,’4 such a perspective constructs the State as a 1 The debate about the end of the nation State and sovereignty is long-standing but has received new impetus through the global information technology. For a small selection of the discussion see, Kenichi Ohmae, The End of Nation State: The Rise of Regional Economies (Harper Collins, 1996); Susan Strange, ‘The Erosion of the State’ (1997) 96 Current History 365; Vito Tanzi, ‘The Demise of the Nation State?’ (IMF, Working Paper No. 98/120, 1 August 1998); John H. Jackson, Sovereignty, the WTO and Changing Fundamentals of International Law (CUP, 2006). For more sceptical accounts about the end of the State, see e.g. James D Wilets, ‘The Demise of the Nation-State: Towards a New Theory of the State under International Law’ (1999) 17 Berkeley Journal of International Law 193; Martin Carnoy, ‘The Demise of the Nation State?’ (2001) 97 Theoria: A Journal of Social and Political Theory 69; Christopher Rudolph, ‘Sovereignty and Territorial Borders in a Global Age’ (2005) 7 International Studies Review 1; Edward S Cohen, ‘Globalization and the Boundaries of the State: A Framework for Analyzing the Changing Practice of Sovereignty’ (2001) 14 Governance: An International Journal of Policy and Administration 75. 2 See e.g. Marketa Trimble, ‘Geoblocking and ‘Legitimate Trade’’ in Christopher Heath, Anselm Kamperman Sanders and Anke Moerland (eds), Intellectual Property and Obstacles to Legitimate Trade (Wolters Kluwer, 2018). See also William J Drake,’ Territoriality and Intangibility: Transborder Data Flows and National Sovereignty’ in Kaarle Nordenstreng, Herbert I Schiller (eds), Beyond National Sovereignty: International Communications in the 1990s (Norwood: Ablex, 1993) 259. 3 Neil Walker, Intimations of Global Law (CUP, 2015); Neil Walker (ed), Sovereignty in Transition (Hart Publishing, 2003) 167, 167. 4 Richard Bellamy, ‘Sovereignty, Post-Sovereignty and Pre-Sovereignty: Three Models of the State, Democracy and Rights within the EU’ in Neil Walker (ed), Sovereignty in Transition (Hart Publishing, 2003) 167, 167. rd However, see Martti Koskenniemi, ‘What is International Law For?’ in Malcolm D. Evans, International Law (3 ed, OUP, 2010) 32, 37: ‘no alternative to statehood has emerged. None of the normative directions – human 2 victim of globalization only and fails to acknowledge it as one of its key sponsors, propagators and beneficiaries. The arguments are made against two contexts, one general, the other specific. The general context is provided by the territorial paradigm of the nation State, as expressed through jurisdictional rules and principles under public and private international law – both of which allocate regulatory authority in transnational settings.5 These rules take prominence in respect of crossborder activity, including the global economy, when they are designed to bridge the gap between the territorial State and such activity. They draw the line in the sand on who can regulate whom; and given that regulation in the transnational economic sphere is largely about the allocation or reallocation of resources, these rules play a significant role in the global distribution of wealth. This chapter focuses on jurisdiction under private and public international law, but the functional scope of these allocation regimes as far as the global economic sphere is concerned must be understood against the wider context of international trade law. Agreements by the World Trade Organisation (WTO), for example, may be usefully understood as ‘negative’ jurisdictional regimes: they open borders by disallowing regulatory restrictions by States on foreign economic actors that would otherwise fall within their territorial scope.6 They create regulatory no-go zones and thus diminish the authority of States as a condition for participating in the global marketplace. 7 For example, attempts to create economic borders around a State through regulation that advantages local producers over foreign exporters or favours some foreign exporters over others, would generally be struck down as illegal protectionism. International trade law provides the wider economic and legal setting for the Chapter in so far as it promotes the opening or dismantling of economic state borders to allow access to resources and markets. The discussion focuses on the selective closing of State borders, in the public law context, through, for example, the presumption against extraterritoriality, and, in the private law context, through disallowing tort claims based on the rules of private international law. The overall hypothesis is that the opening and closing of borders through law enables States to allow resources to enter with ease and leave with difficulty. That one-way flow of wealth or capital is particularly pronounced in the global North-South divide. In other words, the rules of jurisdiction are far from economically or politically neutral but internalize the socioeconomic interests of States as body corporate in themselves and on behalf of their domestic corporations. The specific context against which the arguments are made is rights, economic or environmental values, religious ideals – has been able to establish itself in a dominating position. On the contrary, what these values may mean and how conflicts between them should be resolved is decided largely through ‘Westphalian’ institutions.’ 5 Another legal framework that contributes to the perpetuation of the North-South divide is the territorial and state-centric conception of human rights, see Uta Kohl, ‘Corporate Human Rights Accountability: The Objections of Western Governments to the Alien Tort Statute’ (2014) 63 International and Comparative Law Quarterly 665; more comprehensively, see Sarah Joseph, Corporations and Transnational Human Rights Litigation (Hart, 2004) and, more recently, Jena Martin, Karen E Bravo (eds), The Business and Human Rights Landscape (CUP, 2016). 6 See e.g. Janet Dine, Companies, International Trade and Human Rights (CUP, 2005) 97ff. As discussed below, IMF and World Bank conditionalities reduce the effective sphere of ‘national sovereignty’ in many developing countries. 7 Territorial assertions of jurisdiction that could be validly made under public international law can be challenged on the basis of their inconsistency with trade commitments, e.g. United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services (WTO Appellate Body, 7 April 2005, WT/DS285/AB/R). 3 provided by US cases on the presumption against extraterritoriality, on the one hand, and recent corporate crossborder tort litigation before English courts, on the other hand. 2. Reflections on Territory, Borders and Authority 2.1. The Dual Nature of ‘Territory’ and ‘Borders’ Before turning to these cases, it is useful to reflect upon the concept of territory and the role it plays within the global economy. As a starting point, although the term of ‘territory’ appears to refer to land itself, it is in fact a legal concept that describes a relationship involving land of one party vis-à-vis other parties. This becomes more apparent when one considers the analogous domestic legal concept of ‘property’. Property does not refer to the thing itself but rather to entitlements of one person vis-à-vis other persons involving a particular object, such as a chattel or a plot of land. Similarly, the concept of territory concerns the entitlement – involving a portion of the globe – of one State vis-à-vis individuals and other States. The nature of that entitlement is that the State can exercise authority on the land to the exclusion of other States: ‘Territory is, of course, itself a geographical conception relating to physical areas of the globe, but its centrality in law and international law in particular derives from the fact that it constitutes the tangible framework for the manifestation of power by the accepted authorities of the state in question.’8 Buxbaum puts it in more unequivocal terms when she says: ‘“Territoriality” and “extraterritoriality”… are legal constructs. They are claims of authority, or of resistance to that authority, that are made by particular actors with particular substantive interests to promote.’9 The complementary concept of ‘borders’ also appears to be quintessentially physical; yet, much like territory, it is a construct that defines relationships of actors around a physical reality. Borders delimit the boundaries of the ‘manifestations of power’ by a State vis-à-vis individuals and other States. On one level, they are intangible demarcations concerning an area of land created through public international law. Even where fences, walls or border posts are erected on borders, these merely externalize them in a tangible way and partly enforce them, but they do not create them. Their existence has an absolute quality, first, by defining the spatial extent of State power and, second, by laying down the constitutional formal paradigm that State authority is exclusive within that space. On another level, territorial borders can effectively be erected or dismantled – as a matter of degree – in numerous ways depending on the context. In international trade, for example, the imposition of import or custom duties by a State or group of States, such as the European Union (EU), creates economic barriers on the importation of goods and if these duties are high enough, they become insurmountable economic borders. In contrast, a decision to allow a foreign investor to construct a local utility with the profits being repatriated, dismantles an economic border which is ‘enacted’ through a multitude of transnational communications and transactions. In the field of communications, if a State imposes blocking orders on its Internet Access Providers in relation to certain online 8 M.N Shaw, ‘Territory in International Law’ (1982) 13 Netherlands Yearbook of International Law 61, 62 [emphasis added]. 9 Hannah Buxbaum, ‘Territory, Territoriality, and the Resolution of Jurisdictional Conflict’ (2009) 57 The American Journal of Comparative Law 631, 635. 4 material, it erects cyberborders that shape the ‘domestic’ online space. In these examples, dematerialized borders are created through legal provisions and often enforced through domestic actors which are only rarely situated at the physical boundaries of the territory. 10 Importantly, in these instances, borders are not an all-or-nothing matter, but rather more or less porous depending on the legal provisions that create the barriers for the flow of goods, services, capital or people across the state borders. The ‘border guards’ here are gatekeepers of various descriptions, from state institutions that create or dismantle barriers vis-à-vis foreign actors, to banks and other large corporate actors or communication intermediaries that further implement these laws. This dual existence of territorial borders, as both absolute markers of State authority and highly flexible creations that allow varying porosity depending on State law and policy, is in line with the conception of statehood under public international law in terms of ‘territorial sovereignty’. On the one hand, territorial sovereignty as the key pillar of the global legal order manifests itself as the inviolable constitutional paradigm that enjoys utmost sanctity within the international legal order. Within this meaning, territorial sovereignty is indivisible and reflects the fact that the ‘territory’ is not just an attribute of State power, but a constitutive element of statehood: the State has authority over its territory and also is its territory. 11 As such, territorial sovereignty is an all-or-nothing affair. On the other hand, territorial sovereignty is – like all authority – also highly divisible and can be divided and transferred in parts in a myriad of ways.12 Here authority as an attribute of State power can be exercised or not in respect of different matters, and when it is exercised, it may be exercised in ways that reduce the realm of future exercises of that power, for example, through entering into international treaties, including trade agreements. Considering by analogy the domestic law concept of property, it is entirely feasible for authority or control over a piece of land to be divided into multiple, mutually compatible claims. Legal devices create different, parallel proprietary interests in the varying resources land has to offer. Under English law, for example, ownership of land can be fragmented into freehold and leasehold estates, interests under a mortgage or other proprietary charges, easements, private and public rights of way and licences or concessions for the resources in the ground.13 Equally, territorial authority can be divided to confer control over different resources to different stakeholders, or to limit or share the use of certain territorial resources, such as fishery in the territorial sea with other States and private parties. The dual nature of territoriality means that indivisible territorial sovereignty can be fully intact when that authority has also been fragmented and transferred. This duality is not an expression of de jure versus de facto control, given that the divisibility of authority over territory is as much embedded in law as the indivisibility of territorial sovereignty. The duality exists and can exist comfortably through the creation of different layers of legal 10 See discussion on the effect of the UK leaving the EU customs union and its effect on the Irish/Northern Irish borders. 11 F A Mann, ‘The Doctrine of International Jurisdiction Revisited After Twenty Years’ (1984) 186 Recueil des Cours 9. 12 See also, the four-part sovereignty typology in Stephen D Krasner, Sovereignty: Organised Hypocrisy (Princeton University Press, 1999) and for the idea of ‘economic sovereignty’ e.g. A.V. Lowe, ‘The Problems of Extraterritorial Jurisdiction: Economic Sovereignty and the Search for a Solution’ (1985) 34 International and Comparative Law Quarterly 724. 13 Generally, see Sukhninder Panesar, General Principles of Property Law (Longman, 200,) 20ff. 5 meaning: legal arrangements in one layer do not affect the other. However, these layers may be readily conflated by different actors to promote their interests; for example, appeal to ‘territorial sovereignty’ in its indivisible meaning (first layer) may be selectively made to support the closing of territorial borders by denying entitlements of, or claims by, ‘foreign’ actors (second layer). 2.2. Territorial Sovereignty and the Public-Private Divide An important additional building block in contextualizing ‘territorial sovereignty’ in the global economic sphere is the public-private divide. This division is of relatively recent origin; it emerged in the mid-nineteenth century14 and ‘was critical to liberating market forces from state regulation’15 and ‘closely associated with the idea that the market was a neutral, apolitical institution for allocating liability and maximizing productivity.’ 16 On a domestic level, the division has the effect of insulating economic activity from State regulation through the fiction that statehood or government is principally neither about, nor affected by, the (private) economic sphere and thus presumptively not legitimized in interfering with it. In the transnational context, it explains the migration of the law on crossborder economic activity from State-based public international law to domestic private law, i.e. private international law. For the purposes of this discussion, the public-private division holds two important insights. First, as shown in the next section, there are clear parallels in the trend of opening borders for wealth acquisition and closing them to prevent leakages to the outside in both sets of cases. Second, in terms of international law, locating economic activity within the ‘private’ sphere shapes the intersection of territorial sovereignty and the global economic sphere. The private cloak turns what would otherwise be significant inroads into, and infractions of, territorial sovereignty into unexceptional economic activity that leaves territorial sovereignty perfectly intact, even in its divisible dimension. Private interests in land, whether held by domestic or foreign actors, are – as a matter of law – incapable of diminishing sovereignty. This is regardless of whether such ownership has profound impacts on the national economic sphere, governmental function and indeed the living space for the local population. Sassen, for example, documents the steep rise worldwide (2006-2012) of foreign land acquisitions, particularly in the Global South, through sales, leases and concessions by ‘governments, sovereign wealth funds, foreign firms, nationally based foreign corporations and investment banks’ for biofuels, notably palm oil plantations, foods crops and forests,17 often with drastic consequences for the local populations, including their expulsion: 14 Consistently, the term ‘private international law’ was first used by Joseph Story, Commentaries on The Conflicts of Law (Hilliard, Gray, 1834). 15 JR Paul, ‘The Isolation of Private International Law’ (1988) 7 Wisconsin International Law Journal 149, 163. See also Alex Mill, ‘The Private History of International Law’ (2006) 55 International and Comparative Law Quarterly 1, 44. 16 Paul ibid 153. P.K. O’Brian, ‘Fiscal and financial preconditions for the rise of British naval hegemony, 14851815’ (2007, LSE, Economic History Department, Paper 91). 17 Saskia Sassen, ‘Land Grabs Today: Feeding the Disassembling of National Territory’ (2013) 10 Globalizations 25, 29ff.; Phillip McMichel, ‘Land Grabbing as Security Mercantilism in International Relations’ (2013) 10 Globalizations 47; Saskia Sassen, Expulsion - Brutality and Complexity in the Global Economy (Belknap Press, 2014). 6 ‘[T]hey transform sovereign national territory into a far more elementary condition – land for usufruct. This process brings with it a degrading of the governments that sold and leased the land. It evicts farmers and craftspeople, villages, rural manufacturing districts, smallholder agriculture districts, all of which degrades the meaning of citizenship for local people. And when there are no long-term inhabitants, these acquisitions often include uses that poison water, air, and land. Such material practices reconstitute parts of national territory.’18 As private property cannot – as a matter of law – threaten territorial sovereignty, private activities are, paradoxically, given greater latitude to ‘interfere’ with the affairs of a State than would be tolerated in the case of foreign public acts. In theory the State remains the final authority over all the land and activities within its boundaries. However, the State’s power to impose public interest restrictions, e.g. through planning laws, labour laws, or environmental or health and safety standards,19 let alone to resist or reverse certain foreign investments, is frequently severely restricted. Sovereign authority, particularly in developing countries, will often have been signed away to the International Monetary Fund (IMF), the World Bank, or WTO via commitments to trade liberalisation, privatisation, deregulation and security of property rights, as conditionality in return for loans, development aid and access to foreign markets.20 Yet although in these cases, the State’s restrictive competence vis-à-vis foreign economic actors is compromised, its facilitative competence vis-à-vis the same actors, in term of granting and then maintaining cheap access to resources and labour, is fully functioning. For the purposes of this discussion, the ‘private’ sphere may be understood as creating a third layer of legal meaning vis-à-vis territorial sovereignty in so far as ‘private’ activity, interests and actors are – as a matter of law or legal fiction – taken to be incapable of even coming into contact with State sovereignty. When the State sells land or grants mining concessions to foreign actors or allows other economic activities on its territory, its sovereignty is not transferred or limited in the way that it would be if it was subject to a commitment under an international or regional treaty or an agreement with the IMF. This has the tandem effects of giving the private sphere freer rein and less visibility and thereby also less public scrutiny. 3. Inconspicuous ‘Border Guards’ and Preventing ‘Leakages’ of Capital This section explores the one-way porosity of territorial borders created through jurisdictional rules as applicable to public or regulatory law falling broadly within the ambit of public international law and then in the context of crossborder tort claims as governed by private international law. Despite the significant differences in factual contexts, legal claims, legal spheres, and national legal traditions, the pattern from the rules – as implemented by national judiciaries - shows an explicit or implicit bias against foreign victims of local corporate wrongdoers. The location of the victim within or without the borders is often the touchstone of success. The State - through the judiciary applying and enforcing local law 18 Sassen (2013) ibid 40. Dine, above n 6. 20 See e.g. Eurodad, World Band and IMF conditionality: a development injustice (Eurodad Report, June 2006) 19 7 stops compensation being ‘repatriated’ across its borders to those with a legitimate claim. To argue that the State thereby simply fulfils its legitimate function to protect its economy, and locally established actors against foreign claims21 is to acknowledge the role of the State in ring-fencing local capital, thus indirectly perpetuating global inequities. ‘Borders’ are the legal construct that facilitate such ring-fencing, and the judiciary becomes the de-facto border guard. 3.1. Regulatory Law and the ‘Presumption against Extraterritoriality’ in US Litigation In crossborder criminal, regulatory and other public law contexts, territoriality or territorial sovereignty is ‘implemented’ through various domestic legal mechanisms. Classically, in common law jurisdictions the well-known maxim ‘all crime is local’ was directly connected to territorial sovereignty in MacLeod v Attorney General for New South Wales (1891).22 Lord Halsbury explained the maxim by stating that ‘jurisdiction over the crime belongs to the country where the crime is committed.’23 Despite the apparent simplicity of this maxim, in the global economy, much activity is located across countries. Here resort to legal fictions such as conduct crimes or result crimes have been used to legitimize the assertion of jurisdiction by a State.24 These legitimations occur broadly against the background of public international law which defines actual spatial boundaries of States with relative precision,25 but is much more ambivalent about the extent of the authority that attaches to that space. That authority can expand or contract depending on how readily a State relies upon a territorial link in respect of a particular transnational activity. The rules on State jurisdiction, as infamously widely defined in the Lotus case,26 and their flip side concept, the principle of non-intervention,27 are nothing but broad-brush principles that first reflect, and then allow for, much discretion on the part of States: ‘[States] find their interests affected by the acts of others and attempt to influence those acts. They do so by internal development of culture, economy, and power; by achievements in technology, science, literature, and the arts; by international 21 Jean Gottmann, The Significance of Territory (The University Press of Virginia, 1973) Chapter 2, reflecting on the ‘security’ and ‘opportunity’ function of territory; further discussed in Shaw, above n 8 (referring to the needs for security, stability and identity). 22 In MacLeod v Attorney General for New South Wales [1891] AC 455. 23 Ibid 458. 24 Matthew Goode, ‘The Tortured Tale of Criminal Jurisdiction’ (1997) 21 Melbourne University Law Review 411. The effects and conduct tests were also discussed in Morrisons v National Australia Bank Ltd 130 S Ct 2869 (2010) (see below). 25 But for the occasional boundaries disputes. 26 The Case of the SS ‘Lotus’ (France v Turkey) (1927) PCIJ Reports, Series A, No. 10, 18, where the court commented that ‘the first and foremost restriction imposed by international law upon a State is that … it may not exercise its power in any form in the territory of another State. In this sense jurisdiction is certainly territorial.’ 27 Art 8 of the Montevideo Convention on Rights and Duties of States (1933); The Final Act of the Conference on Security and cooperation in Europe 9the Helsinki Declaration on Principles Guiding Relations between Participating States) 1 August 1975, 14 ILM 1292; see also Article 2(7) of the UN Charter. Charles W Kegley Jr, Gregory A Raymond, Margaret G Hermann, ‘The Rise and Fall of the Nonintervention Norm: Some Correlates and Potential Consequences’ (1998) 22 Fletcher Forum of World Affairs 81. 8 communication utilizing radio, press, popular periodicals and technical journals; by the travel and trade of their citizens; and by official utterances, legislative action, and diplomatic correspondence. International law is faced with the issue: When does proper influence become illegal intervention?’28 Although the non-intervention principle is a crucial backstop for the stability of the global legal and political order, it generally comes into its own in cases of the use of force and other interferences by one State in the public affairs of another, but has much less to offer with respect to the economic sphere, even where the laws, as in the presumption cases below, have a strong public or regulatory dimension and cannot simply be dismissed as private law matter.29 Consistently it is not surprising that the ‘presumption against extraterritoriality’ which is another common law mechanism that ‘implements’ territorial sovereignty, has generally been understood as being based not on the demands of international law, but rather on the fact that a State legislature must generally be taken to have legislated only with domestic concerns in mind.30 This is persuasive given that a presumption is, on its own terms, always liable to be rebutted. Thus the possibility of extraterritorial jurisdiction is implicit in the presumption, and thereby documents the permissiveness of international law, even if affected States have occasionally objected to such extraterritoriality on the grounds of interference with their sovereignty. Crucially for this discussion, it needs to be noted that whilst international law is relatively silent on the boundaries of territorial authority, States have self-imposed those borders in some situations but not others. The question is: in what circumstances do they decide to erect these borders? Recent US case law offers a rich commentary on the presumption against extraterritoriality, as a canon of statutory interpretation and in particular on the circumstances when US courts advocate territorial restraints in the name of the presumption. In the anti-trust case of F Hoffman-La Roche Ltd v Empagran SA (2004),31 a number of companies including US companies were shown to have colluded in price-fixing. The defendant companies succeeded in excluding foreign victims from the litigation in respect of the harm they had suffered, by invoking the presumption against extraterritoriality for the Sherman Antitrust Act 1890.32 The US Supreme Court reasoned that the presumption was operative in respect of the foreign claimants and it did not matter that these harms were ‘intertwined with’ domestic price-fixing:33 28 Sean Watts, ‘Low-intensity Cyber Operations and the Principle of Non-intervention’ (2014) SSRN 7. See also Military and Paramilitary Activities in and against Nicaragua[1986] ICJ Rep 14, para 205: ‘Intervention is wrongful when it uses methods of coercion… The element of coercion… defines, and indeed forms the very essence of prohibited intervention.’ 29 The US has a long and controversial history of using private enforcement mechanisms for regulatory matters, such as antitrust enforcement, securities fraud, etc, see e.g. Daniel A Crane, ‘Optimizing Private Antitrust Enforcement’ (2010) 63 Vanderbilt Law Review 675. 30 William S Dodge, ‘Understanding the Presumption against Extraterritoriality’ (1998) 16 Berkeley Journal of International Law 85. 31 F Hoffmann-La Roche Ltd v Empagran SA 124 S Ct 2359 (2004). 32 Following the Foreign Trade Antitrust Improvements Act 1982 the Sherman Act 1890 does not apply to foreign commerce unless that commerce significantly harms domestic commerce i.e. has a ‘direct, substantial, and reasonably foreseeable effect’ on it. 33 F Hoffmann-La Roche Ltd v Empagran SA 124 S Ct 2359 (2004). 9 ‘But the higher foreign prices of which the foreign plaintiffs here complain are not the consequences of any domestic anticompetitive conduct that Congress sought to forbid, for Congress did not seek to forbid any such conduct insofar as it is here relevant, i.e. insofar as it is intertwined with foreign conduct that causes independent foreign harm. Rather Congress sought to release domestic (and foreign) anticompetitive conduct from Sherman Act constraints when that conduct causes foreign harm.’34 So, despite the United States’ strong antitrust tradition, the Court’s interpretation of the statute expressly immunized local companies from antitrust obligations vis-à-vis foreign claimants. It means that US companies can collude on higher prices for foreign customers, when the same behaviour would attract severe sanctions in respect of the local market. The Court’s relatively frequent appeal to customary international law and respect for state sovereignty appears hollow when one considers its aggressive antitrust stance towards foreign defendant companies that impact on the US market.35 Subjecting a foreign company to local penal or quasi-penal law when that law has no equivalent in the foreign company’s home jurisdiction would appear to be far more interventionist, than allowing foreign victims to benefit from local law where local companies were involved in the wrongdoing. It is certainly unlikely that States would consider the latter an inference with their sovereignty. Similarly, the Supreme Court also applied the presumption against extraterritoriality to the Securities Exchange Act 1934 in Morrisons v National Australia Bank Ltd (2010)36 where the fraudulent misrepresentation of a US subsidiary of an Australian company led to an overvaluation of the latter’s shares and caused loss to Australian investors, who had purchased those shares on non-US stock exchanges. The Court reasoned that in the absence of specific language in the Act, ‘context can be consulted as well’ and then found that the Act focused ‘not upon the place where the deception originated, but upon purchases and sales of securities in the United States.’37 Thus Australian investors could not hold USA fraudsters accountable under the Act. It may be argued that given that the Act establishes criminal offences with severe penalties for security fraud, the Act’s focus would be, like criminal law generally, on the inherently reprehensible act, rather than on the harm caused. The Court also reasoned that the reference to ‘national public interests’ in the Act’s definition of security transactions ‘pertains [not] to transactions conducted upon foreign exchanges and markets’38 and dismissed the Solicitor General’s arguments of the purposes of the Act: ‘achieving a high standard of business ethics in the securities industry, ensuring honest securities markets and thereby promoting investor confidence, and preventing the United States from becoming a “Barbary Coast” for malefactors perpetrating frauds in 34 F Hoffmann-La Roche Ltd v Empagran SA 124 S Ct 2359, part IV (2004) [emphasis in the original]. Scott A Burr, ‘The Application of U.S. Antitrust Law to Foreign Conduct: Has Hartford Fire extinguished Considerations of Comity?’ (2014) 15 University of Pennsylvania Journal of International Law 221. 36 Morrison v National Australia Bank Ltd 130 S Ct 2869 (2010); discussed in Genevieve Beyea, ‘Morrison v. National Australia Bank and the Future of Extraterritorial Application of the U.S. Securities Laws’ (2011) 72 Ohio State Law Journal 537; Rachel Doyle, ‘The Presumption against Extraterritoriality: Pakootas v Teck Cominco Metals Ltd. and Transboundary Environmental Harm After Morrison v. National Australia Bank Ltd.’ (30 May 2013) SSRN . 37 Morrisons v National Australia Bank Ltd 130 S Ct 2869, 2883f (2010). 38 Ibid [emphasis in the original]. 35 10 foreign markets.’39 These purposes were ‘admirable’ but of no further concern to the Court. By implication domestic actors are free to commit fraud abroad.40 Notably various States, including the United Kingdom (UK), France and Australia, filed amicus curiae briefs arguing against the extraterritorial application of the Act. The UK brief stated that ‘the broad assertion of extraterritorial jurisdiction by the United States courts implicates the legitimate sovereign interests and policy choices…’41 Contrary to appearances, this objection is not driven by the concern that UK investors may successfully sue US corporations for securities fraud, but rather that the Act would also be extended to securities fraud by UK corporations.42 This in turn makes these objections entirely consistent with the proposition advanced here, namely the State’s essential role as a shield for protecting local economic interests from foreign claims, regardless of their merit, within a global economy. In both Empagran and Morrison, the decision to impose borders around the US through the presumption occurred against the background of open border trade in vitamin pills and securities, respectively, within the Global North. The subsequent selective erection of borders in order to ring-fence local corporate capital is symptomatic of the competitiveness of States within the globalized marketplace. This competitiveness is not particularly problematic given the relative equality of the State participants in the above cases, even if it may be criticized for insidiously reinforcing nationalism. However, the analysis changes when the claims originate from States with much less economic power, as in many cases that were brought under the Alien Tort Statute (ATS) and alleged corporate human rights abuses in the Global South. The US Supreme Court put most of these claims to bed in Kiobel v Royal Dutch Petroleum Co (2013)43 and it did so by invoking the presumption against extraterritoriality.44 The 200-year old Alien Tort Statute had been successfully adapted to allow ‘aliens’ to sue in tort for egregious breaches of human rights committed outside the US, generally in the Third World, and invariably by transnational corporations (TNC). In Kiobel it was Nigerian farmers that alleged Shell’s complicity in ultraviolent Nigerian military crackdowns to supress protests by the Ogoni community against the environmental devastation caused by Shell’s operation. The Supreme Court held that the presumption against extraterritoriality was not displaced by the Act and thus it was only claims that ‘touch[ed] and concern[ed] the territory of the United States… with sufficient force’ which fell within the scope of the Act.’45 The Court further commented: ‘Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices.’46 Notably since then foreign corporations have been expressly excluded from ATS claims in Jesner v Arab Bank (2018).47 It is also noteworthy that, in previous ATS case against Shell Plc it had already been established that Shell’s ‘presence’ in the US was not a ‘mere 39 Ibid. Ibid. 41 Brief of the United Kingdom of Great Britain and Northern Ireland as Amicus Curiae in Support of Respondents, 29 Morrison 130 S Ct 2869 (No 08-1191) at 2; discussed in Beyea, above 36 , 555f. 42 David Greene, ‘The US ruling on Morrison v NAB deals a blow to the international claims culture’ (28 June 2010, The Guardian). 43 Kiobel v Royal Dutch Petroleum Co 133 S Ct 1659 (2013); discussed in Kohl, above n 5. 44 All nine judges of the Supreme Court agreed that the case should be dismissed for lack of a sufficient connection with the US. 45 Kiobel v Royal Dutch Petroleum Co 133 S Ct 1659 (2013) [emphasis added]. 46 Kiobel v Royal Dutch Petroleum Co 133 S Ct 1659 (2013) [emphasis added]. 47 Jesner v Arab Bank 584 US_ (2018). 40 11 corporate presence’ but a ‘presence’ that was sufficient to satisfy the normal due process requirement under the US constitution, i.e. the minimum contacts test that makes it fair and reasonable to sue a defendant in the US.48 Of course, that test is usually invoked by local claimants against foreign defendants rather than by foreigners, or ‘aliens’ as expressly permitted by the ATS. For the latter, the Court created a higher threshold; and thus again the foreignness of the victim became a touchstone of legal accountability. Equally, it also remains contentious whether the ATS should extend to human rights claims against corporations at all on the basis that international criminal law is arguably not applicable to corporate actors.49 Certainly States have shown a lot of resistance to such corporate liability.50 In conclusion, Kiobel is a prime example of the legally institutionalized hostility to foreign claims as inversely proportionate to the protectiveness of local corporate actors. Having said that, the ATS which dates back to 1789 appears on its face remarkably internationalist in character, most notably, by creating an explicit cause of action for foreign claimants, i.e. ‘aliens’.51 In fact, the ATS was not so much aimed at foreign claimants, but rather at claimants within the US who had been denied remedies on the basis of their foreign citizenship,52 which makes the Act rather more unexceptional by contemporary standards. 3.2. English Tort Litigation Whilst the presumption against extraterritoriality is applicable to legislation and thereby, in the context of the economic sphere, generally to more deliberate regulatory or public law interventions, this part explores to what extent the systemic bias against foreign claims is also evidenced in the private law sphere. The case examples are Lungowe & Ors v Vedanta Resources Plc & Anor (2017)53 and Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) (2018)54 in which victims of the operations of subsidiaries of English parent companies in the Global South brought negligence claims against the parent companies in English courts. The question is to what extent the foreignness of the victims becomes the touchstone of corporate accountability and the legitimacy of that position.55 The additional legal barriers in transnational cases flow from the rules of private international law, which are used to decide when to erect national borders or, more precisely, their relative porosity vis-à-vis foreign entitlements. The English tort litigation bears close resemblance to ATS litigation, which was discussed above. An essential difference, however, is that ATS litigation is steeped in human rights 48 Wiwa v Royal Dutch Petroleum Co 226 F3d 88 (2d Cir 2000). Kiobel v Royal Dutch Petroleum Co 621 F3d 111 (2d Cir 2010). 50 Kohl, above n 5. 51 Unusually, the ATS also gives individuals the rights to sue for a breach of international law which is under classic international law is a right reserved to States. 52 John Haberstroh, ‘The Alien Tort Claims Act & Doe v. Unocal: A Paquete Habana Approach to the Rescue’ (2004) 32 Denver Journal of International Law and Policy 231, 239ff. 53 Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, affirming Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975. 54 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, affirming Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89. 55 See also AAA & Ors v Unilever Plc & Anor [2017] EWHC 371. 49 12 discourse which makes it more potent and controversial in equal measures - raising the stakes on both sides of the conflicts. Still the tort litigation before English courts arises out of similar factual scenarios that would make human rights-based language not inappropriate, even if not easily accommodated within the framing of these claims as simple torts under domestic civil law. Human rights language is traditionally reserved to the ‘public’ sphere occupied by state authority. That these mere tort cases ultimately concerned the use of significant and valuable natural resources and de facto touched upon matters of important public interests and public regulation, or their absence shines through the fact each of them involved thousands of claimants. 3.2.1. Removal of Protective Shields: Corporate Veil and Forum Non Conveniens There are two distinct legal developments that preceded recent corporate tort litigation and paved its way. Their effect was to remove protective shields from English law that TNCs (and their Home States, here the UK) have relied upon to distance the parent from the liabilities of their foreign subsidiaries; subsidiaries that are frequently undercapitalized, or are defunct by the time of the action. First, although the doctrine of the separate legal personalities of each company within a group has for some time been susceptible to circumvention via negligence claims,56 the legal formalism in the treatment of the group as a multitude of completely separate legal units has remained a foothold of global corporate unaccountability.57 Yet, in Chandler v Cape Plc (2012)58 where Mr Chandler suffered asbestosis contracted many years before as an employee of Cape’s subsidiary, the Court of Appeal made a chink in the corporate armour when it provided a strong affirmation of the possibility of direct parent liability: ‘[T]he law may impose on a parent company responsibility for the health and safety of its subsidiary's employees. Those circumstances include a situation where… (1) the businesses of the parent and subsidiary are in a relevant respect the same; (2) the parent has, or ought to have, superior knowledge on some relevant aspect of health and safety in the particular industry; (3) the subsidiary's system of work is unsafe as the parent company knew, or ought to have known; and (4) the parent knew or ought to have foreseen that the subsidiary or its employees would rely on its using that superior knowledge for the employees' protection.’59 56 Chandler v Cape Plc [2012] EWCA Civ 525, para 40-42, 66, referring to the more recent English cases of Lubbe v Cape Plc [2000] UKHL 41, para 20f (Lord Bingham). See also Connelly v RTZ Corporation (1999) CLC 533 and Ngcobo v Thor Chemicals Holdings Ltd & Ors (Jan 1996, Unrep, Maurice Kay J). 57 Janet Dine, ‘Jurisdictional arbitrage by multinational companies: a national law solution? (2012) 3 Journal of Human Rights and the Environment 44. 58 Chandler v Cape Plc [2012] EWCA Civ 525; discussed in Daisuke Ikuta, ‘The Legal Measures against the Abuse of Separate Corporate Personality and Limited Liability by Corporate Groups: the Scope of Chandler v Cape Plc and Thompson v Renwick Group Plc’ (2017) 6 UCL Journal of Law and Jurisprudence. For a more general critique of separate personalities of companies in a group and limited liability, see e.g. Hugh Goodacre, ‘Limited Liability and the wealth of “uncivilised nations”: Adam Smith and the limits of the European Enlightenment’ (2010) 34 Cambridge Journal of Economics 857. 59 Chandler v Cape Plc [2012] EWCA Civ 525, para 80. 13 Although the court ‘emphatically’ rejected that it pierced the corporate veil, the imposition of a direct duty of care based on the ‘assumption of responsibility’ by the parent to the employees of the subsidiary has the same substantive effect.60 The court was also at pains to say that its test was not a net that would catch every parent company and depended on the particular relationships between the companies in the group.61 Yet equally, it was not willing to fix such liability only to parent companies where their control over the subsidiary went over and above the normal incidents of parent-subsidiary relationship. The fact was that Cape’s group was entirely ‘normal’: the parent exercised financial control over capital expenditure, parent and subsidiary had common directors, and the parent controlled certain activities of the subsidiary.62 Furthermore, the court stressed that the ‘systemic failure’63 in the subsidiary’s health and safety practices showed that Cape ought to have taken steps or given advice on the basis of its superior knowledge on health and safety and its group policy in this respect.64 Again, one might ask to what extent such superior knowledge is anything other than fairly standard for corporate groups, given the need for centralized decision making on the group’s business activities to ensure its overall profitability. In short, the Cape group was a ‘normal’ corporate group and its behaviour was (and is) by no means atypical. What was not so typical for a negligence claim against the parent of a TNC is that Chandler was a purely domestic case as Mr Chandler had suffered asbestos exposure in a factory near Uxbridge in England, and arguably herein lies the reason for the unusual robustness of the judgment to corporate group wrongdoing. 65 The corporate personality presented an obstacle to intra-State justice delivery rather than a device for inter-state economic ring-fencing. If Chandler unwittingly dealt a blow to TNCs in England for potential negligence arising out of their overseas operations,66 the second development in Owusu v Jackson and Others (2005)67 removed a jurisdictional hurdle TNCs have also long appropriated for their purposes: the common law doctrine of forum (non) conveniens. What started off as a highly restrictive doctrine metamorphosed - both in the US and in England68 - into a much wider discretionary rule in the mid-1970s: 60 Chandler v Cape Plc [2012] EWCA Civ 525, para 69. The ‘assumption of responsibility’ test addresses the second and third element (proximity and ‘fair, just and reasonable’) in the test for a duty of care, established in Caparo v Dickman [1990] 2 AC 605, see Chandler v Caple Plc [2012] EWCA Civ 525, para 62. 61 Chandler v Cape Plc [2012] EWCA Civ 525, para 67. 62 Chandler v Cape Plc [2012] EWCA Civ 525, para 44f. 63 Chandler v Cape Plc [2012] EWCA Civ 525, para 57, 72, 77. 64 Chandler v Cape Plc [2012] EWCA Civ 525, para 71-73, 78 – 80. 65 Similarly, in Connelly v RTZ Corporation Plc [1998] AC 854, where the claimant Edward Connelly was domiciled in Scotland. 66 Note, in the litigation in Zambia and Nigeria, discussed below, the common law system of both States takes account of legal developments in England and Wales and thus Chandler’s ratio extends at least to parts of the former British empire. Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 56-61. 67 C-281/02 Owusu v Jackson and Others [2005] ILPr 279; Adrian Briggs, ‘The Death of Harrods: Forum Non Conveniens and the European Court’ (2005) 121 Law Quarterly Review 53;. Jonathan Harris, ‘Stay of Proceedings and the Brussels Convention’ (2005) 54 International and Comparative Law Quarterly 933. 68 This shift was effected In the US by Piper Aircraft Co v Reyno 454 US 235 (1981), and in England by The Atlantic Star [1974] AC 436, followed by MacShannon v Rockware Glass Ltd [1978] AC 795 and Spiliada Maritime Corp v Cansulex Ltd [1986] UKHL 10. 14 ‘The approach to transnational forum non conveniens cases began shifting away from abuse of process thinking toward a most suitable forum approach… No longer would it be necessary to inquire whether retaining jurisdiction… would vex, harass, or oppress the defendant; instead the focus came to be the deceptively simple question of whether the forum selected by the plaintiff was inappropriate because of the lack of contacts between the forum and the dispute.’69 Whilst the doctrine may be used to hail a foreign defendant before a local court, it is also employed to stay cases against local defendants. Thus in both instances it is directed towards protecting the State’s economic interest by insisting on remedying local harm (first instance) and by not refusing to remedy local wrongdoing that caused harm abroad (second instance). This second application of the rule must be understood against the context that bringing a claim to the defendant is widely considered the most appropriate default jurisdiction.70 It is the fairest to the defendant and also eases the enforceability of any eventual judgment.71 Yet, the newer wider forum non conveniens version could be used by defendants to argue for the removal of claims from their home turf. Under the prior narrower version it would have been ‘impossible for such a defendant to make a credible claim of vexation or harassment.’72 It was not long before TNCs routinely used the wider doctrine to seek to avoid local accountability to foreign claimants, and often, but not always, successfully so,73 most infamously in the US negligence case arising from the Indian Bhopal disaster, killing more than 2000 people.74 Already in the 1980s, commentators pointed out that far from furthering the ‘comity of nations’ as claimed by judges, the doctrine often spelled the end of a case, rather than its beginning somewhere else.75 In the early 2000s, one commentator observed that ‘[t]he doctrine had proven time and again to be a significant obstacle for plaintiffs in developing countries who are seeking to sue a U.S.-based transnational corporations in the United States.’76 In the North-South divide, it functions to ring-fence gains from the Global South within the Global North. The powerful connections between international trade and tort law, public interest concerns and territoriality as ‘implemented’ through forum non conveniens shines through Paul’s incisive analysis in 1988: ‘In weighing the interests of the United States in hearing the case, the court suppressed United States public policy concerns, such as the significant foreign relations and trade consequences, as well as the impact on United States regulatory policy, implicated by the Bhopal accident. For example, presuming that Union 69 David M Robertson, ‘Forum non conveniens in America and England: a “rather fantastic fiction”’ (1987) Law Quarterly Review 398, 405f. 70 In civil law jurisdiction, the default jurisdiction is based on the ‘domicile’ of defendant, and in common law jurisdiction on the ‘presence’ of the defendant in the forum. 71 For the difficulties of enforcing a foreign judgement see e.g. Adams v Cape Industries Plc [1990] Ch 433. 72 Robertson, above n 69. 73 Not successful in Lubbe v Cape Plc [2000] UKHL 41. 74 In re Union Carbide Corp Gas Plant Disaster 809 F 2d 195 (2d Cir. 1987); criticized by Joel R Paul, ‘The Isolation of Private International Law’ (1988) 7 Wisconsin International Law Journal 149, 168ff. See also Malcolm J Rogge, ‘Towards Transnational Corporate Accountability in the Global Economy: Challenging the Doctrine of Forum Non Conveniens in In Re: Union Carbide, Alfaro, Sequihua, and Anguida’ (2001) 36 Texas International Law Journal 299, 302f. 75 Robertson, above 69, 409, 420. 76 Rogge, above n 74, 299. 15 Carbide sought to move the case to India to avoid the potentially greater liability imposed by United States tort law, the United States had a strong interest in retaining jurisdiction in order to discourage the export of jobs… [T]he application of forum non conveniens insulates United States companies manufacturing abroad from strict United States regulatory standards and coincidentally undermines those domestic standards by forcing United States and foreign regulatory authorities to compete for scarce investment capital.’77 This analysis still holds currency three decades later; decades that have witnessed an intensification of the ‘race to the bottom’, as described by Paul, as well as the large-scale relocation of manufacturing to developing countries – with forum non conveniens providing the necessary backing. Notably, this backing also entails costs for the Global North, for example, through the loss of jobs and pressure towards lower regulatory standards. From a corporate perspective, however, forum non conveniens is an essential tool to retain gains made through such forum shopping. Although forum non conveniens has never been part of the EU jurisdictional regime,78 its application appeared to be intact for disputes that involved an English defendant being sued in England where the alternative venue for the action was a court from a non-Member State,79 i.e. the scenario in many would-be TNC negligence cases. This position was changed when the Court of Justice of the European Union (CJEU) in Owusu firmly applied the European jurisdictional regime to this type of scenario. In the name of legal certainty, it removed any discretion not to hear a case based on forum non conveniens, whenever a claimant sued a defendant in its domicile in England.80 One criticism of the ruling has been that it allows European preoccupation with principle and State interest to trump English pragmatism and ‘priority to doing justice to the parties’.81 This seems disingenuous given that the decision respects the claimant’s choice and places the action at the doorstep of the defendant. It also addresses the reality that a successful forum non conveniens plea is more often than not the end of the case rather than justice in the making. Perhaps the judgment should be understood as a ‘principled’ drive to extend transnational solutions considered fair and reasonable in the intra-European context (with limited capacity for corporate forum-shopping) to wider European-global interactions and disputes. There is certainly evidence to suggest that the CJEU was aware of the wider implications of the judgment for TNCs and their overseas operations.82 Yet, the facts in Owuso itself are rather atypical in that not only was the first defendant a British national domiciled in the UK, but so was the 77 Paul above n 74, 170. Now contained in Regulation (EU) 1215/2012 of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). 79 Re Harrods (Buenos Aires) Ltd [1992] Ch 72; applied, for example, in Lubbe v Cape Plc [2000] UKHL 41. 80 Case C-281/02 Owusu v Jackson [2005] I-1383, para 36: ‘the Brussels Convention precludes a court of a contracting state from declining the jurisdiction conferred on it by Article 2 of that Convention on the ground that a court of a non-contracting state would be a more appropriate forum for the trial of the action, even if the jurisdiction of no other contracting state is in issue or the proceedings have no connecting factors to any other contracting state’. 81 Trevor C Hartley, ‘The European Union and the Systematic Dismantling of the Common Law of Conflict of Law’ (2005) 54 International and Comparative Law Quarterly 813, 815. 82 Opinion of the Advocate General Léger delivered on Case C-281/02 Owusu v Jackson [2005] I-1383, para.. Note Briggs above n 67, 539, observed: ‘the court saw perfectly clearly the nature of the iceberg being floated towards it, and pressed the nuclear button.’ 78 16 claimant Mr Owuso who had injured himself on his holiday in Jamaica, where five further defendants were located. Thus comparable to Chandler, the Owuso scenario was not concerned with ‘foreign’ victims. Briggs commented that ‘[t]he real, if collateral, victims of the ruling were the five Jamaican defendants, who knew that a claim against the English defendant would exercise a strong gravitational pull on those raised against them.’83 Wittingly or not, the judgment has had the effect of opening the gate, i.e. border, for victims in the Global South to sue TNCs in Europe. This decision is an outlier within the ‘normal’ judicial protective attitude towards local corporations vis-à-vis their responsibilities for harm caused beyond their borders. So how have Chandler and Owuso been put to the test in claims by victims from the Global South? 3.2.2. Zambian Copper The English tort case of Lungowe & Ors v Vedanta Resources Plc & Anor (2017)84 provides a microcosm for the legacy of colonialism and its continuation through TNC activities that are facilitated by State ‘territoriality’. Zambia’s copperbelt is well known; its initial exploitation was tied up hand and foot with British colonialism, at first, via the British South Africa Company, a chartered company acting on behalf of the British government, and from 1924, under the status of a self-governing British protectorate, through the Anglo-American Corporation of South Africa. Following its independence in 1964, Zambia in part nationalized its copper industry, but struggled to make the mining sustainable and was not helped by the fall in the international price of copper in the mid-1970s.85 Partly under pressure from the IMF and the World Bank,86 and partly given its need for funding the long-term development of the industry through rehabilitation of the mines and new sourcing of ore, 87 the government reversed the nationalization in the 1990s. Notably a key stakeholder in the privatization of the industry was the Anglo-American Corporation, the very company that had been at the heart of US and British imperialist mining ambitions in Southern Africa. 88 All in all, Zambia had control over its copper resources via government majority shareholdings for about three decades, but ultimately (and this is inextricably linked with its developmental stage), it lacked the capital and know-how to make it work. The mine at the centre of the Lungowe dispute has been in operation since 1937 and was then owned by the Anglo-American Corporation. The company was partly nationalized in 1970, with a 51% stake held by State-controlled companies, but again privatised in the 1990s. In 2004 the first defendant, Vedanta Resources Plc, an English holding company, acquired its 51% stake in the Konkola Copper Mines Plc (KCM),89 the Zambian company 83 Briggs above n 67, 536. Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, affirming Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 292. 85 John Craig, ‘Putting Privatisation into Practice: The Case of Zambia Consolidated Copper Mines Limited’ (2001) 39 The Journal of Modern African Studies 389. 86 Ibid 390, 394f. 87 Ibid 392. 88 Ibid. 89 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 13: “KCM was incorporated in Zambia as a public limited company for the purpose of privatising the mine. It was 65% owned by KCM Holdings SA (an Anglo-American subsidiary), and 35% by ZCCM-Investment Holdings Plc, a State-owned company ("ZCCM"). In 2002, Anglo-American Plc withdrew from KCM. In 2004, Vedanta Resources Holdings 84 17 running the mine and the second defendant in the case, and increased its stake to a 79% stake in 2008. The remaining 21% of the share capital was held by the Zambian State. KCM employs 16,000 people in Zambia, most of them in the mine, and is thereby the largest private employer in Zambia.90 The class action in England was brought by 1826 Zambian citizens who were largely subsistence farmers ‘earning considerably below the national average in Zambia... [which] is one of the world's poorest countries.’91 There was some indication that a further 1000 claimants would join the action.92 The allegations were that KCM’s Nchanga copper mine had, since 2005, polluted their local waterways and land upon which they depended for their agrarian livelihoods and daily lives. They sought damages for personal injury, damage to property, loss of income and loss of amenity as well as of enjoyment of land arising out of pollution and environmental damage caused by the mine. In stark contrast, the first defendant, Vedanta, a UK holding company, was extremely wealthy, with its worth estimated at around £37 billion. It had 19 employees, eight of whom directors, whilst its subsidiaries worldwide employ 82,000 people.93 Despite this and not atypically, its Zambian subsidiary, KCM, was, according to the court, in ‘significant financial difficulties’.94 The Court of Appeal affirmed the lower court judgment to allow the actions against both Vedanta, the UK parent company, and KCM, the Zambian subsidiary, to go ahead in England. It rejected the various arguments brought against either claim for staying the proceedings in favour of a Zambian court. In essence the claim against Vedanta was judged sufficiently genuine and strong to justify proceedings in an English court. This presents a significant victory for trans-national equity in the global North-South divide – despite the facts that the ruling only concerned a preliminary issue and that the combination of Chandler and Owuso would appear not to allow for any other outcome. The preliminary issue of deciding in which State a dispute can or cannot be heard is in most of these cases not preliminary in a substantive sense at all, but outcome-determinative.95 Typically in this case, an insistence by the English court that the dispute must be decided before a Zambian court would have spelled the end of it for a combination of powerful reasons, as discussed by the courts: a lack of funding and the unavailability of Conditional Fee Arrangements, a dearth of relevant private lawyers, a hostile judiciary and doubts about the enforcement and enforceability of any judgment, however unlikely, against the subsidiary, given its financial status and the general lack of political will to do so.96 The court did not mention that the dispute also implicated the Zambian government as part-owner Limited ("VRHL"), a subsidiary of Vedanta (the first defendant), acquired a 51% interest in KCM, the remaining 49% being held by ZCCM.’ 90 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 16. 91 Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, para 124. 92 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 9. 93 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 15. 94 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 79f. 95 The parties to the action often treat the case like full trials with the disapproval of the judges Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 40 and Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 9,10,12,14, referring with approval to VTB Capital Plc v Nutritek International Corp [2013] 2 AC 337 ‘…hearings concerning the issue of appropriate forum should not involve masses of documents, long witness statements, detailed analysis of the issues, and long argument. It is self-defeating if, in order to determine whether an action should proceed to trial in this jurisdiction, the parties prepare for and conduct a hearing which approaches the putative trial itself, in terms of effort, time and cost.’ 96 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 169-198; Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, para 113-135. 18 and operator of the mine. Furthermore, a decision to allow the case to go ahead in England virtually never leads to a trial, as the corporate defendants do not wish for the alleged facts to be closely scrutinised in a public forum, and thus settle the case out of court which thereby disappears from public view.97 A preliminary decision on jurisdiction already brings to light many of the facts, but from a corporate perspective it is important that they remain allegations. That Chandler and Owuso were difficult precedents for Vedanta and KCM to overcome, is reflected in the Court of Appeal decision: ‘It is the combination of Owusu v Jackson on the one hand, and Chandler v Cape on the other, that underpinned the vast majority of Mr Hermer's submissions [for the claimant]. In essence, although he was too polite to say so directly, his submission was that this court had no option but to refuse both these applications and to accept jurisdiction to deal with these proceedings as they are presently constituted.’ 98 Yet, no matter how difficult, the stakes were high for the Vedanta Group. A favourable ruling for the claimants would not just entail compensating the claimants, but also set a precedent for other like claimants to come forward 99 and thereby create pressure on the Vedanta Group and like TNCs to raise their environmental, health and safety and labour standards in the Global South – well above those required by local host law. In other words, it would fly in the face of the very design of the international trading system that encourages forum-shopping. Thus the lawyers for Vedanta and KCM came up with a host of arguments to undermine the validity and application of the above two precedents, albeit unsuccessfully this time. Their arguments were directed at reinforcing the organizational separateness of the two companies to undermine the substantive negligence claim against Vedanta, and at playing the territorial card by either trying to send the entire case to Zambia (for reasons mentioned above) or, at least, the action against Zambian KCM. This latter option was second best but still capable of weakening the claim against Vedanta, the real focus of the action. Figuratively speaking, the defendants’ argument sought to separate ‘mind’ (parent) from ‘body’ (subsidiary) or, to borrow from criminal law, mens rea from actus reus, and further reinforce that separation through State borders. The High Court and the Court of Appeal were in agreement that if one were to focus only on KCM, the ‘factors point overwhelmingly to the conclusion that the fundamental focus of the litigation is Zambia,’100 i.e. the claimants were Zambian, the polluted land and waterways are in Zambia, and KCM is a Zambian company with an operating licence under Zambian law. Indeed, it is correct that the harmful act and harm itself occurred in Zambia, but the mastermind behind it was Vedanta, located in London. The very reason why Zambia re-privatized its copper industries and invited 97 See, for example, Lubbe v Cape Plc [2000] UKHL 41. Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, para 44. 99 See Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 38-41, recounting the ripple effects of the Bodo litigation: The Bodo Community and others v Shell Petroleum Development Company of Nigeria Ltd [2014] EWHC 1973 (TCC). 100 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 153; Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528., para 105f. 98 19 Western companies to take over its copper operations lies in that very fact. Technical knowhow and capital is what Vedanta had to offer to turn the mine around, and that was not just a remote technical or financial reality, but one forcefully felt on the ground, as reflected in the words of a former KCM employee: ‘[O]nce Vedanta took over KCM, working practices changed significantly. It became clear that cost cutting was the supreme objective. This compromised other areas of work… Almost all senior positions at KCM were given to people from Vedanta Group companies… when Vedanta took over most of the existing management and operational policies were discarded or became irrelevant.’101 So despite the tangible effects of the defendants’ actions in Zambia, the argument that the focus of the litigation is Zambia is not so overwhelming once one considers the real culprit behind the wrongdoing. The decisions, whether strategic or operational, and the drivers leading to the harm suffered in Zambia were squarely located in England.102 Fault is a key element in any negligence claim and the gist of that fault rested with Vedanta, not KCM, in London. The courts implicitly recognized this by holding that the action against Vedanta, the parent, was not just a ‘device’ in order to create a territorial ‘anchor’ in England for the claim against KCM to be also heard in England, but that there was a ‘real issue to be tried’ between the claimants and Vedanta.103 The claimants had to show, at this preliminary stage, that its action against Vedanta was ‘not bound to fail’, and this they did. Although, unlike in Chandler, Vedanta was a holding and not an operating company, the court held that Chandler’s ‘assumption of responsibility’ was still established because Vedanta had claimed oversight over KCM’s polluting activities and had such oversight in fact, as evidenced by its public statements about its governance frameworks with titles such as ‘Embedding Sustainability’ and public commitments in relation to KCM’s infrastructure, its intercompany management agreement with contractual promises for the provision of relevant training and technology, and its actual practices of controlling the activities of the subsidiary through its employees.104 In corporate groups the ‘mind’ (corporate know-how) and ‘body’ (corporate operations) are frequently centred in different companies. Company law, however, conveniently presumes that every company has its own mind,105 which insulates the controllers of economic activity 101 Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, para 84. Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 78: ‘there is some evidence that the claimants wish to pursue Vedanta because they are seen as the real architects of the environmental pollution in this part of Zambia. The argument is that, since it is Vedanta who are making millions of pounds out of the mine, it is Vedanta who should be called to account. I acknowledge that this argument has some force.’ 103 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 163. The relevant jurisdictional gateway for an out-of-forum defendant was the ‘necessary or proper party’ gateway in Practice Direction, Part 6B, 3.1(3). of the Civil Procedure Rules, which requires a local ‘anchor’ defendant, i.e. Vedanta. 104 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 199; Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528, para 84, 90. 105 Under company law, every company has to have a board of directors and it is the duty of the directors to act in the best interest of the company. 102 20 from the consequences of their decisions.106 By the same token, whilst ‘follow-the-money’ is commonly used as a legal tool to disrupt illicit or harmful activity,107 corporate groups use the corporate veil, as created and upheld by the State and its courts, to counter this approach for affixing legal accountability. Still, through negligence law after Chandler, it has been possible to examine the real substantive links between companies and acknowledge their ‘proximity’ – despite company law.108 In addition to the corporate layer, territoriality creates another buffer zone in crossborder claims which has, in the past, often closed the door to justice deliberations through devices such as forum non conveniens. That buffer zone was weakened by Owuso, as applied in Lungowe, and thus some of the revenue made by Vedanta at the expense of the Zambian community is now bound to be repatriated, through a settlement, to Zambia. Much like Owuso, Lungowe provides for the possibility of inter-national equity and is thereby fundamentally out of line with the design of the international trading system that encourages forum shopping, as generally supported by the judicial tendency to protect that system by ring-fencing local corporate capital from foreign claims. 3.2.3. Nigerian Oil Zambia’s copper is Nigeria’s oil, and there are significant similarities in the central role the wealth of their natural resources has played in their colonial and post-colonial past and present. Equally there are strong parallels in facts and legal arguments between Lungowe and the slightly later case of Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) (2018)109 which concerned Shell’s oil operations and attendant pollution in Nigeria. The case presents on all levels an intensified version of Lungowe and thus sharply crystallized the unsettling economic implications of applying Owuso and Chandler for TNCs and their home States. However, for the time being that threat has been averted; the Court of Appeal, with a 2:1 majority, affirmed the lower court’s judgment and refused to allow the case to go ahead in England. The majority opined that the Nigerian claimants had no ‘real issue to be tried’ against Royal Dutch Shell Plc (hereafter RDS or Shell Plc), the English parent company, and was ‘bound to fail’ at trial. This threshold test has emerged as the de-facto replacement for forum non conveniens in the corporate armoury, albeit one that requires a closer engagement with the substantive allegations against the corporate group. A hint of the strong aversion by the judiciary towards this and like claims shines through the Chancellor’s concluding remarks: ‘I might mention in closing that I thought throughout the hearing of the appeal that the court had a responsibility in a case of this kind not to strive to find a reason to allow jurisdiction. I became increasingly convinced as the argument progressed that the ultimate claim against RDS could simply never succeed. These thoughts may not 106 The security of parent holding company is further consolidated by undercapitalising ‘operational’ subsidiaries. 107 See, for example, in copyright infringement on the internet, money laundering and financial fraud. 108 There are isolated examples of domestic company law that is less tolerant of corporate structuring as a means to minimise corporate irresponsibility; see, for example, Dine, above n 57. 109 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, affirming Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89. 21 be relevant to our decision, but they do endorse, I think, the correctness of the legal conclusion that we and the judge have ultimately reached.’110 The Chancellor did not elaborate on why the court had ‘the responsibility in a case of this kind’ not to allow for it to go ahead in England, nor what ‘a case of this kind’ is. However, it seems that there were strong extra-legal considerations with which the legal outcome was coincidentally consistent. What are ‘cases of this kind’ to trigger such judicial responsibility? If Lungowe involved a group claim by 1,826 Zambians, the joint cases in Okpabi concerned the claims of 42,335 Nigerians of the Ogale community and the Bille Kingdom in Nigeria, whose livelihoods and health were affected by the massive and long-standing pollution of wide areas of land and water across the Niger delta directly or indirectly caused by Shell’s oil pipelines. Like in Lungowe, the High Court acknowledged that ‘[t]here is no doubt that the claimants are all, or mostly all, very poor, and both the defendant companies are very wealthy. Oil is a lucrative business.’111 The defendants were Royal Dutch Shell Plc, the UK holding company of the Shell group, and Shell Petroleum Development Company of Nigeria Ltd (SPDC), a Nigerian exploration and production subsidiary within the group, that was part of a joint venture for the extraction of oil. Unlike in Lungowe, the Nigerian government had not just a stake but a majority stake through the Nigerian National Petroleum Corporation (NNPC) in the joint venture with Shell.112 Although this means that it was deeply implicated in the wrongdoing and formally more so than Shell, this was barely acknowledged in the judgments, presumably on the basis that Shell’s real control over the joint venture in light of Nigeria’s eagerness to facilitate a favourable FDI environment can be taken for granted.113 If Vedanta had a complex group structure, Shell’s structure involved no less than 1367 different companies, consisting of holding, operating and service companies located in 101 countries.114 Even its central decision-making Executive Committee had a dispersed membership from different Shell companies, with only a minority being executives of Shell Plc and thus it was questioned whether its decisions could or could not be attributed to Shell Plc.115 The core issue was, like in Lungowe, whether England was the proper place to try the claims against the local parent and foreign subsidiary, based on the parent being an appropriate ‘anchor’ defendant. Thus all hooked on the strength of the claim against Shell Plc,116 but again at this preliminary stage the claimant only had to show that there was a ‘real issue to 110 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 208 [emphasis added]. Note in the case against Shell Plc, it was not a matter of finding a reason to allow jurisdiction but rather to disallow what was effectively established by default against a local defendant. 111 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 89. 112 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 116. 113 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 197. 114 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 81. 115 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 39: ‘In 2005, the Shell Group was reorganised and RDS came into existence. At this point the RDS Executive Committee ('ExCo') was established. In addition to the CEO and CFO, it consists of the head of each of RDS's Global Businesses. Although there is a factual dispute about its functions and at [101] the Judge said that he did 'not equate decisions taken by [ExCo] with decisions taken by RDS', I would regard ExCo as carrying out material functions in relation to the business which are attributable to RDS for present purposes.’ 116 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 18-19. 22 be tried.’117 The idea here is to weed out early completely unmeritorious and speculative claims; claims that are ‘fanciful’, have no ‘real prospect of success’118 and are ‘bound to fail’ e.g. where a Crown immunity would lead to a dismissal of the claim.119 Given the early stage, the test necessarily provides a ‘relatively low threshold’.120 Still, the High Court and the majority of the Court of Appeal insisted that this low threshold had not been met, even though the three judges disagreed with each other on the admissibility of the evidence, its strength or relevance in showing that Shell Plc exercised central control over its Nigerian operations to satisfy the negligence ‘proximity’ requirement.121 This in itself suggests that the claim was perhaps not as unarguable as made out. Sales LJ in his dissent did not seem to consider the case as borderline at all: ‘there is a very real – and far more than a speculative – possibility that documents will emerge on disclosure which will provide substantial support for their case at trial.’122 After all, at this early stage, the claimants were in terms of witnesses largely dependent on those ‘who were willing to act in a certain sense as whistleblowers.’123 The case ultimately hinged on the level of control Shell Plc had over the damaging activities of its Nigerian subsidiary. As a matter of law, the narratives by the different judges about the level of control needed to satisfy Chandler’s ‘proximity’ test varied: the majority referred to ‘day-to-day’ control124 in contrast to Sales LJ’s references to ‘real’, ‘functional’, ‘practical’ and ‘material’ control and ‘proactive’ involvement.125 The majority’s insistence on such close control appears inconsistent with Chandler’s more substantive approach, according to which that it was ‘not necessary to show that the parent is in the practice of intervening in the health and safety policies of the subsidiary… [as long as there is] a practice of intervening in the trading operations of the subsidiary, for example production and funding issues.’126 On the facts and rather counterintuitively, Shell Plc’s strong centralised control over the group, both actual and publicised – as evidenced by its global mandatory policies, standards and manuals on safety, security, environment and social issues and on design and engineering practices and its oversight over their implementation – worked against the claimants’ case.127 According to the majority, it was simply not enough to show that the Nigerian subsidiary had no autonomy as long as that lack did not go over and above that of other 117 Practice Direction Part 6B, 3.1(3) of the Civil Procedure Rules: ‘A claim is made against a person ('the defendant') on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and (a) there is between the claimant and the defendant [here Shell Plc Plc] a real issue which it is reasonable for the court to try; and (b) the claimant wishes to serve the claim form on another person [here SPDC] who is a necessary or proper party to that claim.’ 118 Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645; AK Investment CJSC v Kyrgyz Mobil Tel Ltd and Others (Known as Altimo) [2011] 4 All ER 1027; Adrian Briggs, Private International Law in English Courts (OUP, 2014) 350. 119 The Brabo [1949] AC 326. 120 Cherney v Deripaska [2008] EWHC 1530; Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975, para 98. 121 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 186-189, 194. 122 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 171. 123 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 168. 124 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 127,200, 205. 125 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 141, 142, 153, 162, 164, 172. 126 Chandler v Cape Plc [2012] EWCA Civ 525, para 80. 127 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 89, 118-129, 140, but see Sales LJ para 172 (vi). 23 Shell subsidiaries or, for that matter, of subsidiaries more generally.128 The reason for this was that any other decision would have undermined the entire Shell artifice. Yet, it also means that TNCs can effectively avoid accountability based on a high level of control, as long as it is standardised over its operations. So whilst in the domestic case of Chandler engaging in nothing other than ‘normal’ parental practices did not preclude accountability, in the international setting it did: ‘The detailed policies and practices… apply across the board to all RDS subsidiaries… without distinction. [I]t would be surprising if an international parent were to owe duties to those affected by the operations of all its subsidiaries and that there needs to be something more specific… [I]t would be surprising if a parent company were to go to the trouble of establishing a network of overseas subsidiaries with their own management structures if it intended itself to assume responsibility for the operations of each of those subsidiaries. The corporate structure itself tends to militate against the requisite proximity.’129 Indeed, in the global setting the corporate structure is created and used to allow for legal irresponsibility vis-à-vis overseas operations, and the State facilitates this marketplace of national normativities by upholding company law and disallowing international standard convergence through negligence law. For TNCs such marketplace of normativities facilitates cheap production or cheap extraction of resources without suffering accountability for the harms caused by it. This system would be fundamentally reversed by upholding claims in a ‘case of this kind’, as it would allow for a backflow of wealth to the State of origin. Beneath the technical arguments and the institutionalised language, Okpabi exposes and challenges the profound inequities in the contemporary global marketplace and as such the interests at stake were enormous on both sides. According to the High Court, the parties occupied ‘firmly entrenched battle lines and… [were] bitterly opposed to one another's evidence and arguments.’130 According to Sales LJ, there was ‘at least a possibility, given the size of the claim’ that Shell’s subsidiary in Nigeria would become insolvent.131 These were not ‘mere’ tort claims; these were claims that pitched Nigerian communities with no hope of support from their own government and with a long standing history of exploitation by the West, first through governments and then TNCs, against a UK/Dutch corporate powerhouse.132 They were demanding compensation for the damage caused to their land, as judged by the standards considered appropriate and civilised by an English court. Given the scale of the actual case, i.e. 42,335 claimants, and the distant threat of many more like claimants making like claims, it is not surprising that Cardozo CJ’s classic warning in 128 See, for example, Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 205: ‘Any parent is concerned to ensure sound financial management, but the fact that spending decision required parental approval is not an indication that RDS controlled SPDC’s operations.’ 129 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 195f. 130 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 17. 131 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 150. 132 Goodacre, above n 58, 865, comments that possible restraints of corporate power vis-à-vis colonial th populations did not come from English company law of the 19 century but was ‘rather associated with the advances in liberation from colonial ties in the second half of the twentieth century, only to be increasingly circumvented in step with the capitalist revanchism and resurgence of corporate power in its final decades.’ 24 Ultramares Corporation v Touche (1931)133 of ‘liability in an indeterminate amount, for an indeterminate time, to an indeterminate class’ made it into the various judgments. Essentially it was used to show why Shell Plc could or must not be considered ‘proximate’ to the claimants.134 Of course, just because there are many claimants does not mean that their number was indeterminate. As Sales LJ, rightly pointed out: ‘a claimant who owns land in the vicinity of the pipeline which is damaged by oil spilling from it… will be a member of a determinate class who suffers loss at a determinate time and in relation to a determinate amount, by reference to the impact on the value of his land.’ 135 Just because TNCs, like Shell, have the capacity to injure many in their pursuit of maximum profit and in fact do so, does not mean that they should be able to avoid accountability on the basis that they have injured many. Yet, this is exactly what the global legal framework – as a combination of permissive public international law, international trade law facilitating competing national normativities, aid conditionality and domestic corporate law – allows and encourages them to do. The majority in Okpabi felt obliged to honour this legal framework rather than upset it through opening the (territorial) gates to wronged foreign populations via permitting a negligence claim. 4. Conclusion Public international law discourse on sovereignty, territoriality and borders is worlds apart from discourses around various areas of domestic law with territorial implications. Examples of the latter are the presumption against extraterritoriality as a domestic rule of statutory interpretation, the procedural law of forum non conveniens or private international law more generally or the economic ordering through company law. International law has higher ambitions and nobler intentions: ‘At least part of the reason we value IL is that it offers to improve the lives of real individuals, billions of them – men, women, and children – in the world. Formalistically, we say that the subjects of IL are national sovereigns and that the people of the world are rather like chattels belonging to the sovereigns. But nobody wants to be heard saying that sort of thing nowadays, at least outside the towers of narrow scholasticism. The real purpose of IL and, in my view, of the ROL [rule of law] in the international realm is not the protection of sovereign states but the protection of the populations committed to their charge. People are not now regarded just as chattels of the sovereign powers, if they ever were.’136 Despite these noble ambitions for the ‘protection of populations’, international law does not get its proverbial hands dirty by getting involved in the domestic law quarrels between populations and global corporations. In the four lengthy judgements of the Lungowe and Okpabi litigation, the only brief implicit hints at international law appear in the High Court Okpabi judgement which was overall the least sympathetic to the claims of the foreign 133 Ultramares Corporation v Touche (1931) 174 NE 441, 444. Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 114, Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 128 135 Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191, para 143, see also para 172 (vi). 136 Jeremy Waldron, ‘Are Sovereigns Entitled to the Benefit of the International Rule of Law?’ (2011) 22 The European Journal of International Law 315, 325. 134 25 populations. The judge’s references to the ‘sovereign’ State of Nigeria were designed to bolster Shell’s defence, rather than the claims of the victims.137 He cites with approval Shell’s anti-regulatory argument that: ‘[a]llegations of the existence of a risk that justice will not be done in a foreign sovereign state have been advanced in the course of the last few months in… [various cases]. It is notable that these assertions are being advanced by the same firm of solicitors in relation to three very different sovereign states... [T]he fact that such allegations appear to be capable of being made with such apparent frequency and ease serves to underline the importance of Lord Collins's warnings as to the need both for extreme caution on the part of the Court when considering such allegations and of cogent evidence in relation to such allegations.’ 138 The fact that Shell sought refuge behind the concept of sovereignty goes to the root of this chapter’s argument about the symbiotic relationship between territoriality and globalization or sovereign statehood and TNCs. Shell can feel fairly secure in its reliance on the sovereign State of Nigeria to protect its oil operation in Nigeria and on the sovereign State of the United Kingdom to protect it from the claims of wronged foreign populations. Conversely for these wronged populations neither sovereign State provided any support. Despite the overt absence of public international law in transnational litigation, the main point of the case studies above is to show how territoriality is deeply embedded in what may appear to be relatively insignificant procedural or technical domestic rules. These rules ‘implement’ the territorial State and, in the application of these rules, it is judges who create and recreate the territorial State in a be-fitting way. They are the border guards who determine payment obligations across borders and accountability or, as the case may be, unaccountability. As argued here, the tendency of the law in its application is to ring-fence local capital from foreign claims of entitlement which in turn is perfectly aligned with the wider international trade law framework. In some of the US cases on the presumption against extraterritoriality the location of the victim, within or without, is made the explicit touchstone of accountability. In contrast, no such open acknowledgment of discrimination is appropriate in civil tort litigation with its normal focus on the rights of the individual rather than on State interest. Yet, the discomfort of the judges with these foreign claims is palpable. Last but not least, the silence of international law in the above litigation bears testimony to the wilful blindness of international law to the private (economic) sphere which, as argued above, belongs to the third layer of legal meaning of authority vis-à-vis territorial sovereignty. The fact that Shell’s Nigerian oil operations pollute vast areas of Nigerian territory with significant implications for the local population is entirely unexceptional within the framework of international law where TNCs as private actors are structurally under the ultimate control of the sovereign State and thereby outside the formal purview of international law critique. Still, if the real purpose of international law is indeed ‘the protection of the populations committed to the charge [of sovereign States]’, international lawyers must get their hands dirty and get involved with the transnational private sphere 137 138 Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, aara 34, 86, 121. Okpabi & Ors v Royal Dutch Shell Plc & Anor [2017] EWHC 89, para 34 [emphasis added]. 26 and private international law where the real battles between populations and corporations are fought - with the latter, so far, being nicely cocooned by the territorial State. 27