As to the respondents’ own evidence, it is submitted that, among other things, this shows: (i) that SPDC operates the pipelines in question pursuant to a joint venture agreement between itself, the NNPC and two other parties (with the majority interest held by NNPC); (ii) that SPDC is responsible for its own operations, including the implementation of group-wide standards; (iii) that SPDC is better placed than RDS to deal with the alleged harm, including because SPDC possessed superior knowledge and experience regarding oil operations in Nigeria; (iv) that SPDC is a major operating company in its own right and is financially independent; and (v) that RDS does not have a high level of oversight of SPDC’s day-to-day operations.
As Vedanta makes clear, there is no special test applicable to the tortious responsibility of a parent company for the activities of its subsidiary (see paras 49 and 54), nor is it appropriate “to shoehorn all cases of the parent’s liability into specific categories” (para 51).
First, to the extent that the Court of Appeal indicated that the promulgation by a parent company of group wide policies or standards can never in itself give rise to a duty of care, that is inconsistent with Vedanta. [143].
At para 52 of Vedanta Lord Briggs said that he did not consider that “there is any such reliable limiting principle”. He pointed out that:
“Group guidelines … may be shown to contain systemic errors which, when implemented as of course by a particular subsidiary, then cause harm to third parties.” [145]
(Second) As Lord Briggs pointed out at para 49 in Vedanta, it all depends on: “the extent to which, and the way in which, the parent availed itself of the opportunity to take over, intervene in, control, supervise or advise the management of the relevant operations … of the subsidiary.”
-147. In considering that question, control is just a starting point. … But control of a company and de facto management of part of its activities are two different things. A subsidiary may maintain de jure control of its activities, but nonetheless delegate de facto management of part of them to emissaries of its parent.
A specific example of a case in which a duty of care may arise regardless of the exercise of control is provided by what the appellants have described as Vedanta route (4). This is based on what Lord Briggs stated at para 53:
“… the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken.” [148]
It would be wrong, however, to approach the issue of whether a duty of care is owed by reference to any generalised assumption or presumption. As Lord Briggs stated at para 51:
“There is no limit to the models of management and control which may be put in place within a multinational group of companies. At one end, the parent may be no more than a passive investor in separate businesses carried out by its various direct and indirect subsidiaries. At the other extreme, the parent may carry out a thoroughgoing vertical reorganisation of the group’s businesses so that they are, in management terms, carried on as if they were a single commercial undertaking, with boundaries of legal personality and ownership within the group becoming irrelevant …” [150]
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