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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> King Felix Sunday Bebor Berebon & Ors v The Shell Petroleum Development Company of Nigeria Ltd  EWHC 1377 (TCC) (24 May 2018)
Cite as:  EWHC 1377 (TCC)
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| King Felix Sunday Bebor Berebon & Others
|- and -
|The Shell Petroleum Development
Company of Nigeria Limited
Geraint Webb QC, Adam Heppinstall and Ognjen Miletic (instructed by Hogan Lovells International LLP) for the Defendant
Hearing dates: 22 May 2018
Crown Copyright ©
Mrs Justice Cockerill:
i) the Restoration Application to be adjourned to a date to be fixed;
ii) that the Defendant was to inform the Claimants and the Court (after receipt of further information) as to whether the Defendant was to continue to contend that the Restoration Application was a nullity; and if so
iii) the Substitution Application and the nullity issue were to be heard before Coulson J (if possible) on the first open date after 1 October 2017;
iv) Costs were reserved.
"F. In circumstances in which the issues of clean-up and remediation of the Bodo Creek (as defined in accordance with paragraph 1 below) are the subject of an independent mediation led by the former Dutch Ambassador to Nigeria, the Claimants' Clean-up Claims as defined in paragraph 16 below shall be stayed and shall be struck out if not restored in accordance with paragraph 16.
G. The parties enter into and will implement this Agreement in a spirit of cooperation and good faith in the expectation that it will reduce the work that is required for the trial set down for May 2015 (the "trial") and, if possible, facilitate an early resolution of those Claims. This Agreement shall be interpreted and enforced so as to ensure that the Parties abide by the intentions and objectives, set out herein, upon which this Agreement is based."
As Coulson J noted, the establishment of the BMI was the driving force behind the Narrowing Agreement.
"Claim for injunctive relief or damages in lieu of clean-up and remediation
16. The Claimants shall not pursue their claims in relation to clean-up and remediation of the Bodo Creek and in particular their claims for injunctive relief or damages in lieu of the same (the "Clean-up Claims") and the Clean-up Claims shall be stayed until further order and shall be struck out automatically at 4:00pm on the date two calendar years from the date of this Agreement (the "Strike Out Date"). This Agreement is subject to the Claimants being at liberty to apply to the Court to restore the Clean-up Claims for trial by 4:00pm on the date seven days prior to the Strike Out Date.
17. Save for paragraph 16 above and this paragraph 17 the Clean-up Claims shall not be subject to this Agreement."
As noted above, the Narrowing Agreement then set out an agreement by the defendant to pay substantial compensation to the claimants in respect of their other claims.
"That part of the New Bodo Community Claim relating to clean-up and remediation … will be stayed until further order and shall be struck out automatically at 4:00pm on the date two calendar years from the date of the Narrowing Agreement (the "Strike Out Date"); the Claimants being at liberty to apply to the Court to restore for trial those parts of the New Bodo Community Claim …, any such an application to be issued and served by 4:00pm on the date seven days prior to the Strike Out Date."
" Recital C … The Parties agreed to the [BMI] … to find mutually acceptable basis for BODO to grant SPDC access to clean-up and remediate oil polluted areas in BOB without prejudice to the existing litigations in local and foreign courts … The Parties agreed to collaborate and partner in order to achieve the following aims:
(i) clean-up remediate and restore the agreed oil polluted areas ….
(iv) building trust and confidence between the Parties through mutually agreed activities/programmes, and dialogue processes, guided by the independent chairperson and advisers.
1. BMP comprising of Working Groups (including a technical Working Committee) a Steering Committee and a Plenary (general assembly/overall decision making body), will continue to cover all relevant aspects and activities related to the mediation. The Plenary reviews and endorses the proposals by the Working Groups, the overall work plan and approves the Project Director for the clean-up, remediation and restoration works.
2. The clean-up, remediation and restoration of the Identified Areas in BODO will be carried out in accordance with Nigerian law, by reputable contractors with proven international track record and experience with large scale clean-up, remediation and restoration works in a complex environment approved by the BMP Plenary…
4. SPDC will be responsible for the cost of clean-up, remediation and restoration of the Identified Areas under consideration, including the related bidding and contracting processes which shall be in accordance with the Joint Operating Agreement of SPDC, based on the recommendations of the Technical Working Committee and taking into account the applicable approval procedures of the relevant Nigerian authorities, including the National Petroleum Investment Management Services (NAPIMS).
5. In order to ensure that the clean-up, remediation and restoration of the Identified Areas is achieved, Bodo will grant and maintain unfettered access to SPDC, the Project Director, the Contractors and all persons performing or related to the performance of the clean-up, remediation and restoration works of the Identified Areas.
6. The day-to-day implementation of the clean-up, remediation and restoration work plan for the Identified Areas in BODO will be guided and supervised by the Project Director…"
"As I explained to you in December when I told you about the settlement proposal, the clean-up part of your claim has been 'stayed' in the High Court in London. What this means is that this part of the claim has not been concluded but instead has been put on hold for a period of 2 years from October 2014. That should mean that if clean-up does not commence before October 2016, your community could instruct us to take the matter back before the British Judge.
When the Dutch Ambassador to Nigeria began lobbying Shell on your behalf we felt that it would be a good idea to give that initiative an opportunity to succeed as it has a good chance of working. We understand that international contractors have been appointed. It is therefore important that the process is given a chance to succeed before we consider intervening. If we find that the clean-up is not being done to a sufficient standard we will speak with you and if the Community instructs us to we will return to court to try to force Shell to clean-up to an international standard. However, until we allow that clean-up to start we cannot assess it to see whether it is being done to an international standard so it is extremely important that the clean-up is allowed to start.
I would also like to stress that there is no pot of money available for clean-up that could be shared instead of being used for clean-up. If the clean-up of the Bodo creek is prevented from going ahead then Shell can simply walk away, the British courts would very likely decide not to get involved and the Bodo creek will not be cleaned. There is no alternative to clean-up. It is therefore imperative that the clean-up is allowed to go ahead as the Bodo creeks are your and your families' future livelihood.
The option to return to court is a last resort and this option will not be available to you if you do not allow the clean-up to start. I appeal to you to allow the clean-up to commence and then we can assess the situation after it has started early next year."
i) A new Council of Chiefs was appointed on 21 August 2017.
ii) The Community leadership completed the withdrawal of the various claims for injunctions preventing clean-up.
iii) The Community agreed to allow the appointed contractors the necessary access to the relevant areas, such as to enable the BMI to give the green light to allow the contractors to start clean-up operations.
iv) Six days after the sealing of Coulson J's Order on 1 September 2017, clean-up contractors obtained the requisite access to sites from the Bodo Community and "Phase 1" of clean-up (the removal of free-phase oil) re-started. Phase 1 is expected to be completed by the end of June 2018.
v) Regulatory approval was obtained in December 2017 for Phase 2 (remediation) and "Phase 3" (restoration). It is hoped that the tendering processes for these phases will be completed and contractors appointed, by about October 2018, with mobilisation of those contractors to site to begin Phase 2 work shortly thereafter.
vi) It is hoped that Phase 3 will commence one year after the commencement of Phase 2 (October 2019) and run in tandem with the remainder of phase 2.
vii) The end point of the clean-up process remains unknown.
i) The Substitution application: this is not contentious.
ii) The Restoration application: this concerns the question of the period for which any stay should be ordered and the conditions to be attached to it, if any.
The Substitution Application
"in their offices to use their best endeavours to procure compliance by all members of the Community… with the clause 5 obligation and upon notice of any breach of the clause 5 obligation by any member of the Bodo Community to take all reasonable steps available to them to restrain such a breach including if necessary legal action".
The Restoration Application
i) The appropriate test to consider is that enunciated by Coulson J. Absent any successful argument in relation to abuse of process (which was not made by SPDC on this application) the Claimants have an unfettered right of access to the Court.
ii) Absent any ground to oppose the restoration, SPDC have no basis on which to seek to ask the Court to impose conditions, still less draconian conditions on the stay.
iii) Whether the test is satisfied must be determined at the time of the application to lift the stay. Any imposition of conditions would be premature or unnecessary; there is no case of wrongdoing pursued in this hearing and the correct route to police any wrongdoing is either via opposition to restoration or an application to strike out.
iv) Any conditions would need to be justified by a guiding principle and firm findings enabling a limitation of the basic right of access, and both were lacking here. Nor is the Court equipped at this time to make such findings.
v) There is nothing in SPDC's finality argument which offers a suitable guiding principle which counterbalances the right of access.
vi) Coulson J did not suggest that any stay would be subject to conditions – only that a restoration would be subject to conditions.
vii) Further SPDC's proposed conditions are objectionable, inter alia, as breaching the principles which indicate that a party cannot be compelled to participate in ADR, as insufficiently reflecting SPDC's responsibilities outside of paying for the clean-up (eg if a contractor fails properly to progress the clean-up) and as being disproportionate as triggering strike out in the event of any breach by any member of the community.
viii) An unfettered stay of 2 years (to May 2020) would strike the appropriate balance.
i) Any stay should be for a short and finite period.
ii) The case is now very stale, having been commenced in 2013 and the remainder settled in 2014. The effect of the stay sought would be to take the case past its 9 year anniversary.
iii) Allowing a stay without conditions would be to indicate that rolling stays would be forthcoming ad infinitum, which must be wrong. There is a genuine and important interest in finality both for the parties and for the Court.
iv) The logic of the stay was to allow clean-up to start and progress under the auspices of the BMI as contemplated by the Narrowing Agreement, and to give the Claimants some appropriate level of comfort in relation to the BMI process before the litigation was brought to an end. That point has now been reached, or will have been reached by October of this year.
v) Any stay should be subject to conditions. Coulson J had indicated that any future stay would be on conditional terms and the parties had agreed this in principle.
vi) SPDC's proposed order reflects the parties' primary obligations and therefore offers appropriate reinforcement of the parties' voluntary commitments to the BMI process whilst minimising the risk of the continuation of this litigation acting as an incentive to elements of the Bodo Community to frustrate the BMI process. It also provides an appropriate degree of certainty and finality.
i) Is lifting the stay at all necessary?
ii) For how long should the stay be granted?
iii) Should it be granted on terms and if so, what terms?
"No application to restore and/or to strike out the Clean-Up Claim shall be made during the currency of the said stay, save:
(a) by the Claimants in the event of a breach of clause 4 of the MoU on the part of the Defendant which is of sufficient seriousness to cause the irretrievable breakdown of the BMI
(b) by the Defendant in the event of a breach of clause 5 of the MoU on the part of members of the Bodo Community which is of sufficient seriousness to cause the irretrievable breakdown of the BMI."
A further sub-paragraph was also proposed to each of (a) and (b) as an alternative. This stated: "the failure of the BMI process to make reasonable progress in relation to the clean-up in accordance with clauses 1 to 3 of the MOU". It was included apparently as a nod to the Claimants' position in correspondence which was that conditions had to be linked to progress on the ground by means of milestones.
"48. The starting point is that the stay should be lifted if that is in accordance with the overriding objective (CPR 1.1) and if it is in accordance with the requirements of justice (Jameel). The issue as to whether that would be an appropriate and proportionate use of the court's resources automatically falls for consideration under r.1.1. The burden of satisfying this test is on the party who wishes to lift the stay.
49. It is not appropriate to tilt the playing field or 'load' the test to be applied in any particular way (for example, by identifying presumptions or making repeated references to the need for 'exceptional circumstances' to be shown in order to prevent the stay being lifted). Each case will turn on its own facts. "
" There may ... be cases which fall short of being an abuse of process or having no reasonable ground for continuance but which, in all the circumstances, might still lead a court to conclude that, ... the stay should be refused."
"…the BMI process remains the best way (perhaps the only way) in which the remediation scheme can be achieved. For their own sake, the claimants therefore need to cooperate with the BMI in every way. The consequences of not doing so are stark."
i) Provision of adequate information to enable the Bodo Community to understand the progress of the BMI process and participate in it seems to be inherent in the MoU and in particular Recital C(iv) of that document;
ii) To the extent that the actual process for bringing this about as set out in clause 1 of the MoU is not operating effectively (eg. because, as I am told, Working Groups are not active and Plenaries are few and far between) it would plainly be desirable for the parties to put in place an alternative route by which information can be disseminated;
iii) At the same time the kinds of concerns which SPDC highlighted as to provision of material which is confidential or in the process of evaluation are real. A balance has to be struck. It cannot be the job of the Bodo experts attending the weekly meetings to make this decision. As I indicated in the course of argument one route may be to ensure that Minutes are recorded and provided which do not deal with matters which it would be inappropriate or premature to disseminate;
iv) In the event that the parties cannot come to some way forward by agreement there appears to be a likelihood of a further hotly fought dispute coming before this court under the aegis of this claim. I make no comments about the basis for or prospects of such an application; however, one can be confident that it would increase still further the costs incurred by both parties in this matter. That would be a highly undesirable result.