King Felix Sunday Bebor Berebon & Ors v The Shell Petroleum Development Company of Nigeria Ltd

These proceedings are the same as proceedings which came before Coulson J, as he then was, in case [2017] EWHC 1579. They concern land in and around Bodo Creek, in Nigeria, which was the subject of two oil spills in 2008.

So far as concerns the background to the claim I summarise this below - borrowing heavily and with gratitude from the summary in that case.

Prior to the commencement of these proceedings, the defendant, SPDC, who operated a pipeline in the area as part of a joint venture with the Nigerian National Petroleum Corporation, admitted liability in respect of those spills under the Nigerian Oil Pipelines Act 1990 (“the OPA”). The procedural history is somewhat complex, but in essence, 18 claimants brought claims in these proceedings on a representative basis. They originally sought damages and a mandatory injunction requiring the defendant to cleanup the area, or damages in lieu of an injunction.

On 20 June 2014, Akenhead J handed down a judgment which resolved a variety of preliminary issues between the parties, in particular as to the availability of relief at common law ([2014] EWHC 1973 (TCC)). Thereafter, in October 2014, the parties reached an agreement, referred to as the Narrowing Agreement, pursuant to which a settlement agreement was outlined for all claims, save in respect of the clean-up claim (i.e. the claim for a mandatory injunction or damages in lieu). Following a four day mediation, all but the clean-up claim was settled by an agreed payment by the defendant of £55 million. That final settlement was reflected in a Consent Order approved by Akenhead J in January 2015.

The clean-up claim was stayed for two years and was to be struck out in October 2016, although the claimants had liberty to apply to restore that claim before that date. The stay was to allow the remedial scheme to be put in hand under the auspices of the Bodo Mediation Initiative (“BMI”).

An application was made to restore the claim and lift the stay in October 2016. That was initially opposed by SPDC essentially on grounds described as nullity and abuse of process/obstruction, but by the time of the hearing it was SPDC’s submission that the application should be adjourned.

That application, as Coulson J notes, was supported by full evidence running to 7 lever arch files and giving rise to costs bills of hundreds of thousands of pounds.

Coulson J adjourned the Restoration Application. The Court ordered:

It is that adjourned application, with some additions, which is before me today.

So far as the relevant chronology is concerned I again borrow heavily below from Coulson J’s summary at paragraphs 6 to 21 of his judgment.

The starting point for present purposes is the Narrowing Agreement which was dated 22 October 2014. Recital E removed a variety of issues from the litigation including the volume of oil released in the spills and allegations in respect of the defendant's conduct prior to, during, and since the spills. Recitals F and G were in the following terms:

Clauses 16 and 17 of the Narrowing Agreement provided:

There was a 'Consent Order To Go With The Narrowing Agreement', dated 31 October 2014, but not sealed until 19 December 2014. Clause 6 of that Consent Order provided as follows:

The BMI involved not only the defendant and 'the Bodo Community' (which is not a legal entity in its own right and a deleted claimant in these proceedings), but also various other stakeholders, including the Rivers State Sustainable Development Agency, the National Coalition on Gas Flaring and Oil Spills in the Niger Delta, the Embassy of the Kingdom of the Netherlands, and the United Nations Environment Programme. Nigerian Federal and State Government Institutions were also involved in the BMI, including the National Petroleum Investment Management Services, the National Oil Spill Response and Detection Agency, and the Rivers State Ministry of Environment. Each of these stakeholders agreed to operate together under the umbrella of the BMI. The BMI has its own chairman, called and continues to call regular meetings which are minuted (see further the disclosure issue mentioned below), and issues regular reports.

Pursuant to a Memorandum of Understanding ("MoU") made on 30 April 2015, the way forward under the BMI was set out in some detail. All the stakeholders identified in the previous paragraph were named in the MoU, though the agreement is one between SPDC and the Bodo Community. The MoU provided that:

Regrettably in the first two years of the process little or no progress was made in carrying out the remediation scheme envisaged in the MoU. Two main issues were identified to Coulson J in 2017.

The first was physical violence, threats, and hostility from some of those within the Bodo Community, aimed at those charged with cleaning up the pollution. It is fair to say that on the evidence before me the extent of this was in issue. However, it is indubitably the case that there was an incident in 2015 (whether properly described as a physical attack or not) which led to project sites being shut down and contractors taking the view that they had to withdraw. Certainly, too, on 26 October 2015 the claimants' solicitors, Leigh Day, wrote a letter addressed to 'the Bodo Community'. Amongst other things, they said:

The second main issue identified to Coulson J was the existence of six sets of legal proceedings, started in Nigeria in 2016 and 2017 by the claimants or those whom they purport to represent each of, in which an injunction was sought to prevent the remediation works being carried out. Those legal proceedings also delayed the cleanup process.

Other factors mentioned by Coulson J which remain live are the issues of political instability, contractor issues and the misconception as to “monetising” the clean-up. As to the first, the original first claimant, King Felix Berebon, died in 2013. His death was followed by a dispute as to the succession which itself involved legal proceedings. The succession of his son, King John Berebon, was only confirmed by the Nigerian Courts in 2016. King John Berebon was one of those who had sought an injunction preventing the carrying out of the remedial works, though that claim has now been withdrawn. However, despite the succession being confirmed it appears that there continues to be some political instability.

As to the second issue the Claimants expressed before Coulson J and continue to express concerns as to one of the contractors appointed in relation to the Phase 1 cleanup. They argue that the process by which this contractor, INKAS, was appointed was suspicious, that it made an “inexplicable and extraordinary mistake” in failing to hire a local partner company in Bodo which inevitably led to protests and that it was guilty of “persistent poor contract performance”. While these allegations are firmly in issue it appears that this perception has fuelled hostility to the process in the Bodo Community, which cannot have helped with moving the clean-up forward.

Thirdly there is the question of “monetising”. It seems to be the case that there has been a perception in the Bodo Community that an alternative to clean-up would be to distribute the funds which would otherwise be spent on clean-up to the community. Although Leigh Day have rightly advised their clients that this is not a possibility this possibility appears to linger in at least some parts of the Bodo Community and to fuel hostility to the clean-up process.

There are also other issues which have arisen in the course of work to date, such as health issues, and issues as to whether the Bodo Community is being given a great enough share of the work, for example in relation to disposal of material from the cleanup. There is also the issue of damage to the Bodo area caused by extensive illegal bunkering and refining which has no relation to the spills which gave rise to these proceedings.

However the optimism which Coulson J noted at paragraph 18 of his judgment has to some extent been justified. SPDC and the Bodo community have managed to move forward with the clean-up and remediation of the polluted sites. More specifically:

However, not all the news is good. It appears that there remain difficulties within the Bodo Community, including new leadership conflicts, and re-oiling of the environment due to illegal activities continues to be an issue.

Nor did the parties make as much progress in the run up to this hearing as had been hoped. There was correspondence between the parties’ solicitors which has led to the substitution application being uncontested. However, when it comes to the restoration application the parties agreed in principle that there should be a further stay, and also agreed in principle that it should have some form of additional conditionality attached to it. But the positions on the conditions never came close to agreement, with SPDC wishing to peg the conditions to the MoU obligations, and the Claimants advocating some form of benchmarking to progress on the ground. Thus, the restoration application remains, at least in material respects, live.

In support of and opposition to the application, considerable further evidence has been served, some of which deals in detail with the issues on the ground. Again, hundreds of thousands of pounds of costs are reported to have been incurred.

There are two substantive issues before me:

There is also the question of who should pay the costs of the application and a lurking issue as to disclosure of information to the Claimants regarding the progress of the BMI process.

This application deals with two issues: the removal of deceased claimants, and the addition of replacements for them, and further additions to ensure that a proper spread of the ruling persons within the Bodo Community are included so as to ensure that changes in the Bodo formal rulership structures do not result in issues as to the entitlement of the claimants in the litigation to act for the community.

I am satisfied that the substitutions and removals sought are sensible and appropriate. I have been referred to the requisite written consents. No issue has been taken as to the various formalities required under CPR Part 19 and SPDC does not oppose the changes.

I will therefore make the order sought. In the light of the position on the stay I am not minded to make any orders for service of an amended claim form or Particulars of

There is one further point regarding substitution. In their letter of 18 December 2017, the Claimants offered that the King and the members of the CCE, in addition to undertaking in their personal capacity to comply with Clause 5 of the MoU (granting and maintaining access to Bodo for the purposes of clean-up) would also undertake:

“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 draft Order offered by the Claimants indicates that this undertaking will be given by each of the named Claimants. That is plainly appropriate.

SPDC in its skeleton indicated that: “SPDC, in the spirit of reciprocity, has confirmed that it is willing to provide the undertaking set out in the draft order attached hereto.” However, the ambit of any undertaking actually offered is not clear from the draft order and appears to be in issue.

The Claimants argued that:

SPDC on their part contended that:

There are essentially three issues in relation to the question of a stay:

This frame of reference is not insignificant because it must be borne in mind that what I am not asked by the Defendant to do today is to refuse to restore the case, or to grant a stay. That is an option which is open to the other party when a party to a stayed action seeks to restore the action.

On the first question I was initially inclined to follow a course which did not involve restoring the case, because there has been no formal consideration of the issues relevant to a full restoration. However, I have ultimately formed the view that it is procedurally correct that a restoration, at least for a brief period, is necessary both as regards the need to make the order for substitution and to the extent that anything other than a continuation of the stay is required.

There will therefore be a technical restoration of the claim for these administrative purposes. It is not a full restoration for trial, which was not ultimately sought, and I make quite clear that I have not had to consider for these purposes the issues which would arise – as indicated in the judgment of Coulson J – upon such an application. There is no sense in which my decision on this issue should therefore be considered by any judge considering a full restoration application as tying his or her hands in any way.

Turning then to the question of the length of the stay and its terms, SPDC have focussed in their submissions on the question of the importance of finality, as a matter which goes both to the length of the stay and the imposition of conditions.

There is, of course, force in this. I entirely accept that the default stay under Part 26 is only for one month and that the practice in this court is to be relatively resistant to lengthy stays: see for example paragraph 7.2.3 of the TCC Guide and CIP Properties (AIPT Ltd) v Galliford Try Infrastructure Ltd [2014] EWHC 3546 (TCC) at [9].

However, this must be seen as a somewhat unusual case. It is not simply a large and complex case, it is a case which affects directly the lives and livelihoods of the people directly affected by a very significant oil spill. It is common ground that, while the BMI process is not formal ADR, it is in the context of this case the best and perhaps the only way of ensuring that the “clean-up” - to which both parties have made it very clear to this court that they are committed - takes place, and takes place as swiftly as possible. Further it is plain that the Court does have power under 26.4(2A) and (3) CPR to impose a stay for settlement “until such date or for such specified period as it considers appropriate”.

There is, of course, a need to bear in mind the desirableness of finality within a reasonable period for the parties, and for the Court (see such cases as Jameel v Dow Jones [2005] EWCA Civ 75, [2005] QB 946 at [54] and Jones v University of Warwick [2003] EWCA Civ 151 [2003] 1 WLR 954 at [25]). However, so far as the parties are concerned, they have indicated their desire at an earlier stage to give the remediation process, time to make progress and that this remains the case in essence was evident both in the submissions made by both parties before me and also in the Defendant’s approach adverted to above of not putting the Claimants to their election now, but endorsing the concept of a further stay.

So far as the Court is concerned this is not, as matters stand, a heavy drain on the Court’s resources and so the Court can afford in this case to give more weight to other factors.

I also bear well in mind that the Claimants originally sought only a year’s extension of the stay, taking it to October 2017, and that effectively the history of the application has ensured that this period has already been comfortably exceeded.

Ultimately what has seemed most important to me, given the “in principle” agreement of the parties to a further stay at this stage, is for the Court to provide as closely as possible the assistance which the parties sought in asking for the stay originally. Matters have moved on since then, and the reason for the delay in the timeline of progress, may yet have significance, but in essence I would want to see some good reason to depart from the scheme which the parties had in mind when seeking the original stay.

What then was that intention? On the basis of the materials before me it appears from the MoU that it was anticipated that two things would have happened before the time for making a decision as to whether to lift the stay arrived. The first was the completion of Phase 1 of the clean-up, which had been anticipated to occur by early 2016. The second was the selection of contractors for Phase 2, which appears to have been timed for early 2016 also. It is not entirely clear whether it was anticipated that Phase 2 works would have started by October 2016, but that appears not unlikely. This suggests, as seems in fact to be common ground, that the parties wanted to get remediation to a good way along the timeline to see if scope remained for this action to be needed.

The evidence before me indicates that at present it is anticipated that Phase 1 works will be completed by the start of July 2018. The definition and approval of the scope of the Phase 2 works has also been completed. It is on this basis that SPDC seeks a stay only until October 2018. However, the tender process (which, given the complaints about the last tender process, is sensibly intended to be done rigorously with “clear and unambiguous technical and commercial evaluation criteria to eliminate contractors without the requisite capacity and competence to carry out these works”) is not anticipated to be completed before October 2018; and that date is not a firm one.

I am therefore not attracted by SPDC’s submission that the stay should extend no further than October 2018. That would seem to put the Claimants in the position of having to take the decision as to restoration of the action at an earlier point in the timeline than the parties initially intended.

Nor, however, am I attracted by the Claimants’ suggestion of dates in 2020. It seems to me that SPDC are right to say that at the time of the original stay the parties understood that the clean-up process would take longer than 2 years to achieve. That is what the Claimants’ expert, Dr Gundlach, indicated clearly when he gave an estimate that 5 years would be required. To allow a stay of this length would be to allow a stay which is not in tune with the parties’ intentions and indeed strays close to the “gun in the cupboard” situation deplored by Coulson J. I also consider that based on the evidence before me even the October date is too far off.

I will therefore order that the stay be re-imposed until 1 July 2019. That gives time to evaluate the Phase 1 results, the appointment of the Phase 2 contractors, even allowing for some slippage in that process and (it is to be hoped) also allows for some progress to be made with Phase 2.

The next question is whether the stay should be made conditional. There is a degree of common ground, in that it is ultimately accepted that the Court has the jurisdiction to make any further stay conditional and also that the parties discussed and reached some agreement in principle as to the imposition of conditions, but did not agree on the nature of the conditions.

Further it seems to be the fact that, while Coulson J anticipated that any full restoration of the case would be accompanied by conditions (for example as to costs budgeting), he did not make any determinations as to the basis on which any such application as that before me should be resolved. I am not therefore in any way constrained by the parties’ agreement or any prior determination as to the question of conditions.

As to the nature of conditions, although counter-conditions were tendered for discussion by the Claimants, the only conditions "in play" are those put forward by SPDC. They are as follows:

There are, in my view, two problems with these proposed conditions. The first was the focus of the argument before me, namely whether it is appropriate to make such a limitation on a party's right of access save on the basis of the kinds of considerations adverted to by Coulson J. On this I tend to agree with the Claimants, though I do not accept their argument entirely.

I do consider that the Court, in looking at an application of this nature, has to bear in mind the authorities which make clear that a claimant generally has a right of access to the court in respect of a claim properly brought (see, for example, Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002, paragraph 9, per Dyson LJ). That principle, in my view, operates with at least as much force where the process in support of which there has been a stay is not a court sponsored or approved ADR but a mediation process such as the BMI, which provides no guarantee of an alternative remedy.

Although this was not expressly stated by Coulson J, it appears to me to be inherent in his judgment and in particular his conclusion at paragraph 53 that he proceeded on this basis.

The core of Coulson J's approach was this:

He then went on to consider the question of the approach if that application were opposed root and branch and considered (in line with the starting point I have outlined above) that the kinds of questions which apply in relation to issues of abuse of process and summary judgment/strike out are likely to provide "helpful guidelines" though he made an important (and it seems to me plainly correct) qualification, namely that:

I cannot see why this approach should not be, broadly speaking, applicable to the imposition of conditions which, if they do not amount to barring the right of action in the stayed claim, do amount to a significant limitation on the right to bring the claim.

The approach is, of course, subject to something of a sliding scale – as is appropriate given the underlying rationale set out by Coulson J at [48-49]. There may be conditions which might be suggested which do not amount to a significant limitation of a party's right of access to the Courts; such conditions might not require the consideration of abuse of process or summary judgment tests. So too might those tests be less likely to be indicative where a partial restriction rather than a full bar is in the nature of the condition proposed.

However, this is all hypothetical. In this case the condition being proposed plainly is intended to operate as a significant limitation on the Claimants’ rights to restore the litigation. This was clear from the submissions advanced, and also inherent in the tying of the need for conditions to finality.

Yet it was not argued at this hearing that the case approached one of abuse of process, or was one where the merits would justify summary judgment (though the right to make those submissions based on past facts was maintained). Essentially it was said that the need for finality, incentivisation to focus on the BMI, not the litigation and the uncontroversial aspects of past behaviour such as the existence of the six past injunction applications was effectively enough for the court to conclude that the imposition of the conditions was appropriate as being in line with the overriding objective.

I cannot accept this submission. In the context of a significant limitation on what prima facie is an unfettered right of access to the Courts I consider that considerably more than this would be required. Even if the full weight of the abuse of process/summary judgment arguments were not needed, material of some weight would be needed to tilt the scale of the overriding objective in favour of such a limitation. Despite Mr Webb QC's clear and careful exposition I am not persuaded that the issues identified come close to that weight.

The second issue, though not specifically raised as an issue, is the potential for creating yet further uncertainty and scope for dispute between the parties. They may be confident that they would be at idem on the question of whether the BMI had irretrievably broken down or whether there had been a breach of obligation of "sufficient seriousness" with appropriately causative effect. Having read the evidence presented in this application and the solicitors’ correspondence as to the attempts to agree a way forward, I cannot share any such optimism.

Imposing this condition would in my judgment almost inevitably mean adding to the issues for determination by the court on any application to restore or to strike out vibrant disputes about the actual state of the BMI, the existence and seriousness of breach, its causative effect in the context of the other events postdating this hearing, and also potentially the construction of the clause itself. This is therefore a factor which would tend to suggest that this would not be a sound decision from a case management point of view.

I have considered, given the parties' in principle agreement to conditions, whether other conditions might be composed which do not suffer from the defects identified above and in argument. I would not have been attracted by the Claimants' proposals, which also seem to have ample scope for increasing rather than decreasing the range of dispute. I have certainly found myself unable to alight on anything worth putting to the parties for discussion - and of course it is unlikely that the weighty professional teams engaged on each side would not have put forward the best and most practical conditions they could compose.

I will therefore make the stay an unconditional one. However, in doing so I do not accept that this means that the Claimants have an open door to extending the stay indefinitely. The conclusion I have reached is a conclusion based on the dispute before me – where the question of stay was effectively not in issue, and I was not (despite the service of extensive factual evidence) asked to determine the position on the facts.

It is emphatically not the case that any future application would necessarily have the same result. If on a future occasion SPDC chose to oppose the restoration for the purposes of granting an extension of the stay there are a number of possibilities. One is that, having considered all the evidence, the Court does grant a further stay. But there are two other very real possibilities. One is that the Court puts the Claimants to their election and agrees to restore the action, but only for trial (ie. refuses to grant any further stay).

The second possibility is that having considered the application on the merits no restoration will be granted. On this I would make the following points.

While I agree with the Claimants that any future hearing would enable them to rely on further evidence to contextualise the application (and the grounds for opposition) at the time made, two notes of caution should be sounded. The first is that the point which Coulson J makes about going behind contemporaneous documents at paragraph 62 is a forceful one. A court is always likely to give considerable weight to the evidence provided by the contemporaneous documents – and to Coulson J’s preliminary conclusions based on those documents.

Nor do I accept that any dispute as to issues such as abuse of process would necessarily require a full trial with live witness evidence. The Court might, depending on the nature of the dispute, be minded to follow that course; but issues of abuse of process or summary judgment and strike out are frequently (bearing in mind the tests inherent in those applications) dealt with by the courts on the basis of witness statements.

I also endorse Coulson J’s conclusion that actions which do amount to an obstruction of the BMI process are well capable of founding an abuse of process argument which could preclude an application for restoration. Such actions as have been described in the evidence - and in particular any continuation or resumption of such actions impacting the timeline going forward - could provide a valid basis for refusing to restore the action and could also impact on the question of whether any mandatory injunction or damages in lieu could ever be granted.

I note and entirely endorse what Coulson J said at [82] of the judgment:

“…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.”

Where I slightly part company with the learned judge is in relation to other factors. He said at paragraph 53 that he saw the obstruction case as the only argument which could prevent restoration. It seems to me that the further along the timeline one progresses the more acute may become the other potential issues as to the merits of the claims covered by the stay, and that an opposition based not on abuse of process grounds but on summary judgment/strike out type grounds may take on greater significance. So I see some force in the points made at paragraphs 44 and following of the skeleton of SPDC as to the gradually lessening ground on which the claim which founds the injunction and the claim for damages in lieu has to bite. This slight difference however only goes to lend further force to the passage quoted above.

I have not been addressed on the costs issue, so I leave that for further submissions.

I was addressed on the question of disclosure. What has been sought is some form of order that SPDC disclose to the Claimants and Leigh Day all minutes of BMI proceedings, including the weekly BMI management meetings. This is said to be sought to enable the Claimants to participate effectively in the ADR process and to avoid the misinformation and distrust which formed the background of the breakdown of the BMI in 2015. The issue, it appears, is that the members of the Bodo Community who attend such meetings are not formal representatives but experts retained by the BMI, and they do not consider it appropriate to disclose BMI minutes.

Rightly no formal application along these lines was pursued at this hearing. Instead the Claimants urged SPDC to give consent to BMI to make such disclosure, putting down

SPDC indicated that they had no opposition in principle to the Bodo representatives receiving updates, but put down their own marker about the need to maintain confidentiality over some aspects of the process and that a balance needs to be drawn.

I have no need therefore to make any decision, still less any order in relation to this. However, based on what I have seen and heard it seems to me that: