Jurisdiction decision from Court of Appeal on parent company liability

In the latest of a series of jurisdictional decisions, the Court of Appeal (Lady Justice Gloster, Lord Justice Sales and Lord Justice Newey)  in AAA and others v Unilever PLC and Unilever Tea Kenya Limited has decided that Unilever’s Kenyan subsidiary should not face claims in England and Wales based on injuries suffered by visitors to and on its tea plantation in Kenya (arising out of Post- Election Violence, at the hands of third parties, in 2007.)

The assertion that England and Wales was the correct forum was based on a “anchor defendant claim” of parent company liability against Unilever PLC (domiciled in England and the Netherlands.)  The Court has found that the Claimants cannot make out a duty of care, on Caparo principles, against the parent company. The Court confirms that its decision in Chandler  v Cape PLC [2012] 1 WLR 3111 does not lay down a separate test of parent company liability, distinct from general tortious principles.  The Court sets out that there are broadly two possible types of parent company duty cases. The first is where the parent has (in substance) taken over the management of the relevant activity in the subsidiary (which can be joint with the subsidiary’s management) and the second is where the parent has given relevant advice to the subsidiary about how it should manage a particular risk.

The Court found that this case fell into neither category.   Without a claim against the parent company, the claim against the Kenyan subsidiary cannot be heard in London and the intended group action, as a whole, fails.  The Claimants may seek permission to appeal to the Supreme Court.

Charles Gibson QC, Adam Heppinstall, and Ognjen Miletic , instructed by Jamie Curle and Sarah Ellington of DLA Piper, represented the Unilever defendants.

A copy of the judgment is available here.