Worldwide: Vedanta Resources PLC v Lungowe, [2019] UKSC 20

Last Updated: August 14 2019
Article by Nicholas Baker

Removing straitjackets, and widening the potential scope of parent company liability for a subsidiary's actions

Can the parent company of a multinational group owe a duty of care to a third party for the actions of a foreign operating subsidiary? There remains no definitive answer at the time of writing. However, the UK Supreme Court ("UKSC") recently found that, in certain circumstances, it would be reasonable for UK courts to determine the question at trial.

This post concerns the UKSC's recent decision in Vedanta Resources PLC v Lungowe,1 a group action under Part 19 of the UK's Civil Procedure Rules.2 The decision ends a long jurisdictional challenge to the pursuit of a transnational tort claim in the UK. It matters in Canada because, at the time of writing, at least two transnational tort claims are before our courts too.3 While the decision in Vedanta is not binding in Canada, UK precedents, particularly decisions of the UK Supreme Court, continue to be well received and respected.4

The group members are Zambians living in rural farming communities in Zambia. Vedanta is a UK corporation, and is the publicly traded parent of a multinational group. Through the group, Vedanta has interests in mineral and hydrocarbon production in four continents.5 In Zambia, Vedanta has an interest in the Nchanga Copper Mine ("Nchanga").

The Nchanga interest is held through Vedanta's operating subsidiary, Konkola Copper Mines plc ("KCM"). KCM is not a 100% subsidiary of Vedanta. The Zambian government has a significant minority interest in it. Notwithstanding, Vedanta has published disclosure documents effectively stating that Vedanta's ultimate control of KCM is not to be regarded as any less than complete.6

The group sued Vedanta and KCM in 2015. They allege damage to their health and farming activities caused by repeated toxic discharges from Nchanga into the watercourses the group members use for drinking and irrigation. The claims against Vedanta and KCM include a claim in negligence. The essence of the group's claim against Vedanta is that "it exercised a sufficiently high level of supervision and control of the activities [at Nchanga], with sufficient knowledge of the propensity of those activities to cause toxic escapes into surrounding watercourses, as to incur a duty of care to the group".7

To sue KCM in England, the plaintiffs were required to show a triable issue against Vedanta. Under the UK's Civil Procedure Rules, if there was a triable issue, Vedanta could be treated as an "anchor defendant", and a claim could be included against KCM as a necessary or proper party.8

KCM and Vedanta brought applications challenging the jurisdiction of the UK courts to hear the claims. Vedanta argued that, on the group's pleading and evidence, there was no triable issue, because it could not be shown Vedanta had done enough to give rise to a common law duty of care. It also argued that a finding that Vedanta had incurred a duty of care to the group would involve a novel and controversial extension of the boundaries of the tort of negligence, rather than an incremental extension by analogy with established categories. In 2016, the Queens Bench Technology and Construction Court ("TCC") dismissed Vedanta's and KCM's challenges.9 They appealed. In 2017, the UK Court of Appeal upheld the entirety of the TCC's order dismissing the jurisdictional challenges.10

The UKSC Vedanta decision appears to be the first, unanimous decision from a superior court of the Commonwealth to squarely consider the possibility of direct parent company liability to third parties affected by the activities of a foreign operating subsidiary.11 The decision confirms that the general principles that determine whether A owes a duty of care to C in respect of harmful activities of B are not novel, and date back to the decision of the House of Lords in Dorset Yacht Co Ltd v Home Office [1970] AC 1004.12 Dorset Yacht was a case about the negligent supervision of prisoners, and its general principles have been endorsed and applied by Canadian courts in other contexts.13

Of note, the Court provided the following guidance:

  • A parent company will only be found to be subject to a duty of care in relation to an activity of its subsidiary if ordinary, general principles of tort law regarding the imposition of a duty of care on the part of the parent in favour of a claimant are satisfied in the case;14
  • Direct or indirect ownership by one company of all or a majority of the shares of another company (the irreducible essence of the parent/subsidiary relationship) may enable the parent to take control of the management of the operations of the subsidiary, but it does not impose any duty on the parent to do so. Everything depends on the extent to which, and the way in which, the parent took over, intervened in, controlled, supervised or advised the management of the relevant operations of the subsidiary;15
  • Courts should not try to create any specific categories or situations where a parent company might incur a duty of care to third parties harmed by the activities of the subsidiary. 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, in management terms, carry on as if the group were a single commercial undertaking, with boundaries of legal personality and ownership within the group being irrelevant, until the onset of insolvency.16 ; and
  • Even where group-wide policies do not of themselves give rise to a duty of care to third parties, they may do so if the parent does not merely proclaim them, but takes active steps, by training, supervision and enforcement, to see that they are implemented by relevant subsidiaries. Similarly, the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as, or asserts its own assumption of responsibility for, exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances, omission may constitute an abdication of a responsibility which it has publicly undertaken.17


1 [2019] UKSC 20 (10 April 2019) ("Vedanta UKSC").

2 Online at: .

3 Choc v Hudbay Minerals Inc., and Araya v Nevsun Resources Ltd.

4 See, for examples: Office of the Children's Lawyer v. Balev, [2018] 1 SCR 398, at para 46; Deloitte & Touche v. Livent Inc. (Receiver of), [2017] 2 SCR 855, at paras 104 and 136;

5 Vedanta UKSC, note i, at paras 1-2.

6 Vedanta UKSC, note i, at paras 1-2.

7 Vedanta UKSC, note i, at para 55.

8 The 'necessary or proper party' gateway of the UK Civil Procedure Rules is in Part 6, Practice Direction 6B, para 3.1.

9 Lungowe & Ors v Vedanta Resources Plc & Anor [2016] EWHC 975 (TCC) (27 May 2016).

10 Lungowe & Ors v Vedanta Resources Plc & Anor [2017] EWCA Civ 1528 (CA) (13 October 2017).

11 New Zealand recently came close in James Hardie Industries Plc v White. The issue was when a parent company may be liable for defective products made, marketed and sold by a foreign subsidiary company. See [2018] NZCA 580 [13 December 2018], leave to appeal to the Supreme Court of New Zealand was dismissed, see [2019] NZSC 39 [16 April 2019].

12 Vedanta UKSC, note i, at para 54.

13 See, for example: Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2. In Kamloops, a contractor built a house for his father (B), who sat on the municipal council of the City of Kamloops. The contractor son failed to comply with certain foundation building requirements. When inspected by the City, a stop work order was placed on further construction of the house. Remedial plans were made by the son but not followed. He continued to build based on the old, deficient plans, and did so notwithstanding the stop work order. B purchased the house and encouraged the City to take no further action. B later sold the house to the Nielsens (C), without informing them of the stop work order for the deficiency. A year later, C found the defect and sued B and the City (A). At trial, both A and B were found liable (25:75); and see also, for example, Jane Doe v Metropolitan Toronto Commissioners of Police, [1998] 39 OR (3d) 487. In Metropolitan Toronto, a serial rapist (B) was at large and preying on women in Toronto. He intruded their homes via balconies. The police (C) did not warn women in the area of the rapist, because they thought it would cause panic in the area. Jane Doe (A) lived in the area and was raped at knifepoint by the rapist. The decision not to warn potential victims prevented them from taking reasonable precautionary measures. The court found that A established herself as part of a distinct, identifiable class at risk of attack, and C owed her a duty of care in the circumstances.

14 Vedanta UKSC, note i, at para 50, citing with approval Sales LJ in AAA v Unilever plc [2018] EWCA Civ 1532, para 36.

15 Vedanta UKSC, note i, para 49.

16 Vedanta UKSC, note i at para 51.

17 Vedanta UKSC, note i at para 53.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions