Interpretations of the UKSC decision Okpabi v Royal Dutch, which heightened the risk of lawsuits for Canadian companies with overseas subsidiaries

The decision of the UK Supreme Court in Okpabi and others v Royal Dutch Shell Plc and another[1](“Okpabi”) found that a UK parent company arguably owed a duty of care to Nigerian claimants relating to the actions of its Nigerian subsidiary. UK courts have since interpreted Okpabi as authority for the proposition that determining whether a claim can be brought against a claimant outside the UK is a fact specific exercise.

In Shah v L3 Commercial Training Solutions Ltd[2] (“Shaw”), the court cited Okpabi in deciding that a UK company could potentially be liable for a foreign company that it controlled. In this case, an action was brought against an English company in relation to a death that had occurred at a Portuguese flight school. The English company controlled the flight school, and initially accepted that it was the flight school’s parent company. It then changed its evidence regarding the corporate structure of the two companies and stated that it was not the parent company of the Portuguese flight school and sought to have the action summarily dismissed, citing Okpabi in its argument that it could not be liable for the actions of the Portuguese company if it was not its parent company.

The court found that this was an overly narrow reading of Okpabi, and that although “Okpabi was considering the issue in the context of parent/subsidiary relationship rather than any other situation… the determination of whether there is control and whether it was, in fact, used will be fact specific.”[3] The court found that the control that the English company held over the Portuguese flight school gave rise to an arguable cause of action.

Other decisions interpreting Okpabi follow that whether a party outside the jurisdiction can be served with a claim in the UK is fact specific. The court must consider the particulars of the claim to determine whether there is a triable issue and a real prospect of success.[4] For example, in VTB Commodities Trading DAC v JSC Antipinsky Refinery[5] the court relied on Okpabi for the proposition that when determining whether it is appropriate to serve a claimant outside of the jurisdiction, “the Court has to form a view and try to be far sighted about the likely future course of the various claims, and in doing so at this stage it must be guided by the pleaded case.”[6] Other decisions have cited Okapbi as authority for the idea that mini trials should be avoided when determining whether there is a triable issue against a party outside of the jurisdiction.[7]

Okpabi seems to suggest that a claim can be brought against a UK company relating to actions of overseas subsidiaries or affiliates that it controls, even where a controlling company is not the parent company of its overseas subsidiary. Insurers need to be mindful of the potential for an increased number of claims arising from the actions of Canadian (and other) companies’ foreign counterparts and make enquiries regarding such potential relationships when assessing risk.

[1] Okpabi & Others v Royal Dutch Shell Plc & Another [2021] UKSC 3

[2] Shah v L3 Commercial Training Solutions Ltd 2021 WL04895900

[3] Ibid at para .

[4] ID v LU 2021 WL 03022722; FS Cairo (Nile Plaza) LLC v Lady Brownline 2021 UKSC 45.

[5] VTB Commodities Trading DAC v JSC Antipinsky Refinery 2021 WL03409562.

[6] Ibid at para .

[7] Fogla v Family Officer Ltd 2021 WL 01081589;