A Review of the Nigerian Energy Industry

Shell in US Supreme Court victory on Nigeria case

Shell facility17 April 2013, Houston – Multinational oil major Shell scored a major victory, Wednesday, following US Supreme Court ruling that US federal courts do not have jurisdiction to hear lawsuits against foreign corporations accused of aiding in human rights abuses abroad.

12 Nigerians had accused Shell of complicity in a violent crackdown on protesters in Nigeria from 1992 to 1995 in a case before the US federal court in New York.

But, in one of its biggest human rights cases in years, the Supreme Court justices ruled unanimously that a federal court could not hear claims by the Nigerians.

The ruling is a major win for multinational companies, especially those involved in extractive industries, that do business in the developing world and become embroiled in local political controversies.

The ruling is likely to affect other cases, including those involving similar claims against Anglo-Australian mining giant Rio Tinto over its conduct in Papua New Guinea, and against ExxonMobil over its activity in Indonesia.

Esther Kiobel, the named plaintiff in the Royal Dutch case and now a US citizen, brought her lawsuit in 2002 on behalf of victims of the crackdown in Nigeria, including her husband, Barinem, who was executed in 1995.

The Alien Tort Statute, a 1789 US law, had been dormant for nearly two centuries before lawyers began using it in the 1980s to bring international human rights cases in US courts.

Chief Justice John Roberts wrote in the majority opinion that a presumption against extraterritorial application of federal laws applies to the Alien Tort Statute.

The court did not decide the question originally before it in the case: whether corporations can ever be liable under the statute.
Although all nine justices agreed with the outcome, only four agreed with the chief justice’s reasoning. Justice Stephen Breyer wrote a separate opinion in which he was joined by three other justices.

Roberts wrote that “nothing in the text of the statute suggests that Congress intended causes of action recognized under it to have extraterritorial reach.”

He also said the ruling leaves open some lawsuits under the Alien Tort Statute, including against corporations, as long as there is a sufficient connection with the United States. The claims must have “sufficient force to displace the presumption” against extraterritorial application, he added.

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