[co-author: Ollie Bradgate]
The English Court of Appeal has ruled that the English courts have jurisdiction to hear a claim brought by a group of migrant workers against three companies in the Dyson group alleging trafficking and abuses of their labour and human rights. The issue before the Court of Appeal was whether England or Malaysia was the appropriate forum for the claims to be determined – a forum non conveniens challenge. The decision will be of particular interest to companies domiciled in the UK with international supply chains as the court gave considerable weight to the fact that Dyson UK was being sued in its place of domicile and that most of the relevant decision-making took place in England.
Background
The claim was brought by a group of Nepalese and Bangladeshi migrant workers against two Dyson entities in the UK (collectively, Dyson UK), and one Dyson subsidiary in Malaysia (Dyson Malaysia). The claimants were employed at a factory of Dyson Malaysia’s third-party supplier, and allege that they were subjected to forced labour, exploitative and abusive working and living conditions at a supplier’s factory in Malaysia; some claimants further allege they suffered detention, torture and beating. The claimants argue that the defendants exerted a high degree of control over the operations and conditions of the supplier’s facility in Malaysia, and that Dyson UK in particular had promulgated and implemented mandatory policies and standards regarding the living and working conditions of workers in the Dyson group’s supply chain. The claimants allege that these factors gave rise to a duty of care in tort owed to the claimants (relying on Lungowe v Vedanta and Okpabi v Shell) which was breached due to defects in those policies and standards and a failure to take steps to ensure that they were implemented and enforced. The claimants also allege that the defendants are jointly liable with the supplier for false imprisonment, intimidation and assault, and also seek restitution for unjust enrichment said to arise by the saving of expenditure on products which, but for the alleged abuse, would have cost more.
First instance decision: Malaysia is the proper forum
The defendants challenged the jurisdiction of the English courts to hear the claim, arguing that Malaysia is the proper place for the claim. In determining which forum is more appropriate, the English courts look at the factors that connect the claim to each jurisdiction, and where it concludes a foreign court is more appropriate, it must then consider whether there is a real risk the claimants will not be able to obtain substantial justice in that jurisdiction. The Judge found that Malaysia was the appropriate forum on the basis that it was the “centre of gravity” of the case, as Malaysia was where the underlying treatment and alleged abuse took place.
The Court of Appeal: England is the proper forum
The claimants appealed on several grounds.
The Court of Appeal accepted the claimants’ arguments and confirmed that the claim can proceed in the English courts. The court identified several factors that the first instance judge had failed to adequately consider, which pointed towards England as the proper forum for the claim. These factors included the following:
- Dyson UK is domiciled in England, which was the basis for establishing the court’s jurisdiction and implied a degree of permanence and allegiance to the country’s institutions such that the company can be expected to meet claims against it in the courts of this country.
- The primary case was against Dyson UK: this was where the promulgation of Dyson group policies and the alleged failures in implementing these policies would have taken place, and where any unjust enrichment of Dyson UK would have taken effect. These factors made Dyson UK the “principal protagonist”, whereas Dyson Malaysia was an ancillary defendant which was only added to the claim as the entity responsible for implementing the Dyson group’s policies.
- The defendants’ defence would be conducted and coordinated from England. Most of the documents and witnesses were in England, and both parties would be able to attend the trial in person more easily in England.
- While the High Court’s reasoning had centred on Malaysia as the location of the underlying abusive treatment, the Court of Appeal noted that the abuse itself might not even be substantially in dispute; rather, the proceedings were likely to focus on Dyson UK’s role.
- Finally, the points of dispute on Malaysian law were fairly narrow and it was held that the English Courts were equipped to deal with them given how closely Malaysian and English law are related.
As regards access to justice, the Court of Appeal disagreed with the High Court and said there was a real risk that the claimants would struggle to fund a claim in Malaysia, noting various flaws in the undertakings that Dyson UK had provided to try and address this point.
Comment
The Court of Appeal’s judgment will likely make it easier to bring supply chain cases in the English courts where the alleged wrongdoing has taken place abroad. This is particularly the case where the “anchor” defendants are domiciled in England and the focus of the claim is on management decision making by those English entities, such as with group supply chain and human rights policies.
At this point there is still no authority under English law that a company can owe a duty of care in tort for the acts or omissions of one of its suppliers, or on the question of whether an unjust enrichment claim can be made against such a company based on cost savings arising from such unlawful acts by its suppliers. If this case proceeds to trial, it could determine these important points of principle.
Judgment: Dhan Kumar Limbu & Ors v Dyson Technology Limited & Ors [2024] EWCA Civ 1564
