The Bodo Community & Ors v Shell Petroleum Development Company of Nigeria Ltd

Factual and Procedural Background

The judgment concerns eight preliminary issues determined on 20 June 2014 related to claims for compensation arising from oil spills under the Oil Pipelines Act 1990 ("OPA 1990"). The issues addressed the scope of compensation claims, liability under specific statutory provisions, recoverability of various heads of loss, assessment methods for compensation, jurisdictional questions, and entitlement to interest on awards. The parties disputed the extent to which each won or lost on these issues, focusing on the appropriate costs order following the preliminary issues exercise. Reference is made to the detailed judgment reported at [2014] EWHC 1973 (TCC).

Legal Issues Presented

1. Whether the Claimants are only entitled to claim compensation in respect of the 2008 spills under the OPA 1990.
2. Whether the Defendant can be liable under Section 11(5)(b) of the OPA 1990 for damage caused by oil released due to illegal bunkering and/or illegal refining.
3. Whether compensation for shock, fear, annoyance, inconvenience, discomfort, illness, distress, anxiety, aggravated damages, and exemplary damages is recoverable under the OPA by individual claimants.
4. Whether just compensation under the OPA should be assessed by diminution in value of land/interests or loss of amenity and consequential loss, or by an alternative measure.
5. Whether awards of just compensation or general damages should be valued by reference to previous English court awards or by reference to land value and cost of living in Nigeria.
6. Whether the Court lacks jurisdiction to try some or all claims on behalf of the community and individuals under the OPA and common law claims by reason of Section 30 of the Civil Jurisdiction and Judgments Act 1982.
7. Whether pecuniary and non-pecuniary damage alleged are recoverable in claims for damages in public nuisance.
8. Whether interest is recoverable on awards of just compensation and/or damages at common law for past losses.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analyzed each preliminary issue and the parties' relative success. It found that the Defendant substantially won on Issues 1, 3, 4, 5, and 7, with Issue 2 being effectively a draw and Issue 6 deferred for later consideration due to jurisdictional complexities. On Issue 1, the court held that the OPA 1990 provides an exclusive remedy superseding common law, rejecting the Claimants' argument about the Interpretation Act as conclusive. On Issue 2, the court held liability did not extend to damage caused by illegal refining but acknowledged a theoretical possibility of liability for neglect in protection against illegal bunkering. Issue 6 was deferred as it was inappropriate to decide jurisdiction at the preliminary stage. Issue 8 concerning interest was largely resolved by agreement, with only minor residual points. The court considered established authority cautioning against issue-based costs orders due to their complexity and expense, favoring a proportionate costs order reflecting overall success.

Holding and Implications

The court's final decision was to make a proportionate costs order rather than an issue-based order. Specifically, 10% of the preliminary issues costs were to be costs in the case, with the Claimants paying 75% of the Defendant's costs (amounting to 67.5% of overall costs) and all of their own costs. This reflected the Defendant's overall success on the majority of issues, the draw on some, and the deferral of others.

The decision avoids the practical difficulties and added expense of issue-based costs assessments, thus promoting efficiency in litigation. No new legal precedent was established beyond the application of existing principles concerning costs orders.