Proceedings: In May 2008, four Nigerian farmers, with support from the Dutch branch of Friends of the Earth (Milieudefensie), initiated legal action in the Dutch court against Royal Dutch Shell (RDS), headquartered in the Netherlands,1 and its Nigerian subsidiary, Shell Petroleum Development Company of Nigeria (SPDC). 

Main Claims: The case involved three separate lawsuits centred around pollution resulting from multiple oil spills between 2004 and 2007 from pipelines operated by SPDC in the Nigerian villages of Oruma, Goi, and Ikot Ada Udo. The plaintiffs sought compensation for damages caused by Shell’s alleged negligent maintenance of pipelines and wellheads, inadequate response to the spills, and insufficient cleanup efforts. They also demanded assurances that Shell would remediate the contaminated land and implement measures to prevent future spills. 

Court Decisions: The District Court considered that it has jurisdiction to hear the cases against all Shell companies in The Netherlands (in interlocutory judgments in 2009 and 2010) since these cases are intertwined.  

On January 30, 2013, the District Court of The Hague dismissed two of the cases concerning Oruma and Goi. However, regarding the case involving Ikot Ada Udo, the court found SPDC negligent and ordered compensation for the plaintiff. All decisions dismissed the claims against RDS.  

On December 18, 2015, the Court of Appeal issued an interim judgment, asserting jurisdiction of the Dutch court over claims against both the parent company RDS and its Nigerian subsidiary SPDC. The Court of Appeal determined that a parent company could be liable for negligence resulting in harm caused by its subsidiary under specific circumstances. The interconnected nature of the claims against RDS and SPDC justified their joint consideration under the Dutch Code of Civil Procedure. The Court also ordered Shell to allow access to documents that may provide more clarity about the cause of the leaks and the awareness of the group’s top holding company.2  

On January 29, 2021, the Dutch Court of Appeal overturned the 2013 District Court decision regarding Oruma and Goi. It held SPDC liable under Nigerian law for the spill damages, while finding that RDS had violated its duty of care to the affected villagers by failing to install Leak Detection Systems in the pipelines. However, the court rejected claims of inadequate cleanup efforts by Shell. The Court ordered Shell to pay damages to the claimants. 

As for the case involving Ikot Ada Udo, it remained unresolved, with the court issuing an interim decision attributing the spills to sabotage and ordering further investigation into the question of whether the contamination still needs to be cleaned up and to what extent the contamination has spread.  

The Court of Appeal’s decision on Oruma and Goi marked a significant legal precedent, establishing that a parent company could bear liability for actions of its foreign subsidiaries, owing a duty of care to affected local communities. 

In December 2022, the parties reached a settlement agreement, wherein Shell agreed to pay €15 million in compensation for the damages caused by the oil spills. 

Supply chain chart: 

Parent company: Royal Dutch Shell (RDS) 

Nigerian Subsidiary:  Shell Petroleum Development Company of Nigeria (SPDC)