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The English High Court has found BHP Group (UK) Limited (the English parent company of global mining group BHP)1 and other group entities ("BHP") liable for the collapse of the Fundão Dam in Minas Gerais, Brazil.2 The dam was owned and operated by Samarco Mineração SA ("Samarco"), a joint venture vehicle jointly owned by Vale S.A. and BHP Brasil (of which BHP was the ultimate owner). Yet it was the parent company – BHP – that was sued in the English courts and which has been found liable.
The decision is a reminder that English domiciled parent companies can be used as 'anchor defendants' to seize the jurisdiction of the English Courts in respect of the activities of an overseas subsidiary.3 It highlights that, even though the "corporate veil" remains intact, controlling, funding and benefiting from the activities of foreign subsidiaries from a central HQ can lead to the parent company being liable.
What Was the Dispute About?
The dispute arose from the collapse of the Fundão Dam in November 2015, which caused extensive environmental and socio-economic damages. The collapse of the dam has been widely described as Brazil's most significant environmental disaster. A group action was commenced in the English Courts by over 600,000 claimants, asserting that BHP had breached various provision of Brazilian law.
What Did the Court Decide?
BHP was found to be strictly liable as a "polluter" under the Brazilian Environmental Law. Key to this conclusion was the Court's finding that BHP was directly and/or indirectly responsible for the polluting activity of Samarco (the "activity" in this case being the mining and the storage of iron ore tailings (a waste product) at the Fundão Dam).
In particular, the English Court found that: (i) BHP (together with Vale S.A.) were the ultimate owners, controlling shareholders and the directing mind of Samarco;4 (ii) BHP was involved in the activities of Samarco at every level, from strategic decisions and dividend shares to detailed operational matters;5 (iii) BHP assumed responsibility for risk assessment, control, mitigation and management within the BHP Group and specifically within Samarco, including carrying out financial and technical audits of Saramco's operations;6 and (iv) BHP was substantially invested in Saramco from which it derived financial and commercial benefit.7
In addition, BHP was found to be liable under the Brazilian Civil Code for breach of a legal duty to avoid harm caused by any act or omission that was negligent, imprudent or lacking in skill.8 The Court reached its decision having assessed what BHP knew, or should have known, concerning the operation of the dam. It considered relevant the fact that BHP had allowed the continuation of certain activities at the dam and had failed to carry out certain actions recommended by experienced engineers.
Key Takeaways for International Businesses Domiciled in England
The facts of this case are not unusual: an English-domiciled parent company, through a local subsidiary, entered into an overseas joint venture for the purposes of producing products (here, iron ore pellets) for the global market. Many English companies will be engaged in similar activities with similar arrangements.
Those same companies will likely exercise influence and control over the activities of their subsidiaries. Doing so is generally considered to lead to operational efficiencies and to ensure high and consistent standards across the group, which is of particular importance in respect of compliance and HSE requirements. However, this case is an example of where exercising such influence and control also presents a risk. The parent company could be exposed to liability which – viewed from an orthodox 'corporate veil' perspective – many would assume it should be shielded from.
That is not to say that international business should discard its centralised approach. International businesses must weigh the economic, regulatory, reputational and compliance benefits of having influence and control over their subsidiaries with the potential risks of not doing so. Many will perceive having proper and effective centralised operations, functions and policies as the best means to minimise the risk of a subsidiary finding itself in a situation where claims such as these could arise. Where that is the case, the benefits to be had from the parent company monitoring and directing the activities of the overseas subsidiary will almost certainly outweigh the risk of the parent company ultimately being found liable for its subsidiaries' failings.
The fact that an English parent company exercises influence or control over its foreign subsidiaries may not, on its own, be a sufficient basis on which to seize the jurisdiction of the English Courts. The recent cases suggest that something more may be required. In overturning a refusal of permission to appeal an earlier strike out application made by BHP, the Court of Appeal noted the "exceptional importance" of this case.9 Similarly, the Supreme Court in Vedanta Resources Plc10noted that the claimants would not be able to obtain substantial justice in the appropriate foreign courts (in that case, Zambia), which was a key factor in granting permission for the claim to proceed in England. Claims bought on this basis are unlikely to be straightforward.
What makes this case particularly striking is that it is the first decision of this scale to hold an English parent company liable for acts and/or omissions of an overseas subsidiary. A similar group action against Shell Plc is also set for a full liability trial in the English Court in 2027. 11 That case involves approximately 14,000 individual Claimants and will be determined pursuant to Nigerian law.
BHP has signalled its intention to appeal the decision.
Footnotes
1. Listed at the relevant time in the UK. As of 2022, all shares in BHP Group (UK) Limited were acquired by BHP Australia.
2. Município de Mariana (and others) v BHP Group (UK) Limited and Another [2025] EWHC 3001 (TCC)
3. Dropping Anchor: Parent company liability and the English Courts, Bracewell LLP, May 20, 2019.
4. Município de Mariana (and others) v BHP Group (UK) Limited and Another [2025] EWHC 3001 (TCC) at [524]
5. Ibid at [526]
6. Ibid at [527]
7. Ibid at [530]
8. Ibid at [801]
9. [2021] EWCA Civ 1156 at [106]
10. Vedanta Resources Plc v Lungowe [2019] UKSC 20
11. Alame v Shell Plc [2025] EWHC 1539 (KB)
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