As explained in our previous article (Dyson Group wins jurisdictional battle in the English court over migrant worker ESG claims: what next for supply chain liability?), in October 2023, the High Court refused jurisdiction for 23 migrant workers’ claims against Dyson. The High Court determined that Malaysia was “clearly and distinctly” the more appropriate forum for the claims and there was no real risk that the claimants could not obtain “substantial justice” in Malaysia.

In what will be seen as another significant blow to UK-domiciled corporate defendants with overseas operations, the Court of Appeal has decisively overturned the first instance decision confirming that the allegations of forced labour and dangerous working conditions at Malaysian factories producing parts and components for Dyson products can be heard in England.

The Court of Appeal’s decision follows the recent trend of the English Court allowing claims against UK companies concerning their overseas operations and supply chains to be heard here, instead of in local courts. Another recent example is the Mariana case, discussed here (English courts are up to the challenge: Court of Appeal allows the Fundão Dam mass claim to proceed) which is currently in trial in the Technology and Construction Court. The Court of Appeal’s decision is significant in reaffirming this trend, and also clarifying that undertakings provided by corporate defendants to fund some of the claimants’ costs in the local proceedings can amount to a conflict of interest. The existence of the undertakings appeared to be a decisive factor for the judge at first instance in reaching his conclusion that there was no real risk that the claimants would not obtain substantial justice in Malaysia. The decision also reiterates that proper consideration must be given to the availability of funding and access to legal representation in the local forum.

Background

This case concerns Nepalese and Bangladeshi migrant workers who brought negligence and unjust enrichment claims against three companies in the Dyson group (two UK domiciled companies and one Malaysian), alleging that they were subjected to unlawful forced labour whilst working at two factories manufacturing components and parts for Dyson’s products in Malaysia.

The appeal did not concern whether these claims were made out (it was accepted that they have a real prospect of success), but rather, whether England or Malaysia was the appropriate forum in which the claims can and/or should be determined. The applicable principles were those established in the decision of Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460.

Decision

The Court of Appeal found that the first instance Judge made several errors of principle, including failing to consider that the two “principal protagonists” (the Dyson UK-domiciled defendants) were domiciled in England and therefore, “can reasonably expect, and be expected, to meet claims against it in such Courts” (paragraphs [34]-[36]).

In view of several errors of principle made at first instance, the Court of Appeal determined that it could and should exercise its own evaluation of the Spiliada factors. A brief overview of the Court’s findings is set out below:

1. Funding: The claimants could not afford to make any financial contribution to the pursuit of a claim in Malaysia and it was unreasonable to expect that NGOs could meet those funding gaps. Further, the undertakings provided by the defendants (by which they agreed to pay for some of the claimants’ disbursements) were unprecedented and involved a conflict of interest for several reasons. These included that Dyson would be entitled to object if any request was outside the scope of the undertakings on their proper construction (paragraphs [49] – [58], [66] – [67]);
2. The domicile of the parties: England is the domicile of the two “principal protagonists”, the Dyson UK defendants, with Dyson Malaysia a more minor and ancillary defendant (paragraph [36], [65]);
3. Practical convenience:
   • The key documentation relating to whether the defendants are responsible for the alleged abuse in the supply chain will predominantly be located at Dyson UK (paragraph [66]);
   • Given the primacy of the claim against Dyson UK, the balance of convenience for the witnesses favours England. As to attendance of the parties, the balance again favours England for several reasons including that the claimants can attend in person (paragraphs [67]-[68]);
4. Coordination and conduct of the litigation in London: The litigation will be coordinated and conducted by Dyson UK on behalf of all the defendants, including Dyson Malaysia, wherever it takes place. This is a further connecting factor with England (paragraphs [47], [69]);
5. Connection with the issues in the case: At the heart of the allegations of breach for both the negligence and other tort claims were alleged failures by Dyson’s management in England. Specifically, the failure of Dyson’s UK management to take steps to check that the relevant policies were implemented in Malaysia, and their failure to adequately respond to what was or ought to have been known about the working conditions in Malaysia. Further, the alleged unjust enrichment ultimately took effect in England at the Dyson group’s centre of trading, and the proprietary remedies claimed are of property rights over profits and products located in England. Although there are other features which are more closely connected to Malaysia such as the alleged suffering of loss and damage, noting the location of the issues is mixed, they point more towards England than Malaysia, or are at most neutral (paragraph [38]-[40], [70]);
6. Governing Law: Malaysian law is the governing law for all the claims. However, the claims are common law and equitable claims, for which Malaysian law draws heavily on English decisions as well as other Commonwealth authorities. Therefore, these are issues which the English Court is well equipped to deal with as a matter of expert evidence and based on its own experience (paragraphs [71]-[72]);
7. Multiplicity of proceedings and risk of inconsistent judgments: There was only a slight risk, of not very great weight, of multiplicity of proceedings and risk of inconsistent judgments (paragraph [73]);
8. Equality of arms: In terms of the standard of legal representation and the ability of the claimants to attend and give evidence in person, the equality of arms favours England (paragraphs [59], [60], [75]).

Following its assessment of the connecting factors, and because of the inability of the claimants to fund proceedings in Malaysia, the Court of Appeal determined that England was clearly and distinctly the appropriate forum in which the case should be tried.

Conclusion

To date, there has been no ruling on liability from the English Court in these mass tort claims. While it is important not to overinterpret this judgment on jurisdiction, recognising that the Court has merely determined there is more than a fanciful argument to be heard against the Dyson defendants, the claimants’ success in clearing this important jurisdictional hurdle will be welcomed by prospective litigants. The progress of the case will be watched closely by many.

Limbu & Ors v Dyson Technology Ltd & Ors [2024] EWCA Civ 1564

If you would like to discuss the contents of this article further, please contact Anna Brownrigg or Georgina Coote.