The Supreme Court has ruled that two Nigerian communities can bring legal claims for clean-up and compensation against Royal Dutch Shell and its Nigerian subsidiary in the English courts.

In a judgment handed down today, the Supreme Court allowed the appeal of 42,500 Nigerian citizens who live in areas allegedly affected by oil spills from pipelines operated by the Shell Petroleum Development Company of Nigeria Ltd (SPDC), a subsidiary of Royal Dutch Shell. They allege the leaks have caused widespread environmental damage including serious water and ground contamination.

The appellants claimed that Royal Dutch Shell, a UK domiciled company, owed them a duty of care either because it exercised significant control over material aspects of SPDC’s operations and/or is assumed responsibility for the operations.

The Supreme Court ruled that the Court of Appeal was wrong to decide that there was no real issue to be tried. It found that the lower court had materially erred in law by conducting a mini-trial, and wrongly appeared to accept a general principle that a parent company can never incur a duty of care in respect of the activities of a subsidiary by maintaining group-wide policies and guidelines.

The appellants were represented by Leigh Day, while Royal Dutch Shell and SPDC was represented by Debevoise & Plimpton.

Leigh Day partner Daniel Leader said: ‘This Supreme Court judgment gives real hope to the people of Ogale and Bille who have been asking Shell to clean up their oil for years. We hope that now, finally, Shell will act.

‘But it also represents a watershed moment in the accountability of multinational companies. Increasingly impoverished communities are seeking to hold powerful corporate actors to account and this judgment will significantly increase their ability to do so.’

The Nigerian communities have been fighting for five years to have their cases heard in the English courts because they maintain that there is no prospect of obtaining justice in Nigeria.