Clifford Chance

The Court found that England, not Malaysia, was the appropriate forum for claims brought by migrant workers in relation to alleged abuses occurring in Malaysia.

On 13 December 2024, the Court of Appeal (CoA) overturned the first instance decision in Kumar Limbu & Others v Dyson Technology Limited & Others [2024] to determine that England was "clearly and distinctly more appropriate" for claims relating to allegations of forced labour arising in factories manufacturing components for the Dyson group.

The decision clarified key points of principle in relation to the application of forum non conveniens arguments – including that when considering the "centre of gravity" of a case, the English courts must give thought as to the location of conduct or events relevant to duty, breach, harm and remedy rather than simply the location of the alleged underlying abuse.

The decision also emphasised that where there is significant inequality of arms between the parties, the giving of undertakings by the defendant to meet the claimant's costs in relation to disbursements necessary to conduct the claims in the claimant's home jurisdiction may not in practice answer concerns in relation to claimant's ability to pursue their claims in that jurisdiction.

The case will now be remitted to the High Court to proceed to trial on the merits.

Background

The case relates to claims brought by 24 Nepalese and Bangladeshi migrant workers (the Claimants) against three companies in the Dyson group, two of which are English companies (together, Dyson UK) and one of which is a company incorporated and domiciled in Malaysia (Dyson Malaysia) (together, the Defendants). While the corporate office of the Dyson group is in Singapore, the Dyson UK office remains the "primary operational control centre" with a significant employee work-force, including most of the group's senior management team relevant to the claims.

The Claimants allege that they were trafficked to Malaysia, where they were subjected to forced labour (including debt bondage) and exploitative and abusive living and working conditions while manufacturing components and parts in the supply chain for the Dyson group at two factories operated by Malaysian-domiciled suppliers, with which Dyson Malaysia had contracted for the manufacture of Dyson components. The Claimants are impoverished and speak little or no English or Malay; factors which were important to the CoA's determination of the jurisdiction arguments.

The Claimants allege that Defendants are liable for negligence, arguing that they owed the Claimants a duty of care on the basis that they had exerted a high degree of control over operations and working conditions at the factories, and promulgated various mandatory policies regarding worker conditions. In the cases of Vedanta and Okpabi, the Supreme Court established that a parent company may in certain circumstances be held liable in negligence in relation to the operations of a subsidiary. Additionally, the Claimants allege that the Defendants, along with the Malaysian suppliers, are jointly liable for the commission of the torts of false imprisonment, intimidation, assault and battery and are also pursuing a restitutionary claim for unjust enrichment.

Dyson UK was served in England as of right and sought a stay of proceedings, while Dyson Malaysia was served out of jurisdiction and so sought to set aside the grant of permission to serve out of the jurisdiction. Both applications by the Defendants were made on grounds of forum non conveniens (i.e. on the basis that England was not the proper place to bring the claim).

The Spiliada Test

In determining the appropriate forum for proceedings, the English courts must apply a two-stage test set out in 1987 by Lord Goff in Spiliada:

• At the first stage, the court must establish the forum with “the most real and substantial connection” to the claim;
• At the second stage, the court must decide if there is a real risk that the claimant(s) will not be able to obtain substantial justice in the foreign jurisdiction (in which case, the court will retain jurisdiction over the claim).

In "service in" cases (i.e. in respect of Dyson UK) the burden of proof rests on the Defendant at the first stage to argue that England is not the natural or appropriate forum and that there is another available forum which is clearly and distinctly more appropriate; this burden shifts to the Claimant at the second stage. The process is the opposite for "service out" cases (i.e. in respect of Dyson Malaysia) where the burden of proof falls on the Claimant at the first stage to show that England is the proper place in which to bring the claim.

In considering the first stage, the High Court had found that Malaysia, rather than England, was the more appropriate forum for the claim to be heard on the basis that the "centre of gravity” in the case was in Malaysia. At stage two, the High Court found that there were no real obstacles to the Claimants accessing justice in Malaysia. The Claimants appealed the High Court's decisions in respect of both stages.

Summary of CoA Decision

The CoA considered that the Judge had made a number of errors of principle in relation to both stages of the Spiliada test, such the CoA could and should make its own evaluation of the Spiliada factors.

Assessment of Stage 1 of Spiliada

Domicile of the Defendants

The CoA agreed that in a "mixed case" such as the present (i.e. where one or more of the Defendants is served in the jurisdiction; and the other served out), the Judge had taken the correct approach, which was to look holistically and in the round at the question of appropriate forum.

However, the CoA considered that in actually determining the question, the High Court failed to take account of several important factors which pointed to England being the more appropriate forum for the claim. Importantly, the High Court had failed to consider the “important connecting feature” that two defendants are domiciled in the UK which was significant because the domicile implied a degree of “allegiance to the country’s institutions, including its courts” (i.e. that the party can reasonably expect, and be expected, to meet claims against it in such courts in the absence of sufficient countervailing factors). The claim against Dyson UK was the primary claim, while Dyson Malaysia was a minor and ancillary defendant, and therefore the domicile of Dyson Malaysia did not provide equal and opposite weight to that of Dyson UK's domicile in England.

Centre of Gravity

The High Court had concluded that the “centre of gravity” in the case (which was used as an analogy to address various links between the issues in the case and England or Malaysia) was firmly in Malaysia, on the sole basis that that was the location in which the alleged harm forming the subject of the claim took place.

The CoA found that the High Court had erred by failing to take into account a number of additional factors relevant to duty, breach, harm and remedy; including that the promulgation of the policies took place in England and that the allegations that Dyson UK failed to oversee the proper implementation of those policies was said to be failures of management located in England. All these factors pointed to the centre of gravity being England, not Malaysia.

Risk of Irreconcilable Findings

The High Court had found that there was a real risk of irreconcilable findings between the present case and defamation proceedings that had been brought by Dyson UK in the English High Court in relation to the allegations of forced labour (even if the current case were to proceed in England) on the basis that it was most unlikely that the High Court would case manage the proceedings to avoid or reduce the risk of such a possibility.

The CoA disagreed, noting that group litigation in England has now advanced to the point where it has extensive and flexible case management powers (including through group litigation orders), involving not only split trials and lead cases, but also separate determinations of particular issues. Likewise, defamation proceedings were also carefully case managed. As a result, the CoA considered that there would be a "substantial likelihood" that the courts could avoid duplicative proceedings or inconsistent judgments.

Co-ordination of claims

In addition, the CoA found that the High Court failed to take account of the fact that litigation would be coordinated and conducted from England, which was a significant connecting factor to that forum.

Assessment of Stage 2 of Spiliada

The CoA's assessment of the factors in Stage 2 of Spiliada ultimately found that there was an inequality of arms which favoured England as being the most appropriate forum.

Undertakings

The High Court had found that there was no real risk the Claimants and NGOs would be unable to fund the disbursements necessary to pursue their case in Malaysia, in large part because the Defendants had provided undertakings to the Claimants to meet disbursements necessary to conduct the claims in Malaysia.

The CoA considered that this approach had a number of flaws: among other things, the contractual mechanism under the undertaking gave rise to a clear conflict of interest Dyson because it would be in a position to refuse to agree to pay disbursements it deemed unreasonable or unnecessary and this would likely require the Claimants to waive legal professional privilege to meet any such challenge, which the CoA believed would be grossly unfair.

The CoA further held that confining the undertakings to the disbursements did not take account of additional, inevitable contingencies, particularly given that they were restricted to disbursements particularised in the present claims only. As a result, those undertakings would not cover further amendments to the case, including the amendments of any particulars and the emergence of new Claimants.

Legal representation in Malaysia

The CoA noted that this was not a factor that would give rise to a real risk of substantial injustice, but was one to consider in the overall assessment of the appropriate forum in the context of inequality of arms.

Inability to attend trial

The Claimants argued that the High Court had not paid regard to the fact that their inability to attend a trial in person in Malaysia presented a real risk of injustice, irrespective of the possibility of remote hearings. The CoA agreed and found that there was an inequality of arms in circumstances where the claimants would need to give evidence through translators, and have translators if they were to follow the proceedings; while the Defendants could attend in person and follow the proceedings.

Risk of failure to obtain disclosure

The CoA agreed with the High Court's decision that disclosure from the Defendants was equally available and effective in Malaysia as England.

Key takeaways

The CoA's decision is important several respects, particularly for companies with global value chains. The case is the latest in a string of cases brought against UK-registered companies involving allegations of severe human rights abuses occurring in their operations or supply chains abroad.

There are three key points to bear in mind:

• First, the role of undertakings was of particular importance to the CoA's finding that the Claimants wouldn't have access to justice in Malaysia. The undertakings were considered to be deficient because, as drafted, they created a conflict of interest and were also confined to the case as currently drafted (failing to take account of additional, inevitable amendments and other contingencies). This does not rule out a court being persuaded in future cases that concerns about access to justice are met by a defendant's undertakings if the undertakings are drafted so as to avoid the issues with the undertakings given by Dyson identified by the CoA.
• Second, the CoA found that where there are multiple defendants to a case, it will consider which is the "principal protagonist" when considering the domicile of the parties. In the present case, the primary claim was brought against Dyson UK (i.e. the two English companies) while Dyson Malaysia was "a more minor and ancillary defendant". This is an important point to bear in mind for companies with global value chains as those types of claims (whether brought in English law or through the laws of the country where the alleged harms occur) are typically brought against both the local group company as well as its parent company.
• Finally, the CoA's decision that there was little risk of irreconcilable judgments in the present case and the defamation proceedings is important because it recognises that case management of complex cases in England has evolved to the point where it minimises the risk of irreconcilable judgments between cases.