Limbu v Dyson: English courts willing to determine claims brought by overseas workers that formed part of Dyson’s supply chain

The Court of Appeal recently overturned a High Court decision in Limbu & others v. Dyson Technology Limited & others [2024] EWCA Civ 1564 and determined that England (rather than Malaysia) is the appropriate forum for the claims. This is a significant post-Brexit decision, which reiterates the importance of supply chain due diligence for English-domiciled corporations and the actions or omissions of their overseas group companies.

Background

The case concerns twenty-four Nepalese and Bangladeshi migrant workers who brought claims against three companies in the Dyson group, two of which are domiciled in England, (collectively ‘Dyson UK’), and one based in Malaysia, (‘Dyson Malaysia’). The claimants alleged trafficking, forced labour and being subjected to exploitative and abusive working conditions, including torture, at a factory in Malaysia which was contracted by the Dyson group to manufacture components. Dyson terminated its contractual relationship with the factory in 2021. The claimants alleged, among other things, negligence and unjust enrichment on the part of the defendants by virtue of the control they allegedly exercised over their supply chain. 

High Court decision

The Dyson group companies sought a stay on forum non conveniens grounds and argued Malaysia was the proper place for the claims rather than England. The High Court accepted this argument, but the claimants appealed on both points.

Court of Appeal decision

The Court of Appeal concluded that it would be more appropriate for Dyson UK to be sued in England and considered the following:

1. Appropriate forum

Whilst the corporate head office was moved to Singapore in 2019, the court highlighted that the UK office was still the “operational control centre for the group”, with over 3,500 employees including the sustainability team who are responsible for developing policies and standards to be observed in the supply chain, monitoring and ensuring compliance.

The Court of Appeal also highlighted the leading case of Lungowe v Vedanta Resources plc [2019] UKSC 20, which refers to the circumstances capable of giving rise to parent company liability for harm suffered by individuals resulting from a foreign subsidiary’s operations. This was explored more recently in HRH Emere Godwin Bebe Okpabi v Royal Dutch Shell Plc [2021] UKSC 3 [2021] 1 WLR 1294, which confirmed that such parent liability may exist where the parent exercises a particular degree of supervision and control over its subsidiary, particularly in relation to safety/environmental policies.

2. Access to justice

The Court of Appeal accepted that the claimants were impoverished and therefore at a significant financial disadvantage. In a case of huge imbalance and very serious human rights abuses, the court stated there was a “particular need to ensure equality of arms in the conduct of litigation”. It found that the claimants would not be able to bring claims in Malaysia and, for this reason, held unanimously that England was “clearly and distinctly the appropriate forum” for the case.

3. Findings

The Court of Appeal found that the High Court judgment involved multiple errors, including:

• domicile of the “principal protagonist”: Dyson UK is domiciled in England and was served here as of right. The Court of Appeal held that this is an important factor in relation to jurisdiction and “connotes a degree of permanence to the country’s institutions, including its courts”;
  
  
• regard for the “centre of gravity”: the High Court considered the centre of gravity to be Malaysia as the abusive treatment is alleged to have occurred there. However, the Court of Appeal considered the relevance to the Vedanta routes and the duty of care of the English companies. Any unjust enrichment would have taken effect in England at the centre of Dyson UK’s trading and the proprietary remedies claimed are of property rights over profits in England;
  
  
• risk of irreconcilable findings: in a slightly uncomfortable moment for Dyson (who issued defamation proceedings in the English court in respect of a Channel 4 broadcast regarding the allegations), the Court of Appeal highlighted that by having the claim in the English court would likely succeed in avoiding duplication of proceedings and the risk of inconsistent judgments;
  
  
• reliance on undertakings: due to the difficulty in accessing justice in Malaysia, Dyson gave undertakings to support with disbursements. However, the court noted that Dyson’s undertakings were “unprecedented” and the High Court’s reliance on them was not an appropriate way of resolving disputes.

The claim will be remitted to the High Court to proceed to trial and will be one to watch over the course of 2025. The claimants will still need to show that the duties of the UK-based group company extend to contractors and suppliers. They have indicated an intention to apply to join the factory as a third party to the claims.

Key takeaway

This case marks another effort of claimants focussing claims against English-domiciled companies arising in jurisdictions where it may be more difficult to obtain access to justice. For UK-based companies with overseas supply chains, this ESG litigation trend demonstrates increasing exposure to supply chain risks and highlights the importance of robust due diligence, monitoring and transparency of the acts and omissions of subsidiaries.

Should you be concerned with potential risks in your supply chain, please reach out to our ESG Team via the details below or fill in our enquiry form and we will be in touch.