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BHP can face £5bn Samarco dam case in London, appeal judges rule

Samarco's dam failure is one of the worst mining disasters in Brazil’s history

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Samarco Dam reconstruction work

BHP PLC will face legal action in London over compensation for the Samarco dam disaster in Brazil after an appeal court overturned an earlier ruling that had dismissed the case.

The court said it would reopen the claim by 200,000 Brazilians for £5bn in damages even though an earlier appeal had also been thrown out on grounds that the case should be heard in Brazil.

Explaining their decision the three Appeal Court judges said: “Whilst we fully understand the considerations that led the judge to his conclusion that the claim should be struck out, we nevertheless believe that the appeal has a real prospect of success”.

Lawyers for the plaintiffs described the decision as a “monumental” judgement.

Tom Goodhead, a partner at PGMBM, which brought the group action, said: “After the case was struck out in March there was a view that this was the end of the road for the victims.

“So it is incredibly rewarding for us to be able to tell them that we still believe they will see satisfactory redress through the English courts.” 

BHP repeated its view that the proceedings do not belong in the UK.

“Issues brought by the claimants are already covered by the work of the Renova Foundation, by existing decisions of the Brazilian Courts or are the subject of ongoing legal proceedings in Brazil.

“BHP will not be distracted from our commitment to do the right thing for the victims of the Fundão dam failure.” 

A joint venture between BHP and Brazilian group Vale, Samarco's Fundao dam failure was one of the worst mining disasters in Brazil’s history.

The collapse of the tailings dam led to toxic mud sweeping through nearby villages, killing 19 people and seeping into the Doce River.

Legal action is also underway in Brazil with recent reports that there the miner faces a potential bill of US$19bn or four times more than a deal originally agreed in 2016, a year after the disaster.

Speaking after today’s ruling, Frederico de Assis Faria, Attorney General of Brazil's district of Mariana, told Reuters that reopening the English case "gives us an opportunity for real justice".

BHP has said previously that a UK case would duplicate the proceedings in Brazil and might impede the work of the Renova Foundation that was set up to manage compensation and repairs.

PGMBM said it applied for a rare oral Court of Appeal hearing on the grounds that most of its clients had not sued BHP in Brazil, so they had the right to claim in the UK.

The appeal is expected to be heard next year and any ruling is likely to be further appealed to the Supreme Court in London for a final judgement.

BHP added it had already paid BRL4bn (£560mln) in compensation for the disaster.

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