Did the Cambodian sugar case settle?

Introduction

The “Everything But Arms” initiative allows “least developed countries” to export goods to the European Union free from quotas or tariffs. But as businesses clutch at the economic opportunities presented, the laudable ideals that motivate this initiative have in practice been accompanied by allegations of corruption and human rights abuses.

This is the background to the Song Mao case, a claim brought in England by some 200 Cambodians against well-known companies which bought Cambodian sugar cane. The defendants in the English proceedings are (1) Tate & Lyle Sugar Industries Limited and (2) T & L Sugars Limited.

It is a claim that pushes the boundaries of civil liability. It seeks to assert liability on the part of the purchasers of goods – in this case sugar cane – which are said to be tainted by human rights violations.

The claim against Tate & Lyle will require some heavy lifting (Credit: Lee Bryant under Creative Commons)

The trial was listed to start in the Commercial Court in London on 1 October 2014 and last for one week. But it has disappeared from view. Yesterday I telephoned the court’s listing office to ask what happened. They told me that the trial dates were vacated without a new listing set – which might suggest that the case has settled or been stayed while settlement negotiations continue. This post considers some of the issues raised by the case. It is based on my review of the parties’ written pleadings, to the extent that they are publicly available here and here.

The claim

The claimants assert that in 2006 the Cambodian government unlawfully deprived them of their land when it granted land concessions to companies (unrelated to the defendants) in which a senator from Cambodia’s ruling political party has an interest.

The claimants further allege that they were violently expelled from their land by security services and that one person was killed in the process. The land was then used to grow sugar cane on an industrial scale, motivated in part by export opportunities in Europe.

In 2009, Tate & Lyle Sugar Industries Limited (the first defendant) entered into a five-year contract to buy raw sugar grown in Cambodia. The first consignment of about 10,000 tonnes arrived in England in the summer of 2010. Later that year, Tate & Lyle sold its sugar refining business to American Sugar Refining Group (“ASR”), the world’s biggest sugar refiner, and transferred the Cambodian contracts to T & L Sugars Limited (the second defendant) which proceeded to take further deliveries. (Tate & Lyle’s website explains that the “Tate & Lyle Sugar” name was licensed to ASR to ensure that the familiar “Tate & Lyle” brand remains on supermarket shelves.)

The claimants put their claim on the basis that when the defendants took delivery of sugar which had been grown on the claimants’ land, the defendants wrongfully deprived the claimants of their property. The claimants allege that the defendants knew or should have known that they had been violently and unlawfully expelled from their land.

The tort of conversion used to pursue a remedy for victims of alleged human rights abuses

At least three aspect of the Song Mao case are immediately quite striking.

• First, the identity of the defendants – they are not the Cambodian companies, their owners, the Cambodian government or security services. Instead, the claimants claimed against the companies which bought the sugar cane: transactions that took place years after they say that they lost their land.

• Secondly, the jurisdiction – the claimants issued their claim in England because that is where the defendant purchasing companies are registered and where the sugar cane ended up.

• Thirdly, the claimants’ reliance on the tort of conversion – which protects possessory interests in personal property. This is a tort that we would be forgiven for not knowing much about. Even Lord Neuberger (the President of the UK’s Supreme Court) has said, in a foreword to a book on the subject, that although every lawyer “knows that the tort of conversion exists… it is a subject about which very few of us know much, if anything.” One academic survey of the case law on conversion concludes that “even the most basic features of the tort are ambiguous.”

A different sort of conversion (Credit: Dave Griffiths under Creative Commons)

I first heard about the Song Mao case in an article by Professor Mohan in a special volume of the American Journal of International Law reflecting on the US Supreme Court’s 2013 decision in the Kiobel case. As is well-known, the US Supreme Court held that a presumption against territoriality applies to claims brought under the Alien Tort Statute 1789. Chief Justice Roberts reasoned that the claims in Kiobel could not proceed because the allegations did not “touch and concern the territory of the United States … with sufficient force to displace the presumption.” One possible result of Kiobel is that lawyers have started to give greater attention to pursuing remedies in jurisdictions other than the US. Professor Mohan presented the Song Mao case as a tonic for those who might be anxious that Kiobel scuppers hopes of obtaining redress for victims of human rights violations. He argued that Song Mao demonstrates that plausible alternatives exist to litigating foreign wrongs in the United States. He described the Song Mao case as an example of a “pedestrian” cause of action, a “run-of-the-mill” or “garden-variety” tort.

The US Supreme Court is stunning, but its decision in Kiobel made other jurisdictions more attractive (Credit: MitchellShapiroPhotography under Creative Commons)

It does not seem to me, however, that the Song Mao claimants’ reliance on the tort of conversion is straightforward. Claims based on conversion generally arise from interference with possessory rights in relation to goods, not land. In Song Mao, however, the underlying complaint is really about interference with land. The claimants therefore face a hurdle: they would need to persuade an English judge that the tort of conversion offers a remedy in relation to objects produced on, then removed from, land.

It might be that this hurdle could be overcome. But I doubt that it would be pedestrian or run of the mill. The book mentioned above identifies a handful of old cases involving assets severed from land – in particular unlawful mining for minerals. But would a judge conclude that sugar cane itself belonged to the claimants just because it was grown on their land?

On one view, ownership of land should include everything that is grown on it. But might a judge distinguish, for example, mining for minerals already on (or under) land from the use of land to grow crops from scratch? Perhaps the answer to such questions would be found in the measure of damages to be applied, rather than precluding liability altogether. But it is not clear whether the tort of conversion would provide a straightforward remedy against the purchasing companies.

Was it the claimants’ land in the first place?

In addition, establishing liability on the part of the purchasing companies would seem to presume that the claimants could prove that it was their land in the first place. This raises further questions if the claimants would have to prove that the Cambodian land concessions were invalid.

English courts will generally not question the validity of foreign laws. To do so is to assert jurisdiction over the internal affairs of another state. Could an English judge nevertheless be persuaded to examine the validity and effect of events in Cambodia, including allegations that potentially criticise a foreign government?

The case law in this area is developing. There are well-known examples discussed in textbooks when English courts have refused to recognise foreign laws, in particular laws which grossly infringe human rights or breach public international law in a flagrant manner. In the landmark decision Somerset’s Case (1772) an English court refused to recognise slavery laws. In Oppenheimer v Cattermole [1976] AC 249, the House of Lords refused to recognise a discriminatory German decree that deprived Jewish émigrés of their nationality and confiscated their property. In Kuwait Airways v Iraqi Airways Nos 4 and 5 [2002] UKHL 19, the House of Lords refused to recognise an Iraqi law that transferred title to aircraft following Iraq’s invasion of Kuwait – a flagrant violation of international law.

More recently, in Belhaj and Boudchar v Straw and others [2014] EWCA Civ 1394, the Court of Appeal applied overriding public policy considerations when it held that the English court should exercise jurisdiction over a claim that alleges complicity in alleged US torture and other violations committed by way of unlawful detention, abduction and rendition. (This case is currently on appeal to the Supreme Court.) In Rahmatullah v the Ministry of Defence and others [2014] EWHC 3846, Leggatt J possibly went even further, suggesting that an English court should not be deterred from examining the conduct of foreign states if “the examination of such conduct is necessary in order to decide a question of domestic legal right within the court’s competence.” (para. 163)

For the claim in Song Mao to succeed in England, the court would need to be persuaded that the violations alleged are such that it should examine the validity of the relevant Cambodian laws. Do they amount to the sort of gross violations that the courts had in mind in previous cases? Or is it too artificial and difficult to distinguish between different sorts of violations in such a way? Should the (seemingly broader) approach of Leggatt J be preferred and applied to a claim based on the tort of conversion?

This is a difficult and developing area. In Rahmatullah, Leggatt J cited FA Mann’s observations that the foreign act of state doctrine is “one of the most difficult and most perplexing topics which, in the field of foreign affairs, may face the municipal judge in England.” (para. 97) FA Mann also described the related concept of comity as “so elusive and imprecise … as to render its use unhelpful and confusing.” Dicey, Morris & Collins describe comity as “a term of very elastic content.”

Therefore, the claim in Song Mao relies on a tort about which few of us know very much and invites the English court to venture into areas that are elusive and imprecise. This is hardly run of the mill stuff.

Does it matter what the defendants knew or should have known?

You might think that it is simplistic to ask whether it matters what the defendants knew about the circumstances surrounding their purchase of Cambodian sugar cane.  Of course it should matter!

But the tort of conversion is a tort of strict liability, meaning that a defendant’s intentions towards a claimant are irrelevant. If a defendant deprived a claimant of his or her superior possessory rights, the defendant is liable whether he intended to take the claimant’s goods or not. This is a potentially unfair aspect of the tort of conversion: a party can be liable even when they are innocent in moral terms.

We could debate the morality of defendants’ alleged involvement, or point to the emphasis in Principle 17 of the UN Guiding Principles on Business and Human Rights on human rights due diligence, including in relation to suppliers. But for present purposes, it is an interesting aspect of the claimants’ pleaded case that they place substantial emphasis on what the defendants knew or should have known about the source of the Cambodian sugar they purchased. Even though such matters might not have been strictly necessary to the claim as a matter of English law, the claimants sought to put the defendants’ knowledge of their supply chain in issue.

Why did the claimants articulate their claim in this way? Perhaps it was an astute strategic pleading: would the defendants welcome public judicial scrutiny of their supply chain, particularly in a year that has included more than one profits warning for Tate & Lyle plc?

Conclusions

This post is but a short and simplistic snapshot of proceedings in England arising from alleged human rights violations in Cambodia. The Business & Human Rights Resource Centre and the Clean Sugar Campaign have more information and describe related proceedings launched against various parties in different fora.

The disappearance of the Song Mao case from the Commercial Court’s listings deserves greater attention than it seems to have received. It might be that the English proceedings have not settled conclusively. They might have just been stayed while attempts are made to reach a broader settlement involving other interested parties. In December 2014, the Guardian reported on a joint EU-Cambodian scheme to “ensure redress” and restore “pre-project living standards and income levels” for those affected. It also appears that the European Union has been hiring consultants to provide “technical assistance for the inception of an assessment of claims pertaining to the sugarcane plantations in Cambodia.”

If the proceedings have been stayed rather than settled, Song Mao is not just an example of a claim that seeks to push the boundaries of civil liability in English law. It suggests that in certain circumstances a litigation strategy that enmeshes large foreign (purchasing) companies in complex litigation can provide some traction to work towards a broader settlement of allegations of land grabbing in Cambodia.