British court rejects Vale’s appeal in billion-dollar action for Mariana disaster

A British court has rejected Vale’s (NYSE: VALE) appeal against being included in a lawsuit worth at least US$46 billion after the collapse of a tailings dam in Brazil eight years ago. 

Vale had sought to be excluded from the case by challenging the jurisdiction of a court in England to hear a case concerning BHP‘s (NYSE: BHP; LSE: BHP; ASX: BHP) liability for the Fundão dam disaster in the South American country. The Court of Appeal decision on Friday upheld a lower court’s ruling. 

This means that if the claimants are successful in holding BHP liable for their losses, BHP’s third-party claim against Vale will proceed in the English court. BHP wants Vale to pay for half or more of any damages awarded to the claimants because they’re joint owners of Samarco, the local company that ran the Germano iron ore mine where the dam failed. 

The lawsuit is the largest group litigation in English legal history and involves more than 700,000 victims from the failure near Mariana in Minas Gerais state on Nov. 5, 2015. Flooding devastated downstream villages and killed 19 people.

“Yet again we see the world’s two biggest mining companies squabbling in court rather than facing up to their responsibility as owners of the mine and dam that caused Brazil’s worst-ever environmental disaster,” said Tom Goodhead, CEO at Pogust Goodhead, the legal firm representing the victims.

“No amount of money will be enough but hiring the most expensive lawyers in the world to fight each other in court is a huge kick in the teeth for all those who are continuing to suffer on a daily basis due to this crime.”

Vale said as a shareholder of Samarco, it understands that the solutions created by the agreements in Brazil, especially the Transaction Term and Conduct Adjustment (TTAC), are able to address the demands of the foreign process.

“It is important to clarify that the merits of this action have not yet been assessed or judged,” the miner stated.

“The company also reinforces its commitment to repairing the damage caused by the dam collapse, in accordance with the agreements signed with the Brazilian authorities for this purpose.”

The TTAC was signed by Samarco, Vale and BHP, and various public authorities in Brazil and created the Renova Foundation in 2015. According to Vale, the foundation has invested R$28.1 billion (US$5.74 billion) in reparation and compensation initiatives.