On 28 February 2020 the Supreme Court of Canada in Nevsun Resources Ltd. v. Araya (2020 SCC 5) issued a 5-4 ruling allowing a claim by Eritrean miners against Nevsun Resources Ltd. (“Nevsun”), a Canadian mining company, to proceed. The miners had initiated proceedings in British Columbia against Nevsun alleging, among other things, breaches of customary international law prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity. Nevsun filed a motion to strike the miners’ pleadings, arguing that these customary international law claims had no reasonable prospect of success. Nevsun’s motion to strike was denied, and its appeals to the Court of Appeal and the Supreme Court were in turn dismissed.

The workers’ claims arose out of an expansion project between Nevsun and the State of Eritrea for the development of the Bisha gold-copper-zinc mine in Eritrea. Nevsun indirectly owns 60% of the company that owns and operates the Bisha mine, with the other 40% owned by the Eritrean National Mining Corporation. The miners alleged that they had been conscripted via the Eritrean military’s national service program into indefinite servitude in the mine, contrary to the customary international law prohibitions noted above and domestic torts of conversion, battery, unlawful confinement, conspiracy, and negligence.

In appealing against the dismissal of its motion to strike, Nevsun argued that the “act of state doctrine” barred the workers’ claims because the Canadian courts could not adjudicate upon the sovereign acts of a foreign State, including Eritrea’s national service program. Nevsun further argued that the miners’ claims based on customary international law had no reasonable prospect of success and should therefore be struck.

The Supreme Court considered two questions on appeal:

  • Whether the act of state doctrine forms part of Canadian common law, and
  • Whether the customary international law prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity may ground a claim for damages under Canadian law.


On the first issue, the majority of the Supreme Court, in an opinion authored by Justice Abella, concluded that the act of state doctrine was not part of Canadian common law. Rather than an all-encompassing act of state doctrine, the majority considered that Canadian law had developed its own approach to addressing the twin principles underlying the doctrine: conflict of laws and judicial restraint.  Accordingly, the act of state doctrine did not bar the miners’ claims.

On the second issue, the Court considered that, “Canada has long followed the conventional path of automatically incorporating customary international law into domestic law via the doctrine of adoption, making it part of the common law of Canada in the absence of conflicting legislation.” Specifically, the prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity were jus cogens, i.e., peremptory norms fundamental to the international legal order, from which no derogation is permitted. Consequently, these peremptory norms of customary international law were fully integrated into, and formed part of, Canadian law.

In response to Nevsun’s argument that, being a corporation, it was immune to the application of these customary international law norms, the Court considered that “international law has so fully expanded beyond its Grotian origins that there is no longer any tenable basis for restricting the application of customary international law to relations between states.” Given the evolution of international law to encompass individuals and private actors as subjects, it was not “plain and obvious” (the standard for a motion to strike) that corporations “today enjoy a blanket exclusion under customary international law” from liability. However, the Court recognized that the trial judge would have to determine whether the specific norms relied on in this case were of a strictly inter-State character, and if so, whether the common law should evolve to extend the scope of those norms to bind corporations. For the purposes of the appeal, and in the absence of any Canadian laws to the contrary, the Court concluded that the customary international law norms relied upon by the miners formed part of the Canadian common law and potentially applied to Nevsun.

In addition, the Court considered that there was nothing in Canadian law to preclude the “possibility of a claim against a Canadian corporation for breaches in a foreign jurisdiction of customary international law, let alone jus cogens.” The Court further opined that customary international law norms are inherently different from existing domestic torts, as their violation “shocks the conscience of humanity.” Accordingly, relying on existing domestic torts may not do justice to the specific principles in place with respect to the human rights norm.

Partial dissent

Justices Brown and Rowe agreed with the majority’s dismissal of Nevsun’s appeal in relation to the act of state doctrine, but disagreed that the workers had made out a reasonable cause of action based on violations of customary international law. In their partial dissent, the Justices considered that the two theories on which the pleadings of the workers were based were fundamentally flawed.

In particular, on the first theory of the workers’ claims for breach of customary international law, the partial dissent considered that these claims were viable only if international law were “given a role that exceeds the limits placed upon it by Canadian law…. These prohibitive rules of customary international law, by their nature, could not give rise to a remedy.”

The partial dissent further considered that, as a matter of law, corporations cannot be liable at customary international law for human rights violations; at most, the proposition that such liability had been recognised was equivocal, rendering any such norm non-binding. Accordingly, the claims were doomed to fail.


Justices Moldaver and Cote agreed with the partial dissent that the miners’ claims were bound to fail, and considered in addition that the extension of customary international law to corporations represented a “significant departure in this area of law.”  They further dissented from the majority opinion in relation to the act of state doctrine, opining that the workers’ claims were within the realm of international affairs and therefore not justiciable.

Does Canadian common law present more fertile ground for international human rights claims than the U.S. Alien Tort Statute?

The Supreme Court of Canada’s ruling in Nevsun raises the potential of Canadian courts as a forum for international human rights claims grounded in jus cogens norms—particularly in the context of recent United States Supreme Court jurisprudence limiting the scope and reach of the Alien Tort Statute (“ATS”), which provides that “[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”  28 U. S. C. §1350.

Nevsun presents an interesting contrast with the U.S. Supreme Court cases in two regards: extraterritorial application and corporate liability.  However, it should be noted that, unlike the foreign corporate defendants involved in the U.S. cases discussed here, Nevsun is a Canadian company bound by Canadian law and subject to the jurisdiction of the Canadian courts.  Given the nature of the ATS as a “jurisdictional statute” that creates no cause of action, this distinguishing factor alone may account for the different holdings reached by the Supreme Court of each jurisdiction—if not the Courts’ specific lines of reasoning, which no doubt merit further analysis.

In Kiobel v. Royal Dutch Petroleum Co. et al, 569 U.S. 108 (2012), the petitioners, Nigerian nationals residing in the U.S., filed suit alleging that respondents—certain Dutch, British, and Nigerian corporation—aided and abetted the Nigerian Government in committing violations of customary international law in Nigeria.  The U.S. Supreme Court affirmed the dismissal of the entire complaint by the U.S. Court of Appeals for the Second Circuit, holding that there was nothing in the ATS or its legislative history to rebut the presumption against extraterritorial application. The Court noted, further, that there was “no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms.”

More recently, in Joseph Jesner et al. v. Arab Bank, PLC, 584 U.S. (2018), the Court held that foreign corporations may not be defendants in suits brought under the ATS. The Court, however, did not foreclose the possibility that U.S. corporations could potentially face liability under the ATS: the portions of Justice Kennedy’s opinion on corporate liability were joined only by Chief Justice Roberts and Justice Thomas, whereas Justices Alito and Gorsuch joined only the parts of the opinion concerning the liability of foreign corporations.

As the first case decided by the Supreme Court of Canada on the issue of corporate liability for human rights violations under customary international law, Nevsun arguably reflects an expansive approach to customary international law as a source of rights and remedies as part of Canadian common law, in contrast to the U.S. Supreme Court’s relatively conservative approach to the scope and reach of the ATS.

Specifically, the fact that the alleged jus cogens violations in Nevsun occurred outside Canada’s territory presented no bar to jurisdiction, whereas the U.S. Supreme Court has upheld the presumption against extraterritoriality in the context of the ATS.  Given that extraterritoriality was not discussed in Nevsun, it is not clear to what extent Nevsun’s Canadian nationality may have influenced the Court’s decision. South of the border, the U.S. Supreme Court has foreclosed foreign corporate liability under the ATS, leaving a definitive holding as regards domestic corporations for another day—at which point, there may yet be occasion for the U.S. Supreme Court to consider the modern approach to international law advocated by the majority in Nevsun.

Substantively, in considering the extent to which customary international law norms form part of U.S. common law (in other words, in respect of which violations of the law of nations shall the U.S. district courts have original jurisdiction pursuant to the ATS?), courts in the U.S. would apply the analytical framework set out by the U.S. Supreme Court in Sosa v. Alvarez-Machain, 542 US 692 (2004).

In Sosa, the U.S. Supreme Court inferred from the legislative history of the ATS that “the ATS was meant to underwrite litigation of a narrow set of common law actions derived from the law of nations,” such as offenses against ambassadors, violations of safe conduct, and piracy.  The Court cautioned that, while nothing “categorically precluded federal courts from recognizing a claim under the law of nations as an element of common law,” there were “good reasons for a restrained conception of the discretion a federal court should exercise in considering a new cause of action of this kind.”  Such reasons included the need to seek legislative guidance before exercising innovative authority over substantive law, the potential implications for foreign relations of recognizing private causes of action for violating international law, and the lack of any congressional mandate to seek out and define new and debatable violations of the law of nations.

Accordingly, “federal courts should not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when [the ATS] was enacted.”  In addition, “the determination whether a norm is sufficiently definite to support a cause of action should (and, indeed, inevitably must) involve an element of judgment about the practical consequences of making that cause available to litigants in the federal courts.”

It should be noted that the breach of international law alleged in Sosa was arbitrary arrest—a norm the Court described as expressing “an aspiration that exceeds any binding customary rule having the specificity we require.”  U.S. courts have found that jus cogens violations such as torture meet the Sosa standard.  See e.g., Filártiga v. Peña-Irala, 630 F. 2d 876 (2d Cir. 1980).

In recognising customary international law norms that meet the twin requirements of widespread State practice and opinio juris, therefore, Nevsun is not inconsistent with the jurisprudence of the U.S. Supreme Court, although U.S. courts might exercise greater judicial restraint and deference to the legislative and executive branches of government—themes echoed by the partial dissent and dissent in Nevsun.  Further, given that Nevsun is a Canadian corporation, whereas the U.S. Supreme Court has only precluded the liability of foreign corporate defendants, there currently exists no conflict as regards the nationality of corporate defendants.

The key point of divergence therefore lies in the question of extraterritoriality, and in particular in the two Supreme Courts’ contrasting approaches to this issue.  In Nevsun, the discussion was minimal, in the context of the partial dissent’s argument that the proposed torts of cruel, inhuman and degrading treatment should not be recognized for the first time in a proceeding based on conduct that occurred in a foreign territory. The majority did not reach the question of extraterritoriality in dismissing Nevsun’s appeal on its motion to strike. In contrast, the significance of the U.S. Supreme Court’s decision in Kiobel is difficult to overstate: as Justice Breyer’s concurring opinion put it, the majority’s use of the presumption against extraterritoriality risked “placing the statute’s jurisdictional scope at odds with its substantive objectives, holding out ‘the word of promise’ of compensation for victims of the torturer, while ‘break[ing] it to the hope.’” Any hope of extraterritorial application would rest upon a showing that the claim “touch[es] and concern[s] the territory of the United States … with sufficient force to displace the presumption”—a slim hope, perhaps, but a hope nonetheless.

For more information please contact Andrew Cannon, Partner, Christian Leathley, Partner, Stephane Brabant, Partner Antony Crockett, Of Counsel, Liang-Ying Tan, Associate, Aseel Barghuthi, Associate, or your usual Herbert Smith Freehills contact.

Andrew Cannon
Andrew Cannon
+44 20 7466 2852

Christian Leathley
Christian Leathley
+1 917 542 7812

Stephane Brabant
Stephane Brabant
+33 1 53 57 78 32

Antony Crockett
Antony Crockett
Of Counsel
+852 21014111

Liang-Ying Tan
Liang-Ying Tan
+1 917 542 7831

Aseel Barghuthi
Aseel Barghuthi
+1 917 542 7859


Climate Change: Dutch Court of Appeal upholds the decision of the Hague District Court in Urgenda Foundation v Kingdom of the Netherlands

The Dutch Court of Appeal (the “Court”) has upheld the 2015 decision of the Hague District Court in the case of Urgenda Foundation v Kingdom of the Netherlands, and ruled that the State (ie the Kingdom of the Netherlands) has a duty of care under Articles 2 and 8 ECHR to its citizens to reduce greenhouse gases by at least 25%, relative to the 1990 emission level. All of the defences raised by the State were dismissed.

In its decision the Court stressed that immediate action is required, noting that the later actions are taken to reduce emissions, the more ambitious measures will need to be in the future. In addition, the court held that the State cannot hide behind the EU level reduction target of 20% by 2020, especially as the EU as a whole is expected to achieve a reduction of 26-27% in 2020.

The Court held that by not taking action to reduce emissions by at least 25% by end-2020 the State fails to fulfil its duty of care to its citizens pursuant to Articles 2 and 8 ECHR. A reduction of 25% should be considered a minimum as recent insights about an even more ambitious reduction in connection with the 1.5°C target have not even been taken into consideration.

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Bear Creek Mining Corp. v. Peru: the potential impact on damages of an investor’s contributory action and failure to obtain a social license

In an award dated 30 November 2017 (the “Award“), an ICSID Tribunal ordered Peru to pay around US$30.4million to Canadian company Bear Creek Mining (the “Claimant“) following its finding that a 2011 decree (“Decree 032“) constituted an unlawful indirect expropriation of the Claimant’s right to operate the Santa Ana mine (the “Project“).

This post discusses the disagreement between Karl-Heinz Bockstiegel (the president of the tribunal) and Michael Pryles (appointed by the Claimant) (together, the “Majority“), and Prof. Philippe Sands QC (appointed by Peru), on the assessment of damages. Prof. Sands considered that the damages should be reduced due to contributory fault on the part of the Claimant.

The impact the Claimant’s conduct had on the Tribunal’s calculation of damages was, in any case, significant. Given the extent of, and reasons for, the opposition to the Project by the time of Decree 032, the Tribunal thought a hypothetical purchaser would not have obtained the necessary ‘social license’ to proceed with the Project. Ultimately it awarded the Claimant only a fraction of the US$522 million claimed. The reduced damages award emphasises the importance of respect for human rights and engagement with indigenous communities by investors.

The respective views expressed by the arbitrators concerning the Claimant’s conduct are also interesting in light of the broader debate about the relevance of the human rights of non-parties in investor-state arbitration.

An overview of the overall Award can be found in the post published on 16 December 2017 on the Kluwer Arbitration Blog. Continue reading

3rd EFILA annual conference 2018: parallel states’ obligations in investor-state arbitration – 5 February 2018, London

The European Federation for Investment Law and Arbitration (EFILA) will be holding its third Annual Conference on 5 February 2018 at the Senate House in London. The conference will focus on four topics:

  1. non-disputing third parties and their influence on arbitration;
  2. investment regulation and arbitration;
  3. human rights, environment and arbitration; and
  4. the proposed Investment Court System.

For more information and details on how to reserve a place, please see the conference flyer here. Continue reading

Urbaser v. Argentina and Burlington v. Ecuador: Investment arbitration is not over the counterclaims yet

Two recent decisions by tribunals have advanced the body of tribunal practice considering the issue of counterclaims by respondent states in investment treaty arbitration: Burlington Resources Inc. v. Ecuador, in which the tribunal awarded damages against the investor for breach of Ecuadorian environmental law in the performance of its investment, and Urbaser SA and Consorcio de Aguas Bilbao Bizkaia v. Argentina, in which the tribunal accepted jurisdiction to hear Argentina's counterclaim asserting that the investor had violated international human rights obligations. These decisions arise in the context of conceptual challenges to the pursuit of counterclaims in investment arbitration.

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Herbert Smith Freehills joins UN Global Compact

Herbert Smith Freehills is pleased to announce today that it has officially joined the United Nations Global Compact, the world's largest global corporate sustainability initiative. This commits Herbert Smith Freehills to supporting and implementing the ten principles of the Global Compact on human rights, labour, environment and anti-corruption and requires the firm to publish a Communication on Progress every year, which will describe how the firm has sought to implement these principles. 

As part of its commitment to supporting and implementing the ten principles, Herbert Smith Freehills will:

  1. participate and engage with the Global Compact Local Networks in its main countries of operation;
  2. continue with and build on its work supporting NGO's, charities, and developing country governments through its Pro Bono & Citizenship programme; and
  3. take steps to encourage its clients, suppliers, sub-contractors and other business partners to observe standards similar to those of Herbert Smith Freehills.

Sonya Leydecker, Chief Executive Officer said: " We are delighted to become a signatory to the UN Global Compact.  This is a great initiative which has revolutionised the way in which companies conduct their business to act responsibly and keep their commitments to society. Joining reinforces Herbert Smith Freehills' commitment to the ideals underlying the Compact.  The firm will continue to enhance its business practices in line with the Compact and contribute to the broader dialogue to help achieve the UN's goal of global corporate sustainability" 

Launched in 2000, The Global Compact is the world’s largest global corporate sustainability initiative, with over 8,000 companies and 4,000 non-business participants based in over 160 countries. The initiative is a call to companies everywhere to voluntarily align their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.  To this end, participants across industries are changing the way they operate to implement responsible practices and developing innovative solutions to address poverty and inequality, and support education, health and peace, to name just a few areas.

For more information, please visit or contact Carl Philip Brandgard.

Sonya Leydecker
Sonya Leydecker
Chief Executive Officer
++44 20 7466 2337

Doing business in Africa: human rights and crisis management

Stéphane Brabant, Partner, and Yann Alix, Senior Associate, have published an article on doing business in Africa, focussing on the need for investors taking a long-term view to consider human rights implications and crisis management. To read the full article please click here.

This article was first published in African Banker, Issue 33, 3rd quarter 2015.

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Business, human rights, and extraterritoriality in American law

Beyond Borders: Non-US plaintiffs continue to make inroads towards holding multinational corporations liable under US law for alleged human-rights violations occurring beyond US borders. How can that be?

The Alien Tort Claims Act (ATS) is an eighteenth-century statute that gives federal courts jurisdiction to hear tort claims by non-US plaintiffs for violations of international law committed outside the territorial boundaries of the US. This statute was originally intended to allow a federal cause of action against the predations of US-based privateers on the high seas. Today, it is increasingly being used in an effort to hold corporations doing business on a transnational basis liable for alleged human-rights abuses.

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Indonesia to publish human rights guidelines for businesses

The Jakarta Post has reported that Indonesia’s National Commission for Human Rights (Komnas HAM) is preparing a national action plan containing guidelines aimed at prevent human rights abuses by business actors.  According to the Jakarta Post, Komnas HAM considers that traditional corporate social responsibility activities are “too charity-based” and “the action plan is being prepared to make companies responsible for the negative impacts resulting from their operations”. 

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