Introduction

The High Court in Da Silva and Ors v Brazil Iron Limited and Anor ("Brazil Iron")¹ has accepted jurisdiction over claims for alleged environmental harm arising from the Brazilian operations of the Defendants' corporate group.  The decision means that the claims will now proceed before the English Courts.

The decision is the latest in a recent trend for the English Courts to accept jurisdiction over claims in respect of the actions (or omissions) of a foreign-domiciled subsidiary company.²  The English Courts have been reluctant to dispose of these claims at an early stage – such as for summary judgment or jurisdictional reasons – instead allowing them to proceed to trial.

Summary: What did we learn?

This decision appears to confirm the expansive approach that the English Courts will take when determining jurisdiction in respect of such claims.  An example is the recent decision in Limbu and Ors v Dyson Technology Limited and Others³, in which the Court of Appeal accepted jurisdiction in respect of claims alleging forced labour practices and similar human rights abuses in Malaysia at facilities owned and operated by the Defendants' suppliers.⁴

The decision of the High Court in Brazil Iron is a further illustration of the English Court's approach to such claims.  As explained further below, the High Court reached its conclusion on jurisdiction in part on the basis that there was a "real risk" that the Claimants would not be able to obtain funding in order to pursue their claims in Brazil.  The High Court considered that was sufficient to give rise to "special circumstances" requiring that the claims proceed in England, notwithstanding that Brazil was the "natural" forum for the claims.

It is striking that the High Court considered that the lack of available funding options in Brazil was sufficient to give rise to a “real risk” that substantial justice could not be obtained in that jurisdiction. There are many jurisdictions, including within the European Union, in which access to litigation funding or conditional fee arrangements is more limited than it is in England, often as a result of considered public policy decisions that take into account local circumstances and preferences.

It remains to be seen whether future claimants will seek to rely (exclusively) on the reasoning in Brazil Iron as justification for seeking to progress proceedings with a significant foreign element before the English courts.  The defendants have sought permission to appeal from the decision in Brazil Iron; at the time of writing the Court of Appeal was still considering whether to grant that permission.⁵

Deep dive: the claim in Brazil Iron

The case concerns claims by 103 Brazilian nationals, including members of the Quilombola people, who alleged that Defendants had allowed the "continuous and unlawful pollution" between 2013 to 2022 from the Fazenda Mocó iron ore mine (the "Mine").  The Mine was owned and operated by Brazil Iron Mineração Ltd ("BIML"), an indirect subsidiary of the First Defendant.⁶

The Claimants allege that the Mine's pollution caused them to suffer environmental damage to their land, physical damage to their properties, and air and noise pollution.⁷  They also allege that they have suffered harm as a result of the invasion of their land, harassment and intimidation by the Defendants' and BIML's representatives in Brazil.⁸

The Claimants allege that BIML operated the Mine under the control and direction of the Defendants, both of which are domiciled in England.⁹  The Defendants were served in England but challenged the jurisdiction of the English court, on the basis that the proper forum for the dispute was Brazil.

The High Court's decision

Following the end of the Brexit transition period, an English court considering a jurisdictional challenge by a defendant served within England will apply the two-stage test set out in Spiliada Maritime Corporation v Cansulex Ltd ("Spiliada")¹⁰.  In applying that test:

1. The burden of proof rests on the defendant to show that England is not the natural or appropriate forum and that there is another available forum which is clearly and distinctly more appropriate (Stage 1); and
2. If so, then the burden shifts to the claimant to show that there are "special circumstances" such that justice requires the trial to take place in England (Stage 2).¹¹

Stage One: Natural or appropriate forum

The Defendants submitted that England was not the "natural or appropriate" forum for the dispute, and that Brazil was an available forum which was clearly and distinctly more appropriate.  The Court agreed with the Defendants that England was not the "natural" forum for the dispute, including because:

1. the "… most important issues …" in the case were likely to concern the operation and regulation of the Mine, and its alleged impact on the Claimants, which ultimately related to matters taking place in Brazil;¹²
2. it was agreed that Brazilian law applies to the dispute, and the relevant regulatory framework is also Brazilian.  The claims were also likely to require consideration of nuanced cultural and social issues, including regarding the status of the Quilombola, with which the English Courts would be wholly unfamiliar;¹³
3. all of the Claimants, and the majority of the witnesses who would likely be called to give evidence, reside in Brazil.  Although the Claimants, and any witnesses, could be transported to England to give evidence, it would plainly be easier and cheaper for that evidence to be received in Brazil;¹⁴ and
4. similarly, much of the documentary evidence, as well as the oral evidence of the Claimants and other Brazilian witnesses, was likely to be in Portuguese.¹⁵

The Court accordingly concluded that the forum with which the claims had the more "real and substantial connection" was Brazil, rather than England.¹⁶

Stage Two: Special circumstances

Having reached its conclusion on the "natural" forum for the dispute, the Court considered whether there were any "special circumstances" such that justice required the trial to take place in England.

Ultimately, the Court concluded that there was a real risk that the Claimants would not be able to obtain substantial justice in Brazil, and that therefore the claims should be permitted to proceed in England.¹⁷  Although the Court accepted that the Brazilian justice system was sophisticated and able to deal with complex proceedings, it concluded that there were features of these claims that created particular difficulties for the Claimants in obtaining justice in Brazil:

1. The Claimants were of limited means and would not be able to fund the claims themselves.¹⁸
2. The claims were of considerable complexity and would require significant resources in order to ensure they were litigated effectively, including by obtaining a large number of expert reports addressing multiple issues.¹⁹
3. The fact that this complexity would in turn increase the time required to determine the claims, thereby increasing the demands on the Claimants' representatives.²⁰
4. Although CFAs and other "no win, no fee" arrangements were available in Brazil, these would not be sufficient to overcome the difficulties in funding the proceedings.  The relatively small size of the individual claims, coupled with the fact that there were only 103 claimants, meant that the operating on a CFA or "no win, no fee" basis would be unlikely to be economically viable.²¹
5. Similarly, there was insufficient evidence that local "legal aid" or pro bono representation would be available to deal with claims of such complexity and cost.²²
6. The undertakings offered by the Defendants, including to submit to the jurisdiction of the Brazilian courts and make prompt payment of any damages awarded in Brazil, were insufficient to remove the real risk that the claims would not be economically viable in Brazil.²³  Further undertakings to pay the cost of technical assistance up to a defined cap were also impractical and risked giving rise to a conflict of interest for the Defendants.²⁴

By contrast, the claimants had been able to obtain legal representatives in England who were prepared to act on a “no win no fee” basis, and to fund additional costs of the litigation (such as the fees of experts and other disbursements).²⁵

In the circumstances, the High Court concluded that there was a “real risk” that substantial justice would not be obtained if the claims were to proceed in Brazil, such that justice required the claims to proceed in England.²⁶

1. [2025] EWHC 606 (KB).
2. See our articles on Limbu & Others v Dyson and Others, Alame & Ors v Shell and Anor, and "Navigating the Rising Tide" [to link to Hub articles].
3. [2024] EWCA Civ 1564.
4. See further: Another step forward for value chain liability claims: the Court of Appeal's decision in Dhan Kumar Limbu & Others v Dyson Technology Limited and Others.
5. CA-2025-000810.
6. Brazil Iron, paragraph [4]-[5].
7. Brazil Iron, paragraph [7].
8. Brazil Iron, paragraph [7].
9. Brazil Iron, paragraph [6].
10. [1987] 1 AC 460.
11. Spiliada, paragraphs [476B] – [476F] and [478C] to [478E].
12. Brazil Iron, paragraph [103].
13. Brazil Iron, paragraph [104].
14. Brazil Iron, paragraph [105].
15. Brazil Iron, paragraph [105].
16. Brazil Iron, paragraph [100].
17. Brazil Iron, paragraph [106].
18. Brazil Iron, paragraph [112].
19. Brazil Iron, paragraph [113].
20. Brazil Iron, paragraph [114].
21. Brazil Iron, paragraphs [120]-[125]. 
22. Brazil Iron, paragraphs [139]-[140].
23. Brazil Iron, paragraph [145]. 
24. Brazil Iron, paragraph [127].
25. Brazil Iron, paragraph [115].
26. Brazil Iron, paragraph [152].