Munícipio de Mariana v BHP Group (UK) Limited & Anor
[2023] EWHC 2607 (TCC)
Município de Mariana & Ors v BHP Group (UK) Ltd & Anor
21 December 2023
[2023] EWHC 3281 (TCC)
High Court
Vale wanted to force BHP into arbitration based on a contract BHP didn't sign. The court said BHP wasn't bound by the contract's arbitration clause, and the case wasn't about issues covered by it, so the arbitration couldn't proceed.
Key Facts
- •Vale S.A. (Vale) applied for a stay of Part 20 proceedings against BHP Group (UK) Ltd and BHP Group Ltd (BHP) under section 9 of the Arbitration Act 1996.
- •The dispute relates to the 2015 Fundão Dam collapse in Brazil, with Mariana bringing claims against BHP for compensation.
- •BHP brought Part 20 claims against Vale seeking contribution.
- •The arbitration clause is in a Shareholders Agreement (SHA) between Vale, BHP Brasil Ltda, and Samarco Mineração S.A. BHP is not a signatory to the SHA.
- •Vale argues BHP is bound by the arbitration clause under Brazilian law, while BHP disputes this and claims the Part 20 matters are outside the clause's scope.
- •The court considered Brazilian principles of contract interpretation and case law on non-signatories being bound by arbitration clauses.
Legal Principles
Section 9 of the Arbitration Act 1996 allows a stay of proceedings if the matter is subject to an arbitration agreement.
Arbitration Act 1996, section 9
The court must determine if an arbitration agreement was concluded and if its scope extends to the dispute.
Golden Ocean Group Ltd v Humpuss [2013] 2 All ER 1025
The standard of proof for section 9(4) applications is the balance of probabilities.
Aeroflot v Berezovsky [2013] 2 Lloyds Rep. 242
In determining the “matter” to be arbitrated, the court considers the substance of the dispute, including foreseeable defences.
Mozambique v Privinvest [2023] UKSC 32
Brazilian law principles of contract interpretation, including Articles 112 and 113 of the Civil Code, apply to arbitration clauses.
Articles 112 and 113 of the Brazilian Civil Code
Under Brazilian law, a non-signatory company can be bound by an arbitration clause if it is the true contracting party or actively participated in the contract’s formation and performance.
Trelleborg Industri AB v AEP, GP Capital v Fernando, Tianda v CCV, Fischer v Totalcom (Brazilian case law)
Outcomes
Vale's section 9 application was dismissed.
The court found BHP was not bound by the SHA's arbitration clause because it did not participate in the SHA's negotiation or performance. Further, the matters in dispute in the Part 20 proceedings did not fall within the scope of the arbitration clause.
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