By Kirstin Ridley
LONDON (Reuters) - A 5.0 billion pound English lawsuit against Anglo-Australian mining giant BHP (L:BHPB) (AX:BHP) has been struck out, in a blow to a 200,000-strong Brazilian claimant group seeking damages after a devastating dam failure in 2015.
A High Court judge in Manchester ruled that managing the largest group claim in English legal history would be like "trying to build a house of cards in a wind tunnel" and the case was an "abuse of the process of the court".
BHP welcomed the decision, which it said reinforced its view that victims should pursue claims in Brazil and that the case duplicated ongoing work and legal proceedings there.
Tom Goodhead, a lawyer at PGMBM representing the claimants, called the judgment "fundamentally flawed" and vowed to appeal.
"We will continue to fight ceaselessly, for however long it takes, in any court in the world, to ensure that BHP are held accountable for their actions," he said.
The collapse of the Fundao dam, which is owned by the Samarco joint venture between BHP and Brazilian iron ore mining giant Vale (SA:VALE3), killed 19 and sent a torrent of mining waste into communities, the Doce river, and the Atlantic Ocean, 650 kilometres (400 miles) away. It was Brazil's worst environmental disaster.
The case is the latest battle to establish whether multinationals can be held liable for the conduct of subsidiaries abroad.
The ruling comes about 18 months after the UK Supreme Court ruled that nearly 2,000 Zambian villagers could sue miner Vedanta in England for alleged pollution in Africa because substantial justice was not obtainable in Zambia.
Leigh Day partner Martyn Day, who represented the Zambian villagers, said he took his hat off to the Brazilian claimants' legal team for "having the guts" to take on the vast case.
"The judge seems to me to have been tough on the claimants," he said. "The question for the appeal court will be whether or not he was too tough."
Claimants alleged senior BHP executives sat on Samarco's board, that BHP representatives approved of plans to repeatedly ramp up the dam's capacity, ignoring safety warnings, and that victims have no prospect of proper compensation in Brazil within a reasonable timeframe.
Lawyers for the claimants, who include municipalities, indigenous people, businesses and churches, also argued that under Brazilian law, liability for environmental damage could be imposed on a defendant's ultimate owner.
BHP says it and Vale each poured about $1.7 billion (£1.2 billion) into the Renova Foundation, set up in 2016 by BHP's Brazilian division, Samarco and Vale to manage 42 reparation projects, including providing financial aid to indigenous families, rebuilding villages and establishing new water supply systems.