NEW YORK, Oct. 6 /PRNewswire/ -- Lovells LLP, an international law firm with US practices in New York and Chicago, today announced that the US Court of Appeals for the Second Circuit affirmed a lower court's dismissal of a case, brought under the Alien Tort Statute, against Lovells' client Talisman Energy Inc.

The Alien Tort Statute, enacted in 1789, has been used in recent years by plaintiffs seeking to hold multinational corporations liable for violations of international law allegedly committed by foreign governments. In affirming the dismissal of the case against Talisman Energy, the Court of Appeals not only emphasized that there was no evidence of any improper conduct by the company but also set a high bar for future Alien Tort Statute cases: In the Second Circuit, including New York federal courts, claims that a corporation aided and abetted or conspired with a foreign government no longer can be maintained unless the company acted with the purpose of facilitating violations of international law.

Marc Gottridge, the Lovells partner who argued the appeal, pointed out that by rejecting the plaintiffs' attempt to premise liability on mere "knowledge," the Court of Appeals imposed a significant barrier to abuses of the statute by plaintiffs. Chief Judge Dennis Jacobs, author of the court's 68-page opinion, wrote that if liability under the Alien Tort Statute "could be established by knowledge of (a government's) abuses coupled with only such commercial activities as resource development, the statute would act as a vehicle for private parties to impose embargoes or international sanctions through civil actions in United States courts."

Background

In 2001, the Presbyterian Church of Sudan filed a putative class action in the US District Court for the Southern District of New York, on behalf of residents of southern Sudan. The plaintiffs alleged that Talisman Energy assisted Sudan in a campaign of genocide, crimes against humanity and war crimes. Talisman Energy indirectly operated in Sudan from 1998 through 2003 through the Greater Nile Petroleum Operating Company, in which a Talisman Energy subsidiary then owned a 25-percent stake. Talisman's stake was eventually sold to India's Oil and Natural Gas Corporation Ltd.

In September 2006, the Court granted Talisman Energy's motion for summary judgment and dismissed all claims against it. The plaintiffs appealed the Court's decision and the appeal was argued in January 2009.

The Decision on Appeal

The Second Circuit's affirmance of the District Court's decision vindicates Talisman Energy's conduct during its former involvement with Sudan. As Chief Judge Jacobs noted, "plaintiffs presented no evidence that the company acted with the purpose of harming civilians living in Southern Sudan." Indeed, the Court of Appeals' decision observes, "senior Talisman officials protested to the government" of Sudan when they became aware of allegations of wrongdoing by that country's military. As Chief Judge Jacobs aptly put it, "this evidence of knowledge (and protest) cuts against Talisman's liability."

For future cases, what is useful is that the Second Circuit has set a high bar: plaintiffs may not prevail against corporate defendants merely by alleging knowledge of the wrongs of host governments coupled with ordinary commercial activity but rather must show substantial assistance rendered with the purpose of committing the crimes against international law. As Gottridge points out, this standard, coupled with the recent US Supreme Court decisions requiring plausibility in a plaintiff's complaint (Iqbal v. Ashcroft and Twombly v. Bell Atlantic Corp.) "will make it difficult for plaintiffs' lawyers in the future to subject energy, mining or other companies to years of litigation in strike suits brought under the Alien Tort Statute."

In its decision, the Court of Appeals did not resolve, but instead reserved for another day, an additional argument made by Lovells on behalf of Talisman Energy: that customary international law does not permit claims to be made against corporations. That body of law is directed primarily to the conduct of nations and in some cases individuals, but (as Lovells argued) does not support imposition of liability on artificial "persons" such as corporations. The Court of Appeals held that because plaintiffs' claims failed on other grounds, it was unnecessary to reach that question in this case.

The Talisman decision was the result of years of efforts by a team of Lovells litigators in New York and Chicago, headed by partner Joe Cyr, who heads the firm's US litigation and arbitration practice.

About Lovells LLP

With over 3,000 people operating from 27 offices in Asia, Europe and the United States, Lovells is one of the world's leading international law firms. We advise many of the world's largest corporations, financial institutions and governmental organizations. We regularly act on complex, multi jurisdictional transactions as well as some of the most high profile commercial disputes. Lovells (the "firm") is an international legal practice comprising Lovells LLP and its affiliated businesses. Lovells LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG.

The word "partner" is used to refer to a member of Lovells LLP, or an employee or consultant with equivalent standing and qualifications, and to a partner, member, employee or consultant in any of its affiliated businesses who has equivalent standing.

    For more information please contact:

    Kristina Ferrari
    CJP Communications
    (212) 279-3115 ext. 235
    kferrari@cjpcom.com

    OR

    Gauri Mundkur
    CJP Communications
    (212) 279-3115 ext. 226
    gmundkur@cjpcom.com

SOURCE Lovells LLP