HT-2022-000304 - [2025] EWHC 1601 (TCC)

At the heart of BHP’s argument is the assertion that the facts, and grounds, which underlay the compromised ASI Application and the Contempt Application are the same. At the heart of both lies the existence of the IBRAM Claim.

Mr Scott KC points to the statement in support of the Contempt Application (at paragraphs 6 and 7 of the First Affidavit of Mr Neill), that:

Mr Scott KC contends that both those facts – the inability to withdraw the IBRAM Claim and BHP’s commitment to funding the IBRAM Claim in full – were known to the MCs at the date of the Consent Order. The word ‘now’ in the evidence quoted above is, therefore, misplaced.

At the time of the filing of the ASI Application, BHP’s position in correspondence was its denial of participation in IBRAM’s decision to initiate the IBRAM Claim, as set out in SM’s letter of 20 June 2024. As initially brought, there was no allegation that BHP were funding the IBRAM Claim. However following receipt of SM’s letter of 13 July 2024, this allegation was advanced by the MCs in their skeleton argument served on 19 July 2024, at least to the extent permitted by the Sponsorship Agreement. At paragraph 4 of that document, Mr Oudkerk KC for the MCs relied upon the following factual assertion:

In paragraph 50 of the second witness statement served by Mr Neill in support of the ASI Application following the receipt of the letter dated 13 July 2024, Mr Neil referred to its paragraph 5(a), set out at paragraph ‎20 above. The letter stated that prior to the filing of the IBRAM Claim, BHP Brasil was asked by IBRAM ‘to cover all costs’ associated with the IBRAM Claim and that BHP had agreed with IBRAM that it would do so. It said that IBRAM had incurred costs on this basis. It is this, along with paragraph 5(f) of the letter, that is relied upon by Mr Scott KC to assert that the MCs knew, or should have known, that BHP’s funding obligation in respect of the IBRAM Claim was unlimited. As such, it is said that their state of knowledge was materially the same at the date of compromising the ASI Application as it was when launching the Contempt Application.

In respect of paragraph 5(a), Mr Neill’s evidence was as follows:

The witness statement then goes on to refer to the Sponsorship Agreement. Mr Neill then reiterated that it was unclear what legal obligation was said to require BHP Brasil as a generality to pay IBRAM for the costs in relation to the IBRAM claim.

The agreement ‘to cover all costs associated with the IBRAM Claim’ (as per paragraph 5(a) of the 13 July 2024 letter) was also referred to at paragraph 32.1 of the MCs’ skeleton argument, as follows:

The reference to ‘Michael 25’ is a reference to Efstathios Michael’s twenty-fifth statement, served on behalf of BHP in respect of the ASI Application which was entirely silent on the question of funding, whether through the Oral Agreement, the Sponsorship Agreement or otherwise.

Mr Scott KC is right that the letter of 13 July 2024 can be read consistently with the existence of both the Oral Agreement (an agreement to fund all the costs) and the Sponsorship Agreement (a capped agreement to fund the costs), with paragraphs 5(a), (e) and (f) based on the existence of the former and 5(b) to (d) dealing with the latter. However, it is also plain that, as a matter of fact, the letter left the MCs’ lawyers with the clear impression that the only substantive or legally enforceable agreement between the parties was the Sponsorship Agreement, a document produced to give effect to a generalised ‘agreement’ reached earlier, and that the Sponsorship Agreement contained a cap on funding from BHP. This was an entirely understandable conclusion to draw given (a) the failure on the part of BHP to explain clearly the existence of the Oral Agreement in the terms it later came to do; (b) the focus within the letter upon the Sponsorship Agreement and its terms, including the cap. As observed earlier, in reality, the Sponsorship Agreement was, as BHP now put its position, of complete irrelevance to BHP’s apparently overarching obligation, as a result of the Oral Agreement, to fund, to an unlimited extent, the IBRAM Claim. It is right that the precise meaning of paragraph 5(f), in a context where the Sponsorship Agreement governed the extent of funding, is unclear but could be read as a reference to BHP undertaking to deny the existence of some sort of estoppel, which is hinted at by reference to IBRAM’s reliance at paragraph 5(a), should the cap within the Sponsorship Agreement be reached.

BHP could have chosen, in advance of the hearing of the ASI Application and its compromise shortly before, to provide the information they later provided as to the Oral Agreement, together with a copy of the Sponsorship Agreement, and a clear explanation of their position, as later advanced, that they had a binding, unlimited obligation pursuant to the Oral Agreement to fund the IBRAM Claim. The letter of 13 July 2024 does not transparently convey that position. It certainly does not make it ‘obvious’, as has been submitted. BHP chose not to state the position unambiguously. The consequence of failing to do so was to leave the MCs with the impression, as clearly articulated in Mr Oudkerk’s skeleton argument at paragraphs 4 and 32.1, that the relevant legal obligation upon BHP to fund the IBRAM Claim was capped at a sum of R$6m, of which the majority had already been spent with the initial filing. This impression was not corrected by BHP between the service of the skeleton argument and the Consent Order. On the basis of this impression, the MCs would understand that there was a relatively small amount of remaining legal funding available to IBRAM for future applications or hearings, and the Consent Order would prevent any further or new agreement to provide funding from BHP.

Therefore, I do not accept BHP’s assertion that the MCs knew, or should reasonably have understood, that BHP had committed fully to fund the IBRAM Claim. BHP’s lack of transparency as to the existing arrangements in the 13 July 2024 letter meant that the MCs justifiably considered that it was capped pursuant to the Sponsorship Agreement.

It follows, therefore, that the MCs understanding of matters has developed since the Consent Order. However, this does not mean that a broadly similar criminal contempt could not have been advanced by the MCs, at least since 13 July 2024 (just over a week before the pending ASI Application hearing at the PTR). The distinction between partial and full funding of the IBRAM Claim and Interim Relief is not of itself likely to be a determinative factor between the existence or non-existence of any alleged contempt. The witness evidence of Anna Varga, served in support of the Contempt Application, states that had the MCs known that BHP were contractually obliged to fund the IBRAM Claim to an unlimited amount, they would not have agreed to the Consent Order in its current form. Given that, as pointed out by Mr Michael in his responsive evidence, Ms Varga does not go to explain what undertakings would have been sought or potentially obtained, I place limited weight on this evidence. Nevertheless, as part of a broad merits-based assessment, it is of some relevance in favour of the MCs that the facts upon which the criminal contempt application is made and those upon which the ASI Application was advanced and compromised are not completely overlapping, and that this is so as a result of the way in which BHP chose to convey the position during the ASI Application and negotiations around the compromise. Moreover, the ASI Application was, for understandable reasons, being prosecuted with expedition and the information at the heart of the Contempt Application, insofar as it was provided prior to the Consent Order, came late in the day.

Also of some importance is the fact that the two applications are different in nature and serve different purposes. The ASI Application was aimed at preventing or limiting the impact of the IBRAM Claim and/or the Interim Relief insofar as was possible and as quickly as possible. However, given the inability to withdraw the claim, once the IBRAM Claim had been set in train, the extent to which any ASI would be possible to limit or reduce the impact of any potential determination by the STF, on an interim or final basis, was (at best) limited. The continuing ability of such proceedings to interfere with matters to be determined in the English High Court could not, therefore, necessarily be effectively managed (as it is in at least the majority of ASIs) by the existence of the civil contempt jurisdiction sitting alongside any ASI. This is amply demonstrated by the fact that, since the Consent Order, two further attempts have been made by IBRAM to impose interim restrictions which would (if successful) have materially affected the MCs’ ability to remain effectively represented in the Main Proceedings without BHP being in breach of the terms of its undertakings to the Court. The interference in the administration of justice (for the purposes of this application which I assume to be reasonably arguable) created by procurement and funding of the IBRAM Claim was therefore largely, at least in practical terms, immune to the effects of the first, urgent, manner in which the MCs attempted to deal with BHP’s manoeuvring in Brazil. Indeed, there are reasonable grounds to conclude that that may be one of the reasons BHP acted in the way it did. Although based on the same or similar underlying conduct, an application for criminal contempt is of a different nature. It is a vehicle through which the Courts can seek to maintain the integrity of the proper administration of justice. As part of a broad merits-based assessment, this distinction favours the conclusion that the bringing of criminal contempt proceedings is not precluded by the compromise reached following the ASI Application. If BHP’s actions were, indeed, such as to constitute a purposeful attempt to interfere with the administration of justice, as I have concluded there are at least reasonable grounds to argue, the Court will not lightly shut out such a claim because the conduct relied upon relates to an underlying civil claim or application which has itself been compromised. Although not a direct analogy, it is, for example, not abusive re-litigation for (as the Court often sees) an insurance company or NHS Trust to bring criminal contempt cases against a dishonest claimant who has lied to the Court in a witness statement after the civil claim has been discontinued or compromised: see Cox J at [36] and [37] of Kirk v Walton [2008] EWHC 1780 (QB). Whether such proceedings are in the public interest is, of course, a separate question to that of abusive re-litigation. Where they are (and I consider this further below), this will plainly weigh against a conclusion that the proceedings are unjust or oppressive.

BHP also argues that knowledge of the Oral Agreement cannot explain the timing of the Contempt Application because the further information was provided on 20 August 2024, yet it took until 7 October 2024 to bring the Contempt Application. It is right that, following 20 August 2024, the MCs did not seek to have the Consent Order varied or discharged, but that may be because by then it had become apparent that the alleged contempt (procuring and legally committing to fund an unstoppable constitutional challenge) was effectively irremediable. Although the timing of the Contempt Application had the potential to disrupt the start of the impending trial, it does not seem to have been pursued in a manner to that end: once the intention to seek to strike out the application was made clear in correspondence (11 days after the date of the application), a 2 day hearing long after the completion of the trial was listed and the Strike Out Application itself was not served until December 2024.

As to BHP’s contention that it would have wished to have compromised any criminal contempt proceedings as part of the compromise reached in relation to the ASI Application, this is not a factor which, in my judgment, outweighs the conclusion that to bring contempt proceedings following the Consent Order is not, of itself, abusive. It would not have been, necessarily, in BHP’s gift to have compromised the contempt proceedings. There is no evidence from BHP suggesting how, in terms, they have been prejudiced in their compromise of the ASI Application other than (a) the distraction prior to first stage trial and (b) being vexed twice by the same effective arguments. As to the first point, this point has to be seen in the context of the timing of the IBRAM Claim itself which could have been procured by BHP, if that is what it wished to do, at any stage since the inception of the Main Proceedings in 2018. There are reasonable grounds to conclude that its timing – in the run up to the first major hearing in the Main Proceedings - was not by chance. I have already dealt with the limited extent to which the substance of the Contempt Application served as a meaningful distraction from the commencement of the October 2024 hearing. As to the second point, this is of course true to an extent but does not amount to a factor which outweighs the other considerations in the balancing exercise.

Providing that it is in the public interest to do so, I conclude on the basis of the broad, merits-based assessment set out above that the bringing of the Contempt Application should not be struck out as abusive re-litigation.