HT-2022-000304 - [2025] EWHC 1771 (TCC)

On 20 June 2025 the claimants issued an application, seeking an order for permission to amend their pleadings as set out in the draft amended Master POC and Appendices. The defendants consent to most of the proposed amendments but some remain in dispute, as do consequential directions for responsive pleadings and minor issues on costs.

Witness statements have been filed in respect of the application:

In addition to tidying up revisions, the proposed amendments that are not opposed by the defendants can be summarised as follows:

Existing Section C6 pleads the chronology of criminal and civil proceedings in Brazil arising out of the collapse of the dam, including the establishment of the Renova Foundation and Novel Scheme to provide compensation to those affected by the collapse. No objection is taken to the general updates to that section but the following proposed amendments to Section C6 and a new Appendix VI are opposed:

“257B. The operation of the Renova schemes provided for by the TTAC and modified in accordance with the TAC Governance, and the further scheme purporting to address the inadequacies of Renova known as the “Novel System”, provoked widespread controversy within Brazil; and generated litigation over several years in the Brazilian courts. On 25 October 2024, the Federal and State Government entities party to the TTAC, the Federal Public Prosecutor's Office (MPF), Samarco, Vale, BHP Brasil and Renova signed a further settlement, the Acordo Judicial Para Reparação Integral e Definitiva Relativa ao Rompimento da Barragem de Fundão (the “Repactuation Agreement”), that, among other measures, superseded the TTAC, the TAC Governance, and provided for the winding up of Renova.

257C. The Repactuation Agreement was ratified by the STF in a decision dated 6 November 2024. In that decision:

257C.1 At paragraph 42 of the STF judgment (and as provided for in Clause One paragraph 3 of the Repactuation Agreement), it was explained that the Repactuation Agreement did not provide for the compensation of supervening or unknown damage as of the date of the agreement.

257C.2 The STF noted that the terms of the Repactuation Agreement made provision for compensation schemes to individuals and municipalities, without prejudice to those parties’ rights to continue to pursue redress via legal action (including the present English proceedings) as an alternative route.

257D. The sums to be dispersed under the terms of the Repactuation Agreement are to be funded, via Samarco or Renova, by Vale and BHP Brasil. The 50% funding for which BHP Brasil is responsible will be provided ultimately by the Defendants or at their expense. The sums payable under the Repactuation Agreement are stated as being:

257D.1 R$ 100 billion to be paid to government entities, in instalments over a period of 20 years, comprising:

257D.1.1 R$ 29.7 billion payable to the Federal Government;

257D.1.2 R$ 25.1 billion payable to the state of Minas Gerais;

257D.1.3 R$ 14.6 billion payable to the state of Espírito Santo;

257D.1.4 R$ 12 billion payable to the Federal Government for allocation to the states of Minas Gerais and Espírito Santo in respect of Universal Health System expenditure;

257D.1.5 R$ 8 billion for reparations related to collective damages and aid to indigenous, quilombola and traditional communities;

257D.1.6 R$ 6.1 billion for the 49 municipalities recognised as having been affected, subject to adherence by the municipality to the terms of the Repactuation Agreement (which is optional);

257D.1.7 R$ 1.65 billion related to Mariana resettlements;

257D.1.8 R$ 1.26 billion for programmes to be administered by the “Institutions of Justice”, which includes judicial authorities; and

257D.1.9 R$ 1.5 billion to complete compliance with the “Definitive Compensation Programme” (“PID”), i.e. a new individual compensation scheme.

257D.2 An estimated sum of R$ 32 billion (£4.1 billion) payable in respect of a range of obligations to be fulfilled by Samarco including: resettlement actions; repair of impacted infrastructures between Fundão and Candonga (i.e. the Risoleta Neves HPP); provision of an environmental recovery plan; the transition and termination of existing obligations from e.g. the TTAC; payment of environmental fines imposed by the Federal Union, the States of Minas Gerais and Espírito Santo, and fines imposed by CIF; and the provision of individual compensation to victims (including PID).

257E Only around 36% of the Claimants currently listed on the Master Schedule are potentially eligible to apply for individual compensation under the Repactuation Agreement. Unless they had submitted a registration request to Renova by 31 December 2021 or under the Novel System by 29 September 2023, those Claimants whose claims were issued in these proceedings in February 2023, and the September Claimants, are not eligible and were not taken into account by the parties to the Repactuation Agreement when calculating the sums to be made available as compensation.

257F The Repactuation Agreement acknowledges that “The obligations outlined in this AGREEMENT aim at the full and definitive reparation, restoration, recovery, compensation, and/or indemnification of socio-environmental damages and collective and public socioeconomic damages of any nature (including social, moral, and non-economic damages) resulting from the DAM FAILURE [i.e. the Collapse] and its developments” (clause 1, paragraph 1). The Repactuation Agreement requires that remedial and/or compensatory measures take place in a total of 49 municipalities (37 of these Municipalities are or have been Claimants in these proceedings) - namely those municipalities identified in the TTAC, resolutions by the CIF and five other municipalities - and in the rural properties (or those who carried out economic activities on rural properties) located up to 5 km from the Gualaxo do Norte, Carmo and Doce Rivers (the “Recognised Areas”).

257G It is to be implied or inferred from the agreement to provide reparation and/or compensation in the Recognised Areas, together with (a) the duty of good faith in Article 422 of the Civil Code, and (b) Article 412, sole paragraph, of the Brazilian Code of Civil Procedure, that those areas (at a minimum) suffered some loss and damage as a result of the Collapse; and further that the Defendants, who were involved in the negotiation of the Repactuation Agreement (as to which see paragraph 257I below), are to be taken as having recognised such, notwithstanding clause 146 sole paragraph of the Repactuation Agreement. On its proper construction, clause 146 sole paragraph merely provides that the terms of the Repactuation Agreement do not represent recognition of a causal link between the Collapse and the specific extent of damage dealt with therein, (save that the Claimants acknowledge that such recognition is expressly negated in respect of the specific areas described in clause 69 sole paragraph of Annex 2 of the Repactuation Agreement). In addition, the conclusion of the Repactuation Agreement is relevant to the reversal of the burden of proof (at least as regards the areas adversely affected by the Collapse and the types of damage caused by it) as described in paragraph 280B below. Further particulars of the Recognised Areas are provided at Appendix VI.

257H Further, in recognition of the ongoing effects of the damage on victims, those who were eligible to claim loss of profits under the Repactuation Agreement were offered compensation calculated to cover lost profits for a period of 125 months after the Collapse (i.e. until March 2026).

257I The Repactuation Agreement was negotiated by the then Chief Legal, Governance and External Affairs Officer (Ms Caroline Cox) and the CEO of the Defendants (Mr Mike Henry). It was executed and/or approved by Mr Henry. The involvement of Ms Cox and Mr Henry in the negotiation and approval of the Repactuation Agreement is relied upon by the Claimants to demonstrate that:

257I.1 notwithstanding the fact that BHP Brasil was named as the BHP group party to the Repactuation Agreement, the Defendants were the real counterparties to the negotiations held with the Brazilian public authorities, Federal and State entities, and Vale; and

257I.2 the obligations accepted under the Repactuation Agreement on behalf of BHP Brasil are obligations that will ultimately be funded (at least indirectly) by the Defendants foregoing dividends that they would otherwise derive through BHP Brasil’s joint ownership of Samarco.”

The essence of the claimants’ case in this part of the new pleading is as follows:

Appendix VI is not limited to the Recognised Areas referred to in the Reparations Agreement but extends to other areas recognised as affected by the collapse under various compensation schemes in Brazil. The claimants plead that they will rely on the Reparations Agreement, TTAC, CIF resolutions, technical notes and reports, and judicial or other public body decisions, as recognition of areas affected adversely by the collapse of the dam and in support of their claims that they have suffered recoverable losses.

Specifically, it is pleaded at paragraph 1.1 of Appendix VI that:

“Many areas were identified (either expressly or by implication) in the agreements negotiated between parties to the relevant Brazilian proceedings, in particular the TTAC and/or the Repactuation Agreement. BHP Brasil’s agreement in this respect was authorised by, and agreed to, by BHP UK and/or BHP Australia, despite neither BHP UK nor BHP Australia being named parties to the relevant document(s). The Claimants will rely on the identification of areas as affected in such agreements, without prejudice to their case that further areas were also affected by the Collapse. By virtue of the Defendants’ participation in the negotiation of and/or procurement of such agreements and/or being the true counterparties thereto (and subject to the terms of paragraph 257G above), the Claimants will contend that the Defendants are precluded as a matter of Brazilian law from contesting herein that those areas were areas adversely affected by the Collapse. Further or alternatively (and subject to the terms of paragraph 257G above) in so far as the issue is one for the lex fori, the Claimants will contend that the Defendants were privy to the negotiation, execution and/or performance of the TTAC and/or Repactuation Agreement and are therefore precluded by English law principles of estoppel or abuse of process from contesting herein that the said areas were areas adversely affected by the Collapse.”

Paragraph 1.3 of Appendix VI states that the materials relied on in the Appendix are merely the starting point, rather than the extent of the claimants’ case as to the areas affected by the collapse of the dam:

“Neither (i) the agreements negotiated in Brazil such as the TTAC (nor, later, the Repactuation Agreement), nor (ii) the additional reports and decisions by relevant public entities and/or decision-making bodies which identify further affected areas, set (or purport to set) a geographical restriction as to the locations where recoverable losses were (or continue to be) suffered as a result of the Collapse. Nor do they set a restriction to the type and/or extent of losses in fact suffered by the Claimants in or reliant upon said locations. In the premises, the Claimants will rely on such instances of identification and/or recognition as a factual starting point, without restriction, in order to establish the extent of the areas affected by the Collapse and the extent of the losses suffered as a result.”

The legal principles applicable on an application to amend are not in dispute. Once a statement of case has been served, a party may amend it only with the consent of the other party or with permission of the court: CPR 17.1.

CPR 17.3 provides that the court has a general discretion to allow an amendment to a statement of case. Where there is no issue of lateness or adverse impact on the trial date, the principles can be summarised as follows:

Mr Choo Choy KC submits on behalf of the claimants that the amendments should be permitted. They are coherent, properly arguable, and raise matters of Brazilian Law on which the court could not, and should not, reach a concluded view on a summary basis.

Ms Fatima KC submits on behalf of the defendants that permission should be refused for draft paragraphs 257B to 257I and Appendix VI. The claimants have not discharged their burden of showing that those amendments are coherent and have a real prospect of success. If permitted, the amendments would add significant time and costs to the parties’ preparations for the Second Stage trial, without any utility.

Having considered the proposed amendments, the court grants permission for the unopposed amendments together with draft paragraphs 257B, C, D, E, F and H. Those paragraphs provide an overview of the Reparations Agreement and rely on specific provisions of the same, in respect of which the claimants have set out their interpretation. The defendants can respond to those matters, including any disputed interpretation of the provisions, in their pleaded defence.

The court refuses permission for draft paragraphs 257G and I, and Appendix VI for the following reasons.

Firstly, the implied or inferred deduction that the claimants invite the court to make is not sufficiently articulated to produce a coherent pleading. Reference to the principle of good faith in entering into and performing contracts does not, without any further explanation, justify the leap, from the stated basis on which compensation claims will be considered under the Reparations Agreement, to deemed recognition of the affected areas as binding on the defendants who were not parties to the same. Likewise, reference to Article 412, sole paragraph, of the Brazilian Code of Civil Procedure does not advance the case that the contents of the Reparations Agreement is binding on the defendants who were not parties to the same.

Secondly, clause 146 of the Reparations Agreement presents a complete answer to the plea that the defendants are precluded from disputing the Recognised Areas as sustaining environmental impact and damage as a result of the dam collapse. Clause 146 provides:

“Without prejudice to the faithful fulfillment of the actions provided for in this AGREEMENT, its signature and assumption of the obligations set forth herein do not imply the acknowledgment by the RENOVA FOUNDATION, the PROMISEE, the SHAREHOLDERS, their RELATED PARTIES and their representatives/employees, of negligence or liability in the civil, administrative or criminal spheres, nor may it be interpreted as recognition of liability, in whole or in part, by the DAM FAILURE.

Sole Paragraph. The terms and obligations defined in this AGREEMENT aim at the resolution of technical and legal controversies between the SIGNATORIES, and do not represent acknowledgment, on the part of the PROMISEE, the SHAREHOLDERS or their RELATED PARTIES and/or the RENOVA FOUNDATION, of a causation between the DAM FAILURE and allegations of damages and impacts addressed herein, including allegations of chemical impacts resulting from the deposition of tailings in the Doce River Basin.” [Emphasis added]

On a reading of the clear words used, the pleaded averment is not plausible. In those circumstances, it is not sufficient for the claimants simply to assert that under Brazilian Law the words do not have their ordinary and natural meaning without any supporting evidence. On an application to amend to plead a foreign point of law, which must be proved as a matter of fact, it is incumbent on the claimants to produce some legal expert opinion or other materials to persuade the court that there is a real prospect of success. None has been provided.

Thirdly, there is no adequate pleading or evidence to support the claimants’ assertion that, although the defendants were not signatories to the Reparations Agreement or named in it, by virtue of their participation in the negotiation of and/or procurement of that (and other agreements) and/or being the true counterparties thereto, they are precluded as a matter of Brazilian law from contesting that the Recognised Areas were adversely affected by the dam collapse. There is no identification of the relevant Brazilian Law principles, no explanation as to their application to the facts of this case and no expert opinion in support, even on a preliminary basis.

Fourthly, the pleaded reliance on an unidentified species of estoppel in paragraph 1.1 of Appendix VI, without any attempt to link the facts of the case to the required elements of the alleged estoppel, has no real prospect of success, as accepted by the claimants in oral submissions.

Fifthly, the pleaded reliance on abuse of process in paragraph 1.1 of Appendix VI, without any attempt to link the facts of the case to the required elements of the alleged abuse of process, has no prospect of success. Mr Choo Choy made a valiant attempt to persuade the court that the rule in Henderson v Henderson applied, as expounded by Lord Bingham in Johnson v Gore Wood & Co [2002] 2 A.C. 1, at 30H–31F:

“The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter … The bringing of a claim or the raising of a defence in later proceedings, may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”

Although not pleaded, in oral submissions it was said that the claimants seek to rely on all of the proceedings in Brazil between the various authorities, Samarco, Renova and BHP Brasil. Even if properly particularised, which it is not, there are two insuperable difficulties with such a case: (i) those proceedings were stayed, discontinued or settled, so that the impact of the dam collapse was not adjudicated upon (and in many cases not pleaded out by the parties); and (ii) the defendants were not parties to those proceedings. There is no real prospect of demonstrating to the court in these proceedings that it is an abuse of process for the defendants to try to “re-litigate” unspecified points that it is said should have been raised by others in unspecified Brazilian proceedings.

Sixthly, the alleged binding effect of the Recognised Areas has no utility in these proceedings because it is pleaded at such a very high level of generality; it is not linked to specific adverse impacts on identified individuals or groups of claimants. The plea in draft paragraph 257G is that: “those areas (at a minimum) suffered some loss and damage as a result of the Collapse”. It is common ground that the collapse of the dam caused widespread damage and pollution. The claimants have pleaded a detailed case as to the overarching consequences of the dam collapse in Section C5 of the amended Master POC. The defendants have yet to plead to the same but they may accept some, or most, of that part of the pleaded case. If admitted, there is no need for any investigation into the underlying reports; if disputed, investigations can be focussed on those areas of dispute. It is open to the claimants to rely on the technical reports and notes referred to in the settlement agreements in support of their position at trial. But the real issue is not whether any areas suffered some loss and damage as a result of the dam collapse; it is whether any of the 600,000 claimants suffered recoverable loss and damage as a result of the dam collapse.

It is said by the claimants that the binding effect of the Recognised Areas is relevant to the existing pleaded case as to the reversal of the burden of proof but in oral submissions it was accepted that the burden of proof point would stand or fall independently of the proposed amendments.

Finally, the defendants’ concern as to the impact of the opposed amendments is well made. I consider that an investigation into the defendants’ participation in negotiations of various settlements in Brazil, including the Reparations Agreement, with the inevitable disclosure, factual witness evidence and Brazilian law evidence, would be a disproportionate waste of time, effort and costs. Further, it would be an unhelpful distraction from the real and very substantial issues to be determined in the Second Stage trial, namely, causation, loss and damage in respect of the lead claimants.

For the above reasons, the draft amendments the subject of the application are permitted, save for the proposed amendments set out in paragraph 257G, paragraph 257I and Appendix VI, which amendments are refused.