ON APRIL 17, the US Supreme Court handed down the long-awaited Kiobel decision, which is considered a blow to human rights victims resorting to the Alien Tort Claims Act to seek redress from corporations that commit human rights violations. The decision has profound implications for South African apartheid victims seeking redress.
The Alien Tort Claims Act is a US statute, enacted in 1789, that provides US federal courts with extraterritorial jurisdiction. This means it allows foreign victims to sue foreign individuals or companies for violations of international law in US courts.
The litigants in Kiobel were members of Nigeria's Ogoni community, who accused Shell of aiding and abetting crimes against humanity, torture and arbitrary execution committed by the Nigerian military against the Ogoni people while protecting Shell's oil interests.
But it was not only Nigerian victims who took advantage of the act. Over the past 20 years, litigants from as far afield as Paraguay, the Philippines, China and Sudan have resorted to the act with varying success. One of the most significant victories was the Swiss banks case in which US lawyer Ed Fagan sued a number of Swiss banks. By allegedly refusing to return money to the descendants of Jews who deposited it shortly before the Second World War, these Swiss banks profited from the Holocaust. The Swiss banks settled for $1.25bn.
The Kiobel decision reached the Supreme Court from the Second Circuit of Appeal, which decided that corporations cannot be held liable under civil law.
In Kiobel, the judges asked two questions: whether the act had extraterritorial application; and whether the act applies to corporations. In answering the first question, the court decided that the presumption against extraterritoriality applies to Alien Tort Claims Act claims. This means the act can no longer be used by foreign plaintiffs who suffer injustice outside the US.
The Supreme Court decided not to answer the second question on whether US courts have jurisdiction to hear claims against corporations if a corporate defendant was domiciled or headquartered in the US. This means that the Second Circuit decision stands and that, for the purposes of litigation in the Second Circuit, corporations cannot be sued under the act.
The effects of Kiobel can be felt in South Africa — most dramatically, it affects the fate of the victims in the Khulumani case. In Khulumani, a group of apartheid victims tried to obtain reparations from multinational companies by suing them in a class action suit under act. According to the plaintiffs, the defendant companies, including such powerful multinationals as IBM and General Motors, aided and abetted the apartheid government in the commission of human rights violations during apartheid and profited from apartheid. The case drew intense interest from US and international scholars and practitioners, and has been described as the most ambitious litigation under the act to date.
The Khulumani case is pending before the Second Circuit Court of Appeal. Because of the Kiobel decision, the Khulumani case will now not succeed in the Second Circuit. The Kiobel case is almost certain to result in the dismissal of Alien Tort Claims Act cases pending before the lower courts. The door to success is, however, not entirely closed. The Khulumani plaintiffs could refile the case in another circuit court in the US.
Kiobel also sounded the death knell for litigation in the Turkcell case, in which Turkcell, Turkey's largest cellphone provider, sued Johannesburg-based MTN for allegedly using bribery to win a mobile licence in Iran. MTN said the act should not have been applied in this case as it does not involve issues of international concern, such as piracy and genocide.
The conservative judgment in the Kiobel case shows disregard for the growing international movement towards recognising international criminal justice.
The Alien Tort Claims Act provided an important and exciting forum to plaintiffs who could not find relief in their home countries. With the Supreme Court choosing an interpretation of the act that denies its extraterritorial application, it reverts to isolationism.
With Kiobel, the US once again snubs the international criminal justice movement and the great strides it has made in creating a new normative framework that prioritises human rights over national sovereignty.
• Swart is professor of international law at the University of Johannesburg.