England considered the most appropriate forum for novel supply chain proceedings involving factory workers in Malaysia

In December 2024, the Court of Appeal (the “Court”) overturned a High Court decision that Malaysia was the proper forum to hear a claim against companies in the Dyson group concerning allegations of forced labour in Dyson’s supply chain in Malaysia, deciding instead that England is “clearly and distinctly” the appropriate forum for the case to be tried. 

Although ultimately fact dependent, it seems likely that the Court of Appeal’s approach to identifying the appropriate forum will be relied upon by claimants in future supply chain liability claims (as well as other tort claims against UK-domiciled parent companies based on allegations of group control).

Key takeaways 

• Whilst analysis of the proper forum is typically conducted as a two-stage process (involving first a consideration of whether England is the proper place to bring the claim and then, if it is not, considering whether, in all the circumstances there is a real risk that substantial justice will not be obtainable in the foreign jurisdiction) the Court of Appeal made clear that  the assessment required is “juridically a single holistic exercise in seeking to identify where the case can most suitably be tried in the interests of the parties and for the ends of justice".
• The Court found that the Judge had failed to give any, or sufficient weight, to a number of factors favouring England as the appropriate forum, including that the primary defendants were domiciled in England, Dyson’s defence of the claim would be conducted and coordinated from England, and that the “centre of gravity” of the claims was in the UK given that the UK domiciled defendant companies were allegedly responsible for the promulgation and implementation of mandatory policies and standards concerning the working and living conditions of workers in the Dyson group’s supply chain. The weight given to these factors is likely to be relevant to future claims alleging liability against UK-domiciled companies with offshore supply chain operations, given that senior management and in-house legal teams tend to be located in the UK (as opposed to in the location of supply chain operations). 
• The Court placed particular emphasis on the fact that there was a real risk the Claimants could not afford to bring the claim in Malaysia (due to lack of external funding), and the inappropriateness of the solution offered by the Defendants to address this (being novel undertakings to, amongst other things, pay certain “reasonable” and “ necessary” costs incurred by the Claimants in the Malaysian proceedings). 

Background to the claim and appeal

The facts of the underlying claim, and the Judge’s reasons in the first instance decision, are discussed in more detail in our previous blog post. 

In summary, the Claimants issued the claim in the UK High Court against three companies within the Dyson Group, two of which are incorporated and domiciled in the UK (the “UK Dyson Defendants”) and one of which is incorporated and domiciled in Malaysia (the “Malaysian Dyson Defendant”) (together, the “Defendants”). The Defendants  had successfully applied to stay the proceedings on the basis that the proper forum to hear the dispute was Malaysia. 

The Court of Appeal considered eight grounds of appeal which alleged errors on the part of the first instance judge in applying the principles of Spiliada Maritime Corporation v. Cansulex Ltd. [1987] 1 AC 460 (“Spiliada”) in determining the appropriate forum to hear the claim. 

Five grounds related to the Judge’s assessment as to whether England was the proper place to bring the claim or whether there was a distinctly more appropriate forum (ie, “Stage 1” of the Spiliada analysis). 

Four grounds concerned the Judge’s assessment as to whether, in all the circumstances of the case, there was a real risk that substantial justice would not be obtainable in Malaysia (ie, “Stage 2” of the Spiliada analysis). 

Whilst Popplewell LJ adopted this bifurcated analysis, he noted that the assessment being undertaken was “juridically a single holistic exercise in seeking to identify where the case can most suitably be tried in the interests of the parties and for the ends of justice” and that factors for Stage 2 may also be relevant to Stage 1. 

Below we discuss what we consider to be the key findings in the Court’s decision. See here for the full judgment. 

Relevance of the English domicile of the UK Dyson Defendants

The Court rejected the argument that the High Court should have considered the factors relevant to the UK domiciled defendants separately from, and before, the factors relevant to the foreign domiciled defendant. 

Although the burden of proof was on the defendants for the claims against the former, and on the claimants for the latter, the Court observed that it was necessary to look "holistically and in the round" at the question of the appropriate forum for all the entities because it has to decide where “the case", i.e. the claims against all the defendants, can most suitably be tried. 

However, the Court found the Judge erred in principle in failing to consider the UK Dyson Defendants’ domicile in England as a factor favouring English jurisdiction. The Court considered domicile to be an important connecting factor in respect of jurisdiction as it "connotes a degree of permanence and allegiance to the country's institutions, including its courts, which means the party can…be expected to meet claims against it in such courts in the absence of sufficient countervailing factors". 

The Court considered the claim against the UK Dyson Defendants to be the "primary claim" and those entities to be, collectively, the “principal protagonist”, including because the relevant policies and standards concerning the working and living conditions of workers in the Dyson group’s supply chain were promulgated by the UK Dyson Defendants and the litigation would be coordinated and conducted by the English officers and employees of the UK Dyson Defendants for all of the Defendants. 

Identifying the “centre of gravity” 

In the first instance, the judge held that “the centre of gravity” of the case was Malaysia solely on the basis that this was where the alleged abusive treatment occurred. 

The Court found this to be a “one-sided" approach, which failed to take into account other relevant aspects of the location of conduct or events relevant to duty, breach, harm and remedy, including that: 

(i) the promulgation of the relevant policies took place in England; 

(ii) the allegation that the Dyson UK Defendants failed both to ensure that the policies were implemented in Malaysia and to adequately respond to complaints of alleged abuse, is an allegation against management based in England, and is primarily alleged to have occurred in England; 

(iii) the alleged unjust enrichment of the UK Dyson Defendants ultimately took effect in England (at their centre of trading); and 

(iv) the proprietary remedies claimed are over profits and products located in England. 

The Court acknowledged that some factors pointed to Malaysia as the appropriate forum, including the suffering of loss and damage by the Claimants, the existence and terms of audits in Malaysia, and the location of the alleged abuse (a matter to which the first instance judge had given primacy). 

However, ultimately the Court considered that, had the Judge taken all relevant matters into account, he would have been bound to treat the centre of gravity as pointing towards England, or at least no more than neutral (and that failure to do so was an error of principle). 

Risk of ‘irreconcilable findings” in related proceedings  

The Court found that the Judge made a serious error of principle and was plainly wrong in finding that there was a real risk of irreconcilable findings in relation to defamation proceedings brought by the UK Dyson Defendants with a similar subject matter to those before the Court, and that that factor pointed in favour of Malaysia. 

Although the issues in each set of proceedings substantially overlapped, flexible case management would minimise the risk of factual issues being tried twice, duplication of court time and conflicting decisions. 

The concurring judgement of Warby J (a judge with significant experience in defamation proceedings) emphasised the ability of the court to avoid the risk of inconsistent outcomes and findings, noting precedent for using case management techniques such as an interim stay of proceedings, sequential trials and transfers from one division to another. 

The Claimants’ ability to fund their case in Malaysia  

In the first instance, the Judge concluded that there was no real risk that the Claimants (and relevant NGOs) would not be able to fund the disbursements necessary to pursue their case in Malaysia. 

In reaching this conclusion, the Court took great comfort from the various novel undertakings offered by the Defendants to the claimants, including an undertaking by the Defendants to pay: 

(i) the “reasonable costs necessary” to enable the Claimants to give evidence in Malaysian proceedings (including affidavit affirmation fees, costs for travel and accommodation, videoconferencing technology and translation fees); and

(ii) the Claimant’s share of interpretation fees, transcription fees and joint expert evidence “to the extent reasonably incurred and necessary”. 

The Court found the Judge was plainly wrong to accept the undertakings as they had “serious flaws” and involved a conflict of interest because (among other reasons): 

(i) they would require the resolution of disputes about whether costs were reasonable and necessary; 

(ii) the Claimants would likely be required to waive legal professional privilege in the resolution of such disputes (giving the Defendants an unfair litigation advantage); and 

(iii) they did not provide a satisfactory dispute resolution mechanism for such disputes and the Defendants would have every reason to enter into protracted negotiations and satellite disputes as to whether costs were reasonable and necessary to further their own litigation strategy. 

Further, the Court found the undertakings to be insufficient in that they only addressed disbursements: 

(i) identified under the Defendant’s “own case management model”, which did not account for any contingencies or changes in the procedural development of the claims; and 

(ii) related to the claims as currently particularized, when it was highly likely the claim would be amended following disclosure.  

Equality of arms 

The Court emphasized that the case involved a “huge imbalance between the impoverished and vulnerable claimants and the well-resourced and commercially experience defendants’ and ‘allegations are of very serious human rights abuses”, to which it considered the first instance judge had given little regard. 

In a case such as this, there is a particular need to “ensure equality of arms” and therefore the availability of well-resourced counsel in England (which was not likely to be available in Malaysia on the specific facts of this case) was a factor favouring England. 

Further, the Court accepted that the fact that the Claimants would not be able to attend a trial in person in Malaysia and would give evidence remotely (via translators) whilst the Defendants would attend in person gave rise to an equality of arms issue. 

This factor pointed in favour of England on the specific facts of this case as the Claimants’ solicitors had indicated that they were able and willing to bring the Claimants to attend in person. 

Court of Appeal’s assessment 

Based on the factors identified above, the Court undertook its own evaluation of the Spiliada factors and determined England to be "clearly and distinctly" the most appropriate forum to hear the proceedings. 

The Court was particularly persuaded by the "serious risk" that the Claimants would not be able to bring their claim in Malaysia due to their lack of funding, which it considered to be a factor “overwhelmingly in favour of England". 

Other connecting factors favouring England included the English domicile of the UK Dyson Defendants, the practical convenience of hearing the matter in England, the coordination and conduct of the litigation on behalf of the Dyson Defendants from the UK, the connection of the issues of the case to England and equality of arms. 

The Court recognised that there were certain differences between the English and Malaysian Law (the latter being governing law of all the claims) which, “all things being equal", it would be preferable for the Malaysian courts to resolve. 

Nonetheless, the Court considered that the English courts were “well equipped" to resolve such issues as a matter of expert evidence and using its own experience, noting the close relationship between English and Malaysian law on the relevant issues.