20100917
NEW YORK (Reuters)

A U.S. Appeals Court on Friday dismissed a case against Royal Dutch Shell Plc that could have held the company liable over accusations it assisted Nigerian authorities in violently suppressing protests against oil exploration in the 1990s.

Judges in the U.S. Court of Appeals for the 2nd Circuit in New York ruled that until the Supreme Court deemed otherwise, corporations could not be held liable in U.S. courts for violations of international human rights law.

One judge on the three-member appeals court panel wrote a strong dissent of the majority opinion, calling it "a substantial blow to international law."

The case was brought by families of seven Nigerians who were executed by a former military government for protesting Shell's exploration and development.

Shell has denied allegations of involvement in human rights abuses. The accusations against Shell included violations connected with the 1995 hangings of prominent activist Ken Saro-Wiwa and eight other protesters by Nigeria's then-military government.

The families had sought to make the company the first foreign corporation found liable in a U.S. court for aiding human rights violations abroad under a 1789 U.S. statute, the Alien Tort Statute (ATS).

Chief Judge Dennis Jacobs and Judge Jose Cabranes said in a written ruling that the claims could not be allowed under the statute. They said the trial judge, who declined to dismiss some claims against Shell, should have thrown out all claims.

"We hold, under the precedents of the Supreme Court and our own Court over the past three decades, that in ATS suits alleging violations of customary international law, the scope of liability -- who is liable for what -- is determined by customary international law itself," the ruling said.

It noted that no corporation has ever been subject to any form of civil or criminal liability under the international law of human rights.

"We hold that corporate liability is not a discernible --

much less universally recognized -- norm of customary international law that we may apply pursuant to the ATS.

"Accordingly, plaintiffs' ATS claims must be dismissed for lack of subject matter jurisdiction," the 138-page ruling said in part.

In a dissenting opinion, Judge Pierre Leval wrote:

"The majority opinion deals a substantial blow to international law and its undertaking to protect fundamental human rights.

"According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victims' claims for compensation simply by taking the precaution of conducting the heinous operation in the corporate form," Leval said.

The cases are Wiwa et al v. Royal Dutch Petroleum Co et al, U.S. District Court for the Southern District of New York, No. 96-08386 and Nos. 06-4800 and 06-4876 in the U.S. Court of Appeals for the 2nd Circuit.