The High Court judge, Mr Justice Constable, rejected on Thursday (26th June) BHP’s strike out of the criminal contempt application filed by the Municipality Claimants against the mining giant for interfering with the proper administration of justice in the Mariana v BHP case being heard in the English Courts.
Finding that the contempt application should be heard and has a real prospect of success, Justice Constable stated “there are reasonable grounds to argue that BHP’s strategy in procuring and funding the (unstoppable) IBRAM Claim, together with interim relief seeking to block access between the Municipality Claimants and their lawyers, was specifically designed with the purpose, as alleged, of interfering with the administration of justice in these Courts”.
Pogust Goodhead’s Global Managing Partner and CEO Tom Goodhead, acting on behalf of the municipalities, said, “we welcome the Court’s determination there are to be ‘reasonable grounds’ to allege that BHP is guilty of criminal contempt and the decision to reject BHP’s attempt to strike out the Contempt Application. This is a significant step forward in holding BHP to account for its sustained efforts to undermine justice to evade responsibility for the catastrophic environmental disaster in Mariana.”
The application was filed on 7 October 2024 by Brazilian municipalities after it was found that BHP made partial disclosures with regard to the true extent of their funding obligations to IBRAM, a Brazilian mining association of which BHP Brasil is a member. BHP was facing an injunction application brought by the Municipality Claimants after secretly procuring that IBRAM file a constitutional challenge in the highest Brazilian court (ADPF) to stop municipalities from bringing claims in jurisdictions outside Brazil, known as the ‘IBRAM Claim’. If the relief sought by IBRAM is granted by the Brazilian Court, this could ultimately force the 31 municipalities affected by the worst environmental disaster in Brazil in 2015 to abandon their claims in the Mariana v BHP case, which have been progressing since 2018 and leave them with no other avenue for compensation than in Brazil.
BHP initially denied any involvement in the IBRAM Claim, but after Pogust Goodhead discovered publicly available IBRAM meeting minutes revealing that BHP had directly asked IBRAM to bring the claim, BHP was forced to admit that it instigated the claim and had agreed to fund it in full. Additionally, at the time, Alexandre Ambrósio—Vale’s Vice-President of Corporate & External Affairs, admitted in a witness statement to the Court that he had been informed by BHP’s Brasil then Legal Vice-President for the Americas (and current CEO of BHP Brasil), Emir Calluf Filho, of BHP’s intention to ask IBRAM to file the ADPF in Brazil. Vale is BHP’s partner in the Samarco joint venture.
As a result, BHP agreed to give undertakings to the English Court not to further assist IBRAM in any way in relation to the reliefs sought by IBRAM, or any materially similar relief sought in the Brazilian Courts with the caveat that BHP could still comply with their existing contractual funding obligations with IBRAM. The Municipality Claimants accepted the terms of the undertakings relying on BHP’s characterisation of their limited funding obligations to IBRAM that were allegedly capped at BRL 6 million under a Sponsorship Agreement.
Once the undertakings had been obtained, Pogust Goodhead discovered that Emir Calluf Filho (BHP Brasil) was directly involved and had agreed to cover all costs incurred by IBRAM in relation to the IBRAM Claim, including circumstances where those costs exceed the total amount provided for in the Sponsorship Agreement.
Mr Justice Constable in his judgment stated: “in light of the Oral Agreement, the Sponsorship Agreement did not encompass the totality of the obligations BHP says that it has in respect of the IBRAM Claim. Indeed, it is not obvious what practical purpose the Sponsorship Agreement was intended to serve in respect of funding the IBRAM Claim if the cap stated in it was effectively subjugated to the overarching Oral Agreement by which BHP committed to fund the entire proceedings to an unlimited extent”.
If found guilty of contempt of court by breaching the Municipality Claimants’ right to a fair trial and obstructing the due course of justice, the BHP companies could be facing unlimited fines.
As such, Justice Constable stressed the importance of protecting the right of the municipalities claimants to have access to justice in England following the Court’s 2023 jurisdictional ruling that England was the correct forum for the dispute regarding the collapse of the Fundão Dam.
Mariana v BHP case – the main proceedings
Pogust Goodhead represents 620,000 claimants in the Mariana v BHP case, known as main proceedings. The claim began in 2018 and was followed a lengthy dispute over jurisdiction in the UK. This was finally resolved by the Court of Appeal, which allowed the case to proceed against BHP. The following year, the Supreme Court refused BHP permission to appeal. This brought the case to its current status of awaiting a liability judgement. The liability trial lasted 13 weeks, from October 2024 to March 2025.
The decision of the main proceedings can find for the first time BHP liable for the worst environmental disaster that ever occurred in Brazil when the Fundão Dam in southeast Brazil collapsed, releasing around 40 million cubic metres of tailings from iron ore mining. BHP is an Anglo-Australian mining company that owns 50% of Samarco, a joint-venture, together with the mining company Vale.
The timeline of the proceedings regarding the IBRAM claim:
- Only five months ahead the liability trial in the main proceedings, IBRAM filed a constitutional challenge on 11 June 2024, in Brazil. It was of a type of suit known in Brazil as an ‘Action Against the Violation of a Constitutional Fundamental Right’ or an ‘ADPF’. It sought that no Brazilian municipality has standing to sue in their own name or to bring actions in jurisdictions other than in Brazil and should be ordered to discontinue their claims abroad. IBRAM is a Brazilian private trade organisation whose object amongst other things is to represent and promote the Brazilian mining industry. BHP Brasil, is a member of IBRAM.
- On 24 June 2024, the municipality claimants filed an anti-suit injunction (‘the ASI Application’) seeking to prevent BHP and Vale from taking any further steps to promote or encourage the IBRAM Claim. Following various exchanges referred to further below, BHP acceded to the ASI application on 22 July 2024 and gave undertakings to the Court, incorporated into a consent order with a penal notice attached (the “Consent Order”), after the claimants revealed that IBRAM Claim was procured by BHP and was brought pursuant to an agreement by which BHP committed to funding the claim in full via a sponsorship agreement. Under the consent order, BHP undertook to not to 1.1. take any steps to pursue or prosecute or progress or encourage or otherwise assist, including but not limited to the provision of any financial assistance, in the IBRAM Interim Relief Claim and in the IBRAM claim; and 1.2. take any steps to pursue or prosecute or progress or encourage or otherwise assist, including but not limited to the provision of any financial assistance, in the obtaining of relief materially identical to the relief sought by way of the IBRAM Interim Relief Claim; and the IBRAM Claim (other than by way of defence and/or counterclaim to claim brought by a Municipality in any jurisdiction). Importantly, BHP negotiated a caveat to the undertaking of not assisting IBRAM any further, including financially, in relation to existing funding contractual obligations and in this context, BHP made reference to one contract only, the Sponsorship Agreement.
- On 10 July 2024, Vale submitted its responsive evidence to the ASI Application, through the witness statement of Alexandre D’Ambrosio. This evidence included the following passage in a section dealing with the decision to bring the IBRAM Claim:
‘During a telephone call with Emir Calluf Filho (BHP Brasil’s in-house counsel) in around April 2024, Mr Filho informed me in high-level terms about the type of claim that BHP were considering asking IBRAM to bring….’
- On 22 July 2024, the Consent Order was agreed, containing the undertakings below:
“(a) Prior to the filing of the IBRAM Claim, BHP Brasil was asked by IBRAM to cover all costs associated with the IBRAM Claim and agreed with IBRAM that it would do so. IBRAM incurred costs on this basis.
(b) BHP Brasil and IBRAM subsequently agreed to enter into a sponsorship agreement that would cover the costs of the IBRAM Claim and potentially costs associated with other initiatives relating to the mining industry (the “Sponsorship Agreement”).
(c) The Sponsorship Agreement provides for an initial amount of R$1,000,000, which can be increased to a total amount of R$6,000,000. Prior to the parties agreeing the Sponsorship Agreement, BHP Brasil was informed by IBRAM of the costs being agreed and incurred in relation to the IBRAM Claim and it was clear by the time of the Sponsorship Agreement that the costs in relation to the IBRAM Claim would exceed the initial amount of R$1,000,000 such that (in line with the agreement to cover the costs of the claim) the further amounts available under the Sponsorship Agreement would be required.
(d) BHP understands that IBRAM has incurred costs of approximately R$4,100,000 in relation to the IBRAM Claim, and that BHP Brasil is contractually bound to pay those costs.
(e) As such, the proposed Paragraph 1 Undertakings contain a carve-out permitting BHP to provide funding to IBRAM in accordance with BHP Brasil’s agreement to fund the costs of the IBRAM Claim. In this regard we note that BHP Brasil has not made any payment to IBRAM to date to fund the costs of the IBRAM Claim.
(f) BHP will procure that BHP Brasil will use best endeavours to agree with IBRAM that the funding to be provided by BHP Brasil in respect of the costs of the IBRAM Claim will be capped at R$6,000,000 and that no further funds will be provided beyond those provided under the Sponsorship Agreement.”
- On 20 August 2024, before disclosing the Sponsorship Agreement, after requests from Pogust Goodhead to do so, BHP sent a letter to Pogust Goodhead, disclosing for the first time and after the consent order was obtained, the existence of a second (oral) agreement exposing the reality that BHP’s contractual obligations to fund IBRAM are unlimited. In Constable J.’s judgment, an extract reads as follows:
“on 3 April 2024, Emir Calluf, Vice President, Legal, Americas at BHP Brasil, met with Raul Jungmann, IBRAM’s CEO, and Rinaldo Mancin, IBRAM’s Director of Institutional Relations. At this meeting, Mr Calluf and Mr Jungmann and Mr Mancin discussed the possibility of IBRAM bringing the IBRAM Claim and, at Mr Jungmann’s request, Mr Calluf agreed that BHP Brasil would pay for all costs incurred by IBRAM in relation to the IBRAM Claim (if IBRAM decided to bring the claim). Therefore, as and from 3 April 2024, BHP Brasil was contractually bound to provide the funding to pay all of IBRAM’s legal fees incurred in connection with the IBRAM Claim, including in circumstances where IBRAM’s costs for the IBRAM Claim exceed the total amount of R$ 6,000,000.00 provided for under the Sponsorship Agreement.”
- On 23 August 2024, BHP discloses the Sponsorship Agreement for the first time to the Municipality Claimants. Pogust Goodhead then discovered that nowhere is the IBRAM Claim mentioned in the Sponsorship Agreement.
- Constable J. in his judgment explains that: “in light of the Oral Agreement, the Sponsorship Agreement did not encompass the totality of the obligations BHP says that it has in respect of the IBRAM Claim. Indeed, it is not obvious what practical purpose the Sponsorship Agreement was intended to serve in respect of funding the IBRAM Claim if the cap stated in it was effectively subjugated to the overarching Oral Agreement by which BHP committed to fund the entire proceedings to an unlimited extent. To the extent the Oral Agreement is as BHP contends, it also follows that, pursuant to the carve out within the Consent Order, BHP would be permitted to continue to fund the IBRAM Claim – which itself cannot be stopped – to an unlimited extent”.
- The evidence also demonstrated that Vale, the Brazilian mining company and partner in the Samarco joint venture, stated in its witness evidence to Pogust Goodhead that the former Vice President Legal Americas for BHP – and current CEO of BHP Brasil – Emir Calluf Filho, had called a Vale executive and informed them of the plan to ask IBRAM to file an ADPF in Brazil.
- On 7 October 2024, the Municipality Claimants filed the Criminal Contempt Application on the grounds that BHP wilfully interfered with the proper administration of justice in England by procuring that IBRAM file the ADPF and misleading the Municipality Claimants when negotiating a caveat to the undertakings given in the consent order, permitting BHP to continue to fund the IBRAM Claim.
- Even after the ‘consent order’, on 9 October 2024, IBRAM filed a new petition in Brazil, which sought: (i) the immediate suspension of any contracts between Brazilian Municipalities and any other entity in connection with any lawsuits in foreign jurisdictions, including suspension of the supply of information and payments under such contracts; (ii) that certain Brazilian Municipalities be compelled to apply to suspend any foreign proceedings pending the outcome of the IBRAM Claim, (iii) orders preventing them from bringing any new proceedings or claims, or performing new acts within existing claims, and (iv) that certain Brazilian Municipalities disclose all contracts with third parties in connection with foreign proceedings (the “October Petition”). This developed an argument that “success fee” contracts are illegal under Brazilian law.
- On 12 October 2024, and on the basis of the success fee argument, Justice Dino, a Supreme Court Justice in Brazil, ordered that the Municipalities: (i) disclose contracts with foreign law firms; and (ii) refrain from paying any fees to them, pending a decision on the merits of the IBRAM Claim (the “October STF Order”). The STF ratified that order on 5 November 2024. No other orders on the October Petition were made.
- On 21 October 2024, the liability trial began in the English Court, in which Pogust Goodhead, representing 620,000 claimants, argued that BHP was responsible for the collapse of the Fundão Dam in 2015, which killed 19 people and caused the miscarriage of a pregnant woman.
- On 25 October 2024, the ‘Repactuation Agreement’ was signed in Brazil and ratified on 6 November 2024. This is a compensation scheme made between Samarco, Vale, BHP Brasil and the Renova Foundation (the “Brazilian Companies”), the governments of Minas Gerais and Espírito Santo, the Federal Government, and several Brazilian justice institutions. It renegotiated the settlement terms of prior agreements in relation to various Brazilian proceedings. The MCs were not parties to the Repactuation Agreement and were not involved in its negotiation.
- On 12 December 2024, BHP applied to strike out the Contempt Application. This judgment determines that application following a hearing on 4 June 2025. In its strike out application, BHP argue that (1) the Contempt Application is an abuse of process because (i) it is an abusive attempt to relitigate matters that were disposed of by the Consent Order; (ii) it does not serve the public interest; and (iii) the MCs are not appropriate guardians of the public interest; and (2) the Contempt Application discloses no reasonable grounds for bringing criminal contempt proceedings.
- On 22 February 2025, IBRAM filed a further petition for interim relief with the STF (the “February Petition”).
- On 3 March 2025, claimants sought and obtained from the High Court without notice relief against IBRAM comprising in particular: a mandatory injunction and declaratory relief, in respect of the February Petition, including an order requiring IBRAM to withdraw it. BHP was not a party to that application. The return date was listed for 15 April 2025. At that hearing, the parties agreed that the mandatory injunction should stay in place pending a full hearing, listed for November 2025. IBRAM (through Leading Counsel) at that time indicated that it did not intend to issue further petitions because the relief that Justice Dino had granted to date was sufficient.
- On 5 March 2025, Justice Dino issued a statement in respect of the February Petition (the “March STF Statement”). It appears to repeat the terms of the October STF Order, i.e., that the municipalities should not pay fees to their foreign lawyers pending determination of the broader claims by the STF.
- On 4 June 2025, a hearing was held to hear the BHP strike out application.
- On 26 June 2025, Mr Justice Constable rejected BHP’s contention that the Contempt Application should be struck out. As a result, BHP’s application fails, and the mining company continue to remain a defendant in the contempt application filed by Brazilian municipalities in the English court, represented by the international law firm Pogust Goodhead.
