July 6, 2010

Nigerian Court Hits Shell With Punitive Damages for 1970 Oil Spill

The on-line Nigerian news outlet Vanguard is reporting that a court in Nigeria has ordered Shell Petroleum Development Company of Nigeria to pay 15.4 billion in Nigerian Nairas for an oil spill that occurred in 1970. That's equivalent to about $102.7 million in U.S. dollars, if I've done the currency conversion correctly.

The Vanguard story says 10 billion of the award is for "punitive damages . . . for general inconveniences, acid rain, pollution of underground water and hardship to the population . . ." That doesn't really sound like "punitive damages" as we know them in the U.S.; it sounds more like compensation for actual injuries.

I have no idea whether Shell has any avenue for challenging the award on appeal, whether it might succeed in such a challenge, or whether the plaintiffs will be able to enforce the award if it sticks. I'll try to keep an eye out for more details on this story.