Court of Appeal of The Hague

Case no. 200.302.332/01 Shell / Milieudefensie c.s.

Questions of the Court of Appeal relating to the oral arguments on 12 April 2024

1. In its Statement of Defence on Appeal (no. 814, no. 883) Milieudefensie/Friends of the Earth Netherlands et al. (hereinafter Milieudefensie et al.) made a number of requests seeking clarification of the judgment. During the first part of the oral arguments, Milieudefensie et al. asked the Court to make it clear that Shell cannot perform its reduction obligation by (in short) selling its assets. In view of the fact that Milieudefensie et al. did not file a cross-appeal, how do these requests correlate with the opinion of the District Court (paras. 4.4.39, 4.4.45) that when executing the order imposed by the District Court, Shell has the leeway to establish its own reduction pathway for the Shell group? In what manner would Shell then, according to Milieudefensie et al., be able to comply with the requested reduction obligation, if the reduction obligation were to be interpreted in the manner argued by Milieudefensie et al.?

Answer of Milieudefensie et al.:

Introductory remarks

According to Milieudefensie et al., the requests for clarification of the Judgment align with the considerations of the District Court, including the considerations set out in paras. 4.4.39 and 4.4.54. The District Court makes it very clear in those considerations what Shell’s “freedom” and “leeway” is to develop its own reduction pathway. What the District Court means is that Shell is free to determine within what countries or business units it achieves CO₂ reductions, and how it divides the total CO₂ reductions within the Shell Group.1

Milieudefensie et al.’s requests for clarification do not detract from this freedom as formulated by the District Court. The requests relate to the interpretation of the Judgment and Shell’s legal obligation that was laid down in the Judgment, the same Judgment that is now being appealed before this Court. The requests do not impair Shell’s freedom and leeway as referred to by the District Court to further shape its own reduction pathway, within the framework of the reduction obligation. Milieudefensie et al. believes that the Court of Appeal is free to provide such clarification and supplementation.

In this case the Court would only be establishing what is already encompassed in the considerations of the District Court, so that there is no impairment of Shell’s position. In addition, the prohibition on impairment relates to the dictum and not the considerations of the Judgment, so that in Milieudefensie et al.’s view, there is also room to tighten up the considerations.2

In addition to the EU ETS, which we will discuss separately in a little while, the requested clarifications relate to three topics. I would like to start with the sale of assets.

Sale of assets: Shell must limit CO₂ emissions to the atmosphere

In the oral arguments, Milieudefensie et al. brought up the point that Shell cannot perform its reduction obligation simply by selling its assets. The District Court’s considerations and Milieudefensie et al.’s assertion that Shell cannot comply with the Judgment purely through the unlimited and unconditional sale of assets are not at odds with each other.

In order to do justice to the Judgment, the District Court’s considerations must be seen in conjunction with both the dictum and the debate between the parties at first instance. I will discuss this relationship between the debate between the parties and the considerations and the dictum of the Judgment in greater detail in the rejoinder.

For the moment we can perhaps suffice by pointing out that Milieudefensie et al. at first instance - prior to the oral arguments, on 15 October 2020 - submitted a Statement of Amendment of Claim. Milieudefensie et al. amended the relief it was seeking in this statement. I have copied and inserted the relevant part of the amended relief sought and highlighted the elements that are relevant to this discussion in yellow.

To order:

that Royal Dutch Shell plc, both directly and via the companies and legal entities it commonly includes in its consolidated annual accounts and with which it jointly forms the Shell group, limit or cause to be limited the aggregate annual volume of all CO₂ emissions into the atmosphere (Scope 1, 2 and 3) due to the business operations and sold energy-carrying products of the Shell group to such an extent that this volume, at the end of the year 2030:

Primarily: will have been reduced by at least 45% or net 45% relative to 2019 levels;