SIGNIFICANT MILESTONE IN ESG ACTION BROUGHT AGAINST AIRBUS IN AMSTERDAM
The District Court in Amsterdam has delivered a significant decision in a ground-breaking ESG action brought against Airbus. The action is organised and funded by the ESG team at Woodsford. Airbus SE is a European headquartered, multinational aerospace corporation. Airbus designs, manufactures and sells civil and military aerospace products worldwide. In one of the most egregious breakdowns of ESG in recent years, it came to light in the course of investigations by the French Parquet National Financier, the U.K. Serious Fraud Office, and the US Department of Justice that Airbus had engaged in bribery and corruption on a global scale. In January 2020, Airbus agreed to pay penalties of approximately US$4 billion plus interest and costs to resolve foreign bribery charges with US, French and UK authorities. These matters led to a significant drop in Airbus’ share price. Airbus investors who suffered significant losses as a result of these breakdowns in ESG, and Airbus’ failure to disclose them to the market in a timely manner, fall into two main categories – those who trade in Airbus securities within the US, and those who trade in Airbus securities in Europe (France, Germany and Spain). In May 2022, Airbus agreed a multimillion-dollar settlement (subject to U.S. court approval) in the US with investors who fall into the former category. However, the vast majority of affected investors fall into the latter category. Airbus has not yet settled with, and has therefore not yet been held accountable to, investors who trade Airbus securities in Europe. Woodsford brought the above ESG failings, and Airbus’ failure to disclose them to the market in a timely manner, to the attention of major international, institutional investors, and has organised them into a special purpose entity, called Airbus Investors Recovery Limited (AIRL), to engage with Airbus. AIRL has commenced legal proceedings against Airbus in Amsterdam. Woodsford also supports Airbus Investor Recovery Stichting (AIRS), which is also litigating against Airbus. AIRL and AIRS are advised and represented by the Amsterdam office of international law firm Scott+Scott. Unfortunately, it is common for big corporates to react to investor concerns by delaying and obfuscating ESG actions like this. In a move that would have delayed AIRL’s Dutch action, Airbus asked the District Court in Amsterdam to refer the case to the European Court of Justice (ECJ), and to stay (i.e. suspend) the Dutch action pending the outcome of the ECJ referral. Further, Airbus argued that, contrary to AIRL’s simple suggestion that Dutch law should apply to the case on the basis inter alia that Airbus has its statutory seat in The Netherlands, Airbus argued that some combination of French, German and Spanish law might apply. This could have led to delay and unnecessary complications in the resolution of the litigation. In a decision dated 27 July 2022, the Dutch court found against Airbus, and has agreed with AIRL, on these points. The matter will proceed before the Dutch court, and Dutch law will apply. There will not be a reference to the ECJ and there is no reason to otherwise stay the proceedings. Airbus was not granted leave to appeal the decision. The Dutch court therefore will now address the merits of the matter with Airbus being required to make substantive submissions later this year. Steven Friel of Woodsford commented: “This is an important milestone in AIRL’s efforts to hold Airbus to account for the losses suffered by investors due to catastrophic breakdowns in ESG at Airbus. I hope that Airbus takes the decision of the Amsterdam court as a prompt to engage seriously with AIRL with a view to settling these proceedings. It is in the interests of all concerned that this unfortunate episode in Airbus’ corporate history is finally brought to an end.” About Woodsford Since 2010 Woodsford has been helping to hold corporates to account for their egregious behaviour. Whether it is helping consumers achieve collective redress, ensuring that inventors and universities are properly compensated when Big Tech infringes intellectual property rights, or helping shareholders in collaborative, escalated engagement up to and including litigation with listed companies, Woodsford is committed to ESG and access to justice. Working with most of the world’s leading law firms, our strength lies in the combination of our legal experience, investment, business and technical expertise, together with significant financial resources.
