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Dr Huong defence against Royal Dutch Shell defamation action

It will soon be apparent to our readers from the extracts below, why Shell settled the Dr Huong litigation out of court. A very considerable pile of extremely smelly internal dirty laundry that Shell definitely did not want aired in open court, even in Malaysia.

By John Donovan

Dr John Huong, a former Shell geologist of almost 30 years standing was the FIRST SHELL employee to blow the whistle on the Shell reserves fraud (and other important issues relating to the misdeeds of Royal Dutch Shell management). He was not prepared to tolerate  the lives of Shell employees being recklessly put at risk.

As a result Shell was determined to silence him at all costs. Hence the unprecedented spectacle of EIGHT Royal Dutch Shell companies collectively bringing a defamation action against one former employee – an unemployed Malaysian who had no prospect whatsoever of finding alternative employment in his profession while the litigation cloud hung over the heads of himself and his family for several years.

Dr Huong made the mistake of believing in Shell’s STATEMENT OF GENERAL BUSINESS PRINCIPLES and in particular the pledges of “honesty, integrity, respect for people” in all of Shell’s dealings. He was also impressed by Shell’s philosophy in the claimed new ways of working, including the promotion of trust, openness, teamwork, professionalism and pride in what Shell does.  He did not realise until more recent years that all of the pledges and claims were purely hype and spin meant for use in global PR campaigns such as “Profits and Principles” i.e. for the consumption of gullible consumers and stakeholders.

Dr Huong filed a Defence containing a staggering array of allegations, facts and evidence directed against Royal Dutch Shell Group. It represented a devastating indictment of Shell by a conscience driven former Shell insider. If filed today, much more evidence could be included about Shell misdeeds, including its involvement in murder, torture, corruption, spying inside the Nigerian government and even spying on Shell’s own employees in association with a specialist unit partly funded and staffed by the FBI.

It will soon be apparent to our readers from the extracts below, why Shell settled the Dr Huong litigation out of court. A very considerable pile of extremely smelly internal dirty laundry that Shell definitely did not want aired in open court, even in Malaysia.

IN THE HIGH COURT OF MALAYA IN KUALA LUMPUR

(CIVIL DIVISION) SUIT NO.S2-23-41 OF 2004

BETWEEN

SARAWAK SHELL BHD. (71978-W)

SHELL MALAYSIA TRADING SENDIRIAN BERHAD (6078-M)

SHELL REFINING COMPANY (FEDERATION OF MALAYA) BHD. (3926-U)

SHELL TIMUR SDN. BHD. ( 113304-H)

SHELL EXPLORATION AND PRODUCTION MALAYSIA B.V. (993963-V)

SHELL OIL AND GAS (MALAYSIA) LLC (993830-X)

SHELL SABAH SELATAN SDN. BHD. (228504-T)

SABAH SHELL PETROLEUM COMPANY LTD. (993229-W)

In the event that the Alleged Defamatory Statements, in their natural and ordinary meaning, mean or are capable of conveying the meanings pleaded in paragraph 19 of the Statement of Claim and are found to refer to the Plaintiffs and/or the Shell Group, the Defendant avers that the Alleged Defamatory Statements are true in substance and fact.

23.1  Particulars the Defendant repeats the particulars pleaded in paragraph P6 above;

23.2  on 9.1.2004, the Shell Group disclosed to the public that in the period from 1997 to 2003,the Shell Group had deliberately and falsely made misleading statements by over declaring the quantities and/or values of their petroleum reserves. The Shell Group subsequently made 5 announcements on the devaluation of their petroleum reserves. The first announcement alone devalued the said petroleum reserves by at least 20%. As a result of the false and misleading declarations, the Shell Group was fined by the Securities & Exchange Commission in the United States of America and the Financial Services Authority in the United Kingdom (hereinafter referred to as “the Reserves Scandal”);

23.3  as a result of the Reserves Scandal, shares of the Shell Group being publicly traded dropped in value substantially, thus causing their shareholders to suffer very considerable losses;

23.4  shareholders of Royal Dutch Petroleum, a company within the Shell Group, in the United Kingdom are threatening legal action in regards to tax penalties arising from the unification of Shell Transport and Trading Company plc and Royal Dutch Shell, both companies within the Shell Group. This said unification was due to the restructuring of the Shell Group following the Reserves Scandal;

23.5 the Shell Group is faced with a continuing criminal investigation by the justice Department, United States of America into the actions of former and current members of the senior executives o f the Shell Group;

23.6  the Shell Group is faced with a public inquiry after the deaths of two workers in an accident on the Brent Bravo offshore platform in the United Kingdom, for which the Shell Group has already admitted liability and paid a record high fine;

23.7 the Shell Group has agreed to a proposal to pay a USD90 million settlement in respect of a class action lawsuit in relation to the Reserves Scandal, which was brought against the Shell Group by its own employees who were prejudiced by the materially false and misleading statements of the of the Shell Group on the reported proven oil and natural gas reserves;

23.8  on 31.8.2005, the Shell Group had announced a USD9.2 million dollar settlement of a shareholder derivative class action lawsuit in the United States of America, in relation to the Reserves Scandal. The lead plaintiffs therein are the Unite National Retirement Fund and the Plumbers and Pipefitters National Pension Fund. The action is against named individual defendants including current directors of the unified new company, Royal Dutch Shell plc – including its CEO Jeroen van der Veer, Executive Director Malcolm Brinded and Maarten van den Berg. The plaintiffs allege that the said persons acted in breach of their fiduciary duties owed to companies in the Shell Group, abused their control over the said companies, aided and abetted breaches by others, and/or committed gross mismanagement and/or constructive fraud;

23.9 the Shell Group is facing another class action in the United States of America in relation to securities fraud, which has been granted leave to proceed by a Federal Judge, who has made a finding that the She11 Group and certain named directors including Jerocn van der Veer have a case to answer for alleged securities fraud in relation to the Reserves Scandal. The lead plaintiffs are the Pennsylvania State Employee Retirement System and the Pennsylvania Public School Employees Retirement System;

23.10 the Shell Group is also facing another class action lawsuit in the United States of America for alien tort, where 14 individual plaintiffs therein are suing the Shell Group for violations of customary international law in relation the She11 Group’s petroleum producing operations in Ogoniland, Nigeria. The plaintiffs allege that the Shell Group engaged in militarised commerce in a conspiracy with the former Military Government of Nigeria and that the Shell Group knowingly instigated, planned, facilitated, and participated in unprovoked attacks by the Nigerian military against the unarmed residents of Ogoniland, resulting in extrajudicial murder, crimes against humanity, torture, rape, cruel, inhuman and degrading treatment, arbitrary arrest and detention, forced exile and the deliberate destruction of private property. The Shell Group had admitted after the leaking of an internal report that the corporate behaviour of the Shell Group in Nigeria fed a vicious cycle of violence and corruption;

23.11  the Shell Group is also facing a class action in the United States of America by 26 plaintiffs, mostly Dutch pension funds, in relation to the Reserves Scandal, where the plaintiffs therein are suing in respect of losses suffered as a result of the purchase of shares in the Shell Group at artificially inflated prices and the subsequent drop in value of their investments when it was discovered that the Shell Group had deliberately and falsely over declared the quantities and/or values of their petroleum reserves;

23.12  legal proceedings have been commenced against the Shell Group and its senior executives in the District Court for the District of New Jersey, the United States of America for remedies under the Security Exchange Act of 1934 in relation to the Reserves Scandal, where the plaintiffs complain that the She11 Group had violated federal securities law by issuing material misrepresentations on the quantities and/or values of their petroleum reserves and that the Shell Group had violated accounting rules and guidelines relating to the declaration of oil and gas reserves, resulting in a material over declaration of oil and gas reserves and causing its shareholders to suffer loss when the Reserves Scandal occurred and the value of publicly traded shares of the Shell Group fell;

23.13 the Shell Group is also facing various other lcgal proceedings in the United States of America in relation to the Reserves Scandal;

23.14  AE Donovan, JA Donovan and/or Don Marketing Limited had commenced court proceedings against the Shell Group companies operating in the United Kingdom by in respect of breaches of confidence and/or breaches of contract in respect of 4 marketing proposals forwarded by Don Marketing Limited to the Shell Group companies operating in the United Kingdom, which the Shell Group companies operating in the United Kingdom had made use of without the consent or knowledge of Don Marketing Limited. The Shell Group companies operating in the United Kingdom eventually settled the said 4 court proceedings brought by AE Donovan, JA Donovan and Don Marketing Limited by making payments of substantial sums in respect of the claims and costs;

23.15  in or around 1 994, AE Donovan, JA Donovan and Don Marketing Limited has commenced court proceedings against the Shell Group companies operating in the United Kingdom by in respect of the breach of the terns of a mediation agreement by the Shell Group companies operating in the United Kingdom. The Shell Group companies operating in the United Kingdom settled this court proceedings by making payments of substantia1 sums in respect of the claim and costs;

23.16   in or around 1994, AE Donovan had also sued the Shell: Group companies operating in the United Kingdom for libel, which suit was also settled by the Shell Group companies operating in the United Kingdom by making payments of substantial sums in respect of the claim and costs;

23.17 JA Donovan had also sued the Shell Group companies operating in the United Kingdom for libel, which suit was also settled by the Shell Group companies operating in the United Kingdom by making payments of substantial sums in respect of the claim and costs;

23.18 the Shell Group companies operating in the United Kingdom had admitted to hiring a private security firm which engaged in undercover activities against AE Donovan, JA Donovan and Don Marketing during the course of the litigation between the parties;

23.19 the Shell Group companies operating in the United Kingdom had admitted to hiring a private security firms which engaged in undercover activities against environmental groups active in the United Kingdom and in other countries;

23.20 the Shell Group had been fined a substantial sum by the United Nations when it was found that an oil tanker chartered by the Shell Group had violated the international trade embargo against Iraq by transporting petroleum which had originated from Iraq;

23.21 a prosecution that was brought by the Department of Justice of the United States of America against the Shell Group in respect of the Shell Group having repeatedly and deliberately under declared the value of natuml gas extracted in the Gulf of Mexico to avoid the payment of royalties, was settled by the She11 Group by making a substantial payment;

23.22 the Foundation for Taxpayer and Consumer Rights of Santa Monica of California, the United States of America has accused the Shell Group o f deliberately taking action to reduce its production of petroleum fuel products during periods of high demand so as to cause a shortage of fuel in California;

23.23  while the Shell:Group have at various times publicised that they operate and manage their businesses subject to their Statement of General Business Principles, the Shell Group has also subsequently denied that the said Statement of General Business Principles were intended to be enforceable against the Shell Group;

23.24 the Shell Group had settled class actions in British Columbia and Ontario, Canada in respect of damage suffered by vehicles which had used petrol sold by the Shell Group which contained an additive that caused the said damage;

23.25 the Shell Group faced a claim in Florida, the United States of America in respect of damage suffered by vehicles which had used petrel sold by the Shell Group which contained sulphur that caused the said damage;

23.26  in or about December 2002 in Nicaragua, the Shell Group was ordered by a court to pay substantial compensation to banana plantation workers who had suffered permanent and serious injury and/or disease and/or death as a result of being exposed to a pesticide which was sold by the Shell Group in Nicaragua subsequent to the banning of the said pesticide in the United States of America in 1979, with full knowledge that the said pesticide would cause permanent and serious injury and/or disease and/or death to persons exposed to it;

23.27  at various times, the Shell Group had caused and/or allowed petroleum producing and/or storage and/or transporting and/or processing and/or refining facilities,which are owned by the Shell Group and/or partly owned by the Shell Group, to cause wide spread pollution, resulting in damage to the environment and/or illness and disease to the local populations and/or destruction of property, in the following places:

23.27.1 Norco, Louisiana in the United States of America;

23.27.2 Port Arthur and Texas Deer Park, Texas in the United States of America

23.27.3 Rukpokwu and various petroleum production facilities in Nigeria;

23.27.4 Vila Carioca, San Paulo in Brazil;

23.27.5 Curacao;

23.27.6 Durban in South Africa;

23.28  at various times, the Shell Group, by their activities in petroleum-producing and/or storage and/or transporting and/or processing and/or refining facilities, which arc owned by the Shell Group and/or partly owned by the Shell Group, continued to put the local population at risk of damage to the environment and/or illness and disease and/or destruction of property, in the following places:

23.28.I    Pandacan, Manila in the Philippines;

23.28.2    Sakhalin IsIand in Russia.

In the alternative, the Defendant avers that the Alleged Defamatory Statements constitute fair comment on matters of public interest, namely that the Shell Group has been involved in numerous scandals and/or controversies and/or prosecutions worldwide, including the Reserves Scandal.

Particulars

24. 1  the Defendant repeats the particulars pleaded in paragraph 16 above;

24.2 the Defendant repeats the particulars pleaded in paragraph 23 above.

25. Paragraph 21 of the Statement of Claim is denied. The Defendant avers that by reason of the facts and matters pleaded in paragraphs 9 to 24 above, the Alleged Defamatory Statements have not caused any further damage and/or injury to the reputations of the Plaintiffs and/or the Shell Group.

26. Paragraph 22 of the Statement of Claim is denied. The Defendant avers that:

26.1    AE Donovan and JA Donovan had sole control over the contents of the said Website and had thc right to decide on the contributions that were to be posted on the said Website and also to edit any contribution received before posting the same on the said Website;

26.2    the Defendant did not publish the alleged posting on 16.6.2004 on the said Website or any other Internet website;

26.3    the alleged posting on 16.6.2004 was published by AE Donovan and/or JA Donovan on the said Website;

26.4    the alleged posting on 16.6.2004 was the result of AE Donovan an#or JA Donovan having edited and added their own comments to the correspondences between the Defendant and AE Donovan and/or JA Donovan, before posting the same onto the said Website;

26.5    the Defendant had absolutely no control over the contents of the alleged posting on 16.6.2004 on the said Website.

27.  Paragraph 23 of the Statement of Claim is denied. The Defendant avers that by reason of the facts and matters pleaded in paragraphs 9 to 24 above, the Alleged Defamatory Statements have not caused any further damage and/or injury to the reputations of the Plaintiffs and/or the Shell Group and have not Further caused the Plaintiffs and/or the Shell Group to be brought into any further public scandal, contempt nor odium.

28. Paragraph 24 of the Statement of Claim is denied. The Defendant repeats paragraph 26 and 27 above.

29. Paragraphs 25 to 29 of the Statement of Claim are denied. The Defendant avers that the Plaintiffs are not entitled to the remedies claimed therein.

30.  Save as hereinbefore expressly admitted, the Defendant denies each and every allegation of fact contained in the Statement of Claim as if the same were specifically set forth seriatim herein and specifically traversed.

Dated this 25th day of January 2006.

The above is a scanned copy, so there may be mistakes. The original can be viewed via this link.

COMPLETE DEFENCE DOCUMENT INCLUDING ABOVE INFORMATION

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