Was Shell even liable for the damage in Groningen?

On January 27, 2018, the Financieel Dagblad wrote that last year Shell withdrew its 403 declaration stating that Shell was jointly and severally liable for debts of NAM. NAM - probably well known - is the company that drills gas out of the ground in Groningen and therefore potentially (partly) responsible and liable for the damage resulting from the earthquakes. Outrage was expressed in the media by prominent criminal law specialists and even a civil law professor, among others. Is this anger actually justified?

Date: February 05, 2018

Modified November 14, 2023

Written by: Arjan Stuij

Reading time: +/- 2 minutes

On January 27, 2018, the Financieel Dagblad wrote that last year Shell withdrew its 403 declaration stating that Shell was jointly and severally liable for debts of NAM. NAM - probably well known - is the company that drills gas out of the ground in Groningen and therefore potentially (partly) responsible and liable for the damage resulting from the earthquakes. Outrage was expressed in the media by prominent criminal law specialists and even a civil law professor, among others. Is this anger actually justified?

In part it does. First of all, of course, it sends a signal to the aggrieved Groningers; it seems that as the tide is turning against NAM, Shell is pulling its hands out, and so the reaction of the aggrieved and the media is understandable.

Why some of that anger is unjustified lies in the nature of the 403 declaration. A 403 statement is issued by a parent company for debts arising from legal acts of the subsidiary. After the revocation of that 403 statement, the parent company is no longer responsible for new debts from the moment the statement is revoked, but in principle still for the old debts.

However, the 403 declaration does not cover wrongful acts of the subsidiary and let there be precisely that - in the case of the damage in Groningen. Shell was therefore not liable for the earthquake damage under the 403 statement anyway.

So is there really nothing wrong?

The devil - as always - is in the tail. I suspect that Shell has withdrawn its 403 declaration because of its foresight: after all, a damage protocol is being drawn up which determines how and to whom the damage will be attributed. The agreements that NAM and the State make about this are legal acts and Shell would be liable for these legal acts under the 403 statement (if it had not been withdrawn).

If the other shareholder in NAM - ExxonMobile - did not issue a 403 statement, upholding Shell's 403 statement would mean that only Shell would be liable for NAM's debts.

This seems a tactically smart move - by and for Shell - because NAM's figures show that NAM itself offers insufficient recourse to compensate all damage immediately and in full. This puts Shell in a negotiating position: it is expected (so it says in the media) to make an amount available for the damage, but has the ball in its hands as to the amount.

So the future will have to tell whether Shell keeps its word to still act as a guarantor and compensate "its" share of the damage. The State's intention to advance the Groningen damage and then redistribute it to the parties involved is noble, but also not entirely without risks.


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