US judge set to reject apartheid lawsuit

Lawyer Ed Fagan (right) has been sacked by his clients Keystone Archive

A United States judge looks set to throw out a class-action lawsuit brought by victims of apartheid against major multinationals, including Swiss banks.

Judge John Sprizzo said he could not see how doing business with South Africa’s apartheid regime was a breach of international law.

The litigation, filed on behalf of thousands of black South Africans, accuses more than 120 local and foreign firms of profiting from the apartheid system, which was abandoned in 1994.

Top Swiss banks UBS, Credit Suisse, and multinationals like Nestlé, Exxon Mobil, Novartis and General Motors, are among the companies named in the lawsuits.

During a four-hour hearing in New York, Sprizzo questioned plaintiffs’ lawyers as to whether they had evidence to support their allegations and if their legal arguments were valid.

“You have to plead some facts and I don’t think you have,” Sprizzo told Michael Osborne, a lawyer for the plaintiffs.

Judge unimpressed

The judge said he might throw out Osborne’s suit and allow him to file a more narrow one later.

Michael Hausfeld, a lawyer representing individuals and Khulumani, a South African organisation fighting for reparations for victims of human rights abuse, said his case was different.

He told Sprizzo that his complaint, unlike others, did not allege that doing business with South Africa was wrong.

Instead, he argued that his suit focused on banks, oil companies and car manufacturers, which he accuses of aiding military, security and police forces.

But Sprizzo questioned the validity of the suit’s claims. He said he might dismiss the case and allow an appeals court to decide on the issue.

South African fears

The South African government has urged Sprizzo to dismiss the lawsuits, arguing that the multibillion-dollar claims could hurt its economy.

In a letter to the court last July, the South African justice minister, Penuell Maduna, said that legal action would discourage much-needed investment in the country.

This was a view echoed by Nozipho January, the South African Ambassador to Bern: “Investors have indicated that if this class-action suit goes through, it would influence future foreign investment… and we have to listen to that comment.”

Earlier this week Ed Fagan, one of the lawyers representing plaintiffs, was dismissed by his clients.

Fagan is a controversial figure in Switzerland, where he is remembered for his role in winning a $1.25 billion settlement from Swiss banks over dormant Holocaust-era accounts.

swissinfo with agencies

In brief

A US judge has suggested he might dismiss litigation against a host of companies brought by apartheid victims.

Swiss banks like UBS and companies like Novartis are among the firms facing claims for millions of dollars.

UBS has said that its activities did not violate human rights in South Africa.

The South African government has asked the US court to drop the litigation, arguing that it could hurt investment in the country.