By guest contributors, Priya Garg* and Krati Gupta**


Consequent to an arduous legal battle spanning over more than fifteen years, the Supreme Court of the United States of America (“SCOTUS/Supreme Court”) on June 17, 2021, reversed the ruling of the U.S. Court of Appeals in Nestle USA Inc. v. Doe et al. (together with Cargill, Inc. v. Doe) (“Nestle”) that allowed the respondents, a group of Mali citizens to implicate U.S.-based multinational food corporations, Nestle USA and Cargill for child slavery allegations under the Alien Tort Statute (“ATS”).  Enacted as a part of the Judiciary Act of 1789, the ATS confers jurisdiction upon the federal courts of U.S. to hear lawsuits filed by non-U.S. citizens for tortious violations of customary international law or a treaty of the United States. The claimants in Nestle were a group of Malian citizens who brought about claims under the ATS that they were trafficked to the Ivory Coast and tortured to work as child slaves in cocoa farms. Though these farms were not owned or operated by U.S.-based corporations, it was alleged that the corporations provided these farms with technical and financial assistance. Since the headquarters of the companies were located in the U.S. and general corporate decision-making occurred within the territory of the U.S., the claimants alleged that such conduct aided and abetted child slavery.

The case presented the third instance after the Kiobel et al. v. Royal Dutch Petroleum Co. (Kiobel) and Jesner et al. v. Arab Bank, PLC  (“Jesner”), in which the question of corporate liability for international human rights violations under the ATS was before the Court. Similar to the previous instances, the Court while narrowing the ability of the plaintiffs to sue U.S. companies under the ATS, did not definitively settle the question of jurisdiction for lawsuits brought about by non-U.S. citizens against corporations headquartered in the U.S. The Court further refused to deter from the presumption of extraterritoriality in the statutory construction of the ATS.

This article seeks to examine the doctrine of presumption against extraterritoriality and the touch and concern test applied by the Supreme Court in Nestle. It argues that there is a pressing need to adopt a wider interpretation of the touch and concern test to incorporate operational decision-making in the United States within its gamut, given that the alleged conduct concerned violations of peremptory norms. Recent decisions of the highest courts of other common law jurisdictions, namely the United Kingdom and Canada have been discussed for persuasive reference. Further, the article provides legislative suggestions for incorporating the ethos of the United Nations General Principles on Business and Human Rights, 2011 to remedy the fallacies of this judgment and the loopholes of the ATS.

Presumption against Extraterritoriality: A Misplaced Approach

The primary question before SCOTUS in the Nestle case was whether a claim brought against a domestic corporation for aiding and abetting tortious conduct oversees overcomes the bar on extraterritoriality where the claim is based on allegations of general corporate activity carried in the territory of the United States. The majority decision penned down by Justice Clarence Thomas ruled in favour of the defendants, holding that the plaintiffs unjustifiably sought extraterritorial application of the ATS. A closer look at this decision bears testimony to the gradual narrowing down of the scope of ATS by US courts. In Kiobel, the Court held that the doctrine of statutory interpretation known as presumption against extraterritoriality is applicable to ATS and rejected a suit against two foreign corporations accused of abetting atrocities committed by Nigerian officials, on the premise that the alleged conduct did not “touch and concern the territory of the United States” (“touch and concern test”). Conclusively, the Court suggested that the presumption against extraterritoriality could be waived in ATS cases that meet the touch and concern test; however, the Court stopped short of specifying the conditions to be met for satisfying this test. More recently, in Jesner, the Court further constricted the extraterritorial application of ATS and held that foreign corporations were categorially shielded from suits under the said statute.

Against the backdrop of this constricting interpretation of the ATS, the plaintiffs stated that the application was fulfilled by the defendant corporations whose headquarters were located within the territory of the United States, where major corporate activity including unspecified financial decision-making (that led to tortious conduct oversees) is carried out.  Though the US Court of Appeals allowed the suit to proceed under the ATS, the Supreme Court reversed the said judgment for want of jurisdiction holding that resting the jurisdiction of such suit “on so thin a reed” as general corporate activity would open the floodgates of litigation for several oversees injuries that might discourage US firms from engaging in international activities and jeopardise US foreign policy.

Though the judgment does not bar similar ATS suits against domestic corporations in the future, it has considerably restricted the application of ATS to general corporate activity having substantial nexus with the territory of the U.S. beyond operational decision-making, thereby propounding a stricter application of the touch and concern test in favour of corporations. At a time when transnational human rights violations against Western corporations particularly those situated in the U.S. have gained widespread concern, the judgment in Nestle does little to aid accountability of corporates for oversees tortious conducts, which often evade law enforcement authorities for want of appropriate jurisdiction.

Transnational Human Rights and Corporate Accountability: Taking a Cue from other Common Law Jurisdictions

Nestle has been accused of grave human rights abuses in their cocoa plantations.

The United Nations Guiding Principles on Business and Human Rights, 2011 (“UNGPs”) are a set of composite directions to states as well as corporate entities on the issue of human rights and transnational corporations. In the past decade, following the adoption of the UNGPs, several common law jurisdictions inter alia Canada, the U.K., and some EU countries have been moving towards a stronger approach to ensure that business enterprises located within their jurisdiction respect human rights “throughout their operations” (Principle 2 of the UNGPs), thereby recognising the need for extraterritorial jurisdiction of domestic courts when the activities of domiciled corporations have transnational human rights implications. For instance, in Vedanta Resources PLC and Anr. v. Lungowe and Ors. (2019), the UK Supreme Court concluded that English courts could hear a claim for negligence and breach of statutory duty against a Zambian mining company and its English parent company, regarding its operations in Africa. Likewise, the recent judgment of the Supreme Court of Canada (“SCC”) in Nevsun Resources Ltd. v. Araya (2020) should also have been an instructive resource for the SCOTUS while deciding on the issue of extraterritorial application of ATS in Nestle.  In a laudable effort to develop mechanisms for transnational human rights accountability of multinational corporations, the SCC held that the harms suffered by the plaintiffs, in this case, forced labour and slavery, were violations of peremptory norms or jus cogens which command the highest sanctity in international law. Resultantly, the plaintiffs were allowed to pursue litigation for extraterritorial human rights violations by Canadian corporations.  In fact, not just the Nevsun decision, but also in other recent decisions (Bil’In (Village Council) v. Green Park International Inc. (2009), Choc v. Hudbay Minerals Inc. (2013), and Garcia v. Tahoe Resources Inc. (2017), it has been observed that the Canadian courts have allowed those suits to proceed to a trial that has pled intentional torts against Canada based parent companies for harms suffered by local inhabitants or workers overseas. The decisions of the top common law court of a country should hold persuasive authority in other common law jurisdictions. Therefore, in the opinion of the author, the SCOTUS should have expanded the applicability of ATS by adopting a wider interpretation of the touch and concern test to implicate corporations for transnational violations of peremptory norms (in this case, child labour and slavery) on the premise that major operational decision making occurred within the US territory.

Final Comments

Even though examples abound of the US companies either directly or indirectly abetting transnational human rights violations within their products’ supply chains particularly in Third World countries, the Supreme Court has increasingly closed the doors of federal courts as a forum for justice for abuses committed overseas. In such circumstances wherein the absence of express provision with regards to the extraterritorial applicability of ATS, has limited the scope of judicial interpretation within the bounds of statutory construction, it now behooves Congress to eliminate any ambiguity regarding the presumption against extraterritoriality by amending the ATS to make clear that it applies to transnational conduct particularly in cases of violations of peremptory norms. Further, there is an urgent need to adopt a human rights version of the Foreign Corrupt Practices Act (FCPA), similar to the mandatory human rights due diligence legislation being designed in the European Union in consonance with the ethos and spirit of the UNGPs.

Conclusively, it is pertinent to deliberate upon the urgent need to expand the scope of ATS, either through judicial decision-making process or legislative amendment, in order to effectively deter multinational corporations from escaping accountability for human rights violations occurring as implications of their corporate activities. In order to achieve this end, the steps anchored in the UNGPs are a beacon for the U.S. as well as other jurisdictions that still lack adequate legislation to enforce human rights due diligence upon the defaulting enterprises.


* Priya Garg is a founding trustee at We, the Humans ( and The Corporate House ( She is a faculty member at Jindal Global Law School, India

** Krati Gupta is a student research assistant at The Corporate House and is an undergraduate student at National Law University, Jodhpur (India).



“Scaling up cocoa supply” by Nestlé is licensed under CC BY-NC-SA 2.0


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