Court approves $110M settlement in BHP shareholder case

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In this judgment Moshinsky J approved a $110 million settlement in a shareholder class action against BHP Group Ltd arising from the collapse of the Fundão tailings dam in Brazil on 5 November 2015, which was entered into shortly before the trial of the proceeding was due to commence on 9 September 2025. The dam formed part of the Germano iron ore mine complex in Minas Gerais, Brazil, operated by Samarco Mineração SA—a 50:50 joint venture between BHP and Brazilian mining corporation Vale SA. The dam collapse killed 19 people and caused significant economic, social and environmental damage, leading to substantial falls in the price of both BHP Ltd and BHP plc shares (and leading to numerous civil and criminal proceedings in multiple jurisdictions).

In summary, the applicants (Mr Impiombato and Klemweb Nominees Pty Ltd) alleged in the proceeding that BHP failed to disclose material information regarding the safety and risks of the Fundão dam during the period August 2012 to November 2015, in contravention of section 674 of the Corporations Act 2001 (Cth). The applicants also alleged misleading or deceptive conduct contrary to section 1041H(1) of the Corporations Act and section 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth), by making representations to the market concerning BHP's commitment to safety and the safety of its operations, including at Samarco.

The proceeding was commenced in May 2018 and had a complex procedural history spanning over seven years. Key procedural events included:

• three competing proceedings commenced by Mr Impiombato, Klemweb Nominees Pty Ltd and the Los Angeles County Employees Retirement Association (LACERA), which led to a carriage motion at first instance (heard in October 2018), and appeals to the Full Federal Court (which resulted in consolidation of the Impiombato and Klemweb proceedings and a permanent stay of the LACERA proceeding;
• BHP's application for a temporary stay of the proceeding based on extant criminal proceedings in the Brazilian courts, which was dismissed;
• BHP's strike-out application which raised novel jurisdictional issues concerning the application of Part IVA of the Federal Court of Australia Act 1976 (Cth) to non-residents and BHP plc shareholders, which was ultimately dismissed by the High Court in October 2022; and
• competing applications concerning the scope of the group definition, and specifically whether it included persons who had acquired an interest in BHP Ltd or BHP plc shares in the relevant period through means other than trading on the ASX, LSE or JSE (and if not, whether the applicants should be permitted to amend the group definition retrospectively) – those applications also resulted in an appeal to the Full Federal Court, and an application for special leave to appeal to the High Court.

In addition, more than 250,000 documents were discovered in the proceeding (many of them in Portuguese which required translation).

Approximately 68,000 group members had registered to participate in the settlement, and there were no objections to the proposed settlement. Justice Moshinsky concluded (at [63]) that he was “comfortably satisfied that the settlement sum of $110 million is fair and reasonable and in the interests of group members”.

His Honour also approved deductions of $55 million from the settlement sum on account of legal costs, disbursements, and funding expenses. In light of the lengthy and complex procedural history summarised above, the actual amount payable in respect of legal costs, disbursements, and funding expenses was substantially more than $55 million, but the lawyers and funder agreed to reduce those amounts so as to ensure that at least 50% of the settlement sum would remain available for distribution to group members.

Impiombato v BHP Group Ltd (No 6) [2025] FCA 1594

Federal Court of Australia | Moshinsky J | 5 December 2025
Applicants’ Solicitors: Maurice Blackburn & Phi Finney McDonald
Respondents’ Solicitors: Herbert Smith Freehills
Applicants’ Funder: G&E KTMC Funding LLC

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