The Anglo-Dutch oil firm, which abandoned its oil fields in Ogoniland in Nigeria's Niger Delta in 1993 due to protests, said it played no part in the violence and was providing the money as a "humanitarian gesture," Reuters reported.
The oil company had been charged with human rights abuses, including the 1995 hangings of activist Ken Saro-Wiwa and eight other protesters by the then-military government.
"We are still aggrieved with Shell. Paying compensation for the blood of these innocent people will not bring Shell back again to any part of Ogoniland for oil exploitation," said Veronica Kobani, whose husband was one of the nine killed, according to Reuters.
In 1970, a massive oil spill in Ogoniland inspired Saro-Wiwa, founder of the Movement for the Survival of the Ogoni People, to start a campaign against Shell's Nigerian onshore unit.
The nine protesters, who had campaigned non-violently for a fairer share of Nigeria's oil wealth and against environmental damages caused by oil production, had been convicted of murder in a trial that human rights groups called a sham, Reuters reported.
Plaintiffs said $5 million of the settlement would go to a trust for the Ogoni people and the rest for lawyer fees and the 10 plaintiffs who brought the case.
They sued under the Alien Tort Claims Act, a statute dating back to 1789 that allows foreigners to bring suit in U.S. courts for alleged violations of international laws. It has been used more often in the past few years for claims against major multinational corporations, said Ingrid Wuerth, a professor at Vanderbilt University Law School.
In the Nigeria case, the plaintiffs claimed Shell was complicit by working with or paying the government so the company could be held liable for some actions committed by the government, she explained.
The lawsuit was filed 13 years ago, and according to Paul Hoffman, the trial counsel for the plaintiffs, "The settlement prevented another four or five years of waiting [for appeals]. This is a fair way to resolve their claims and move on with their lives," the Wall Street Journal reported.
But some Ogonis said the settlement meant the community's grievances would not be fully aired.
"I believe that if the case had been heard in the open it would have helped resolve a lot of issues in the Niger Delta because what happened in Ogoni still remains a case study for the world today," said Ogoni activist Celestine Akpobari, quoted Reuters.