Tag Archive for: private international law

Ontario Court Enforces American Judgments Against Iran

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Under the State Immunity Act, foreign states are generally immune from being sued in Canada.  This includes being sued on a foreign judgment.  However, in 2012 Canada enacted legislation to give victims of terrorism the ability to sue a foreign state that sponsored the terrorism.  It also made it easier for foreign judgments against such a state to be enforced in Canada.

In Tracy v The Iranian Ministry of Information and Security, 2016 ONSC 3759 (released June 9, 2016; likely to be posted in the week of June 13, 2016, in CanLII) the Ontario Superior Court of Justice had to consider these legislative reforms and how they applied to a series of American judgments rendered against Iran in favour of American victims of terrorist acts which Iran was found to have sponsored.  The court held that Iran was not immune from the enforcement proceedings and that accordingly the American judgments were enforceable against certain assets of Iran in Ontario.

The decision is reasonably detailed.  It involves interpretation of the State Immunity Act and the Justice for Victims of Terrorism Act.  It also considers issues relating to the limitation period and the enforcement of punitive damages awards (in this case, in the hundreds of millions of dollars).  Not all of the analysis resonates as convincing and there is considerable scope for a possible appeal.  For example, Iran’s argument that the loss or damage suffered by the victim had to have been, on the language of s 4(1) of the JVTA, suffered after January 1, 1985, did not prevent the enforcement of American decisions in respect of acts of terror which happened before that date because, the court held, the victims continued to suffer harm on an ongoing basis.  This seems vulnerable to challenge.  In addition, the court’s reasoning as to why the enormous punitive damages awards were not contrary to public policy is extremely brief.

However, on any appeal, Iran does have a significant procedural problem to overcome.  It did not defend the enforcement actions when they were initially brought in Ontario.  All of the immunity arguments were canvassed by the court as part of Iran’s motion to have the resulting default judgments set aside, on the issue of whether Iran might have a viable defence on the merits.  But at no point did Iran offer any explanation for the initial failure to defend.  While not conclusive, this weighs against setting the judgments aside even if Iran can show merit to its position on immunity.

The timing of the court’s decision against Iran could pose challenges for the current Canadian government, which is currently working to re-engage with Iran after the previous government cut ties in 2012 (see news story here).  In addition, a Montreal-based professor has recently been jailed in Iran and this has caused considerable concern in Canada (see news story here).

Video From 2015 Journal of Private International Law Conference

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As many will know, in September 2015 the University of Cambridge hosted the Journal of Private International Law Conference (see here).  Video of the four plenary sessions has now been uploaded to YouTube.  The videos can be accessed through these links: first plenary, second plenary, third plenary, fourth plenary.

No Independent Jurisdiction Requirement for Proceeding to Enforce a Foreign Judgment in Canada

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The Supreme Court of Canada has released its decision in Chevron Corp v Yaiguaje (available here).  The issue before the court was whether the Ontario courts have jurisdiction to recognize and enforce an Ecuadorian judgment (for over $US 18 billion) where the foreign judgment debtor Chevron Corporation (“Chevron”) claims to have no connection with the province, whether through assets or otherwise.  On one view, because the process for enforcing a foreign judgment is to commence a new domestic proceeding and thereby sue on the foreign judgment, the enforcement proceeding must have its own independent analysis of jurisdiction.  Put another way, there cannot be a proceeding in respect of which the court does not have to have jurisdiction.  On a different view, because the analysis of the claim on the foreign judgment considers, among other things, the sufficiency of the rendering court’s jurisdiction (Chevron defended on the merits in Ecuador), that is the only required analysis of jurisdiction and there is no need for a separate consideration of the enforcing court’s jurisdiction.  The Supreme Court of Canada, agreeing with the Court of Appeal for Ontario, has held that the latter view is correct.

In summarizing its conclusion (para 3) the court stated “In an action to recognize and enforce a foreign judgment where the foreign court validly assumed jurisdiction, there is no need to prove that a real and substantial connection exists between the enforcing forum and either the judgment debtor or the dispute.  It makes little sense to compel such a connection when, owing to the nature of the action itself, it will frequently be lacking. Nor is it necessary, in order for the action to proceed, that the foreign debtor contemporaneously possess assets in the enforcing forum.  Jurisdiction to recognize and enforce a foreign judgment within Ontario exists by virtue of the debtor being served on the basis of the outstanding debt resulting from the judgment.”

While the court does not say that NO jurisdictional basis is required, it states that the basis is found simply and wholly in the defendant being served with process (see para 27).  This runs counter to the court’s foundational decision in Morguard Investments Ltd v De Savoye, [1990] 3 SCR 1077 which separated the issue of service of process – a pure procedural requirement – from the issue of jurisdiction.  To say the service itself founds jurisdiction is arguably to have no jurisdictional requirement at all.

Interestingly, a recent paper (subsequent to the argument before the court) by Professor Linda Silberman and Research Fellow Aaron Simowitz of New York University (available here) considers the same issue in American law and concludes that the dominant view of courts there remains that an action to enforce a foreign judgment requires a “jurisdictional nexus” with the enforcing forum.  They note that only a minority of countries allow enforcement of a foreign judgment without any jurisdictional threshold for the enforcement proceedings.  They argue that the New York decisions which subsequently are relied on by the Supreme Court of Canada (para 61) are the outliers.

Had the Supreme Court of Canada required a showing of jurisdiction in respect of the enforcement proceeding, it would have had to address how that requirement would be met.  Of course, in most cases it would be easily met by the defendant having assets in the jurisdiction.  The plaintiff would not have to prove that such assets were present: a good arguable case to that effect would ground jurisdiction.  Evidence that assets might, in the future, be brought into the jurisdiction could also suffice.

While the court is correct to note that the considerations in defending the underlying substantive claims are different from those involved in defending enforcement proceedings (para 48), the latter nonetheless allow reasonable scope for defences to be raised, such as fraud, denial of natural justice or contravention of public policy.  With no threshold jurisdiction requirement, judgment debtor defendants will now be required to advance and establish those defences in a forum that may have no connection at all with them or the judgment.

The enforcement proceedings were also brought against Chevron Canada, an indirect subsidiary of Chevron that does have a presence in Ontario, although it is not a named defendant in the Ecuadorian judgment.  The Supreme Court of Canada held that the Ontario court had jurisdiction over Chevron Canada based on its presence, with no need to consider any other possible basis for jurisdiction.  The decision is thus important for confirming the ongoing validity of presence-based jurisdiction (see paras 81-87).

On a pragmatic level, eliminating an analysis of the enforcing court’s jurisdiction may simplify the overall analysis, but hardly by much.  The court notes (para 77) that ” Establishing jurisdiction merely means that the alleged debt merits the assistance and attention of the Ontario courts.  Once the parties move past the jurisdictional phase, it may still be open to the defendant to argue any or all of the following, whether by way of preliminary motions or at trial: that the proper use of Ontario judicial resources justifies a stay under the circumstances; that the Ontario courts should decline to exercise jurisdiction on the basis of forum non conveniens; that any one of the available defences to recognition and enforcement (i.e. fraud, denial of natural justice, or public policy) should be accepted in the circumstances; or that a motion under either Rule 20 (summary judgment) or Rule 21 (determination of an issue before trial) of the Rules should be granted.”  And in respect of Chevron Canada (para 95), the “conclusion that the Ontario courts have jurisdiction in this case should not be understood to prejudice future arguments with respect to the distinct corporate personalities of Chevron and Chevron Canada.  [We] take no position on whether Chevron Canada can properly be considered a judgment-debtor to the Ecuadorian judgment.  Similarly, should the judgment be recognized and enforced against Chevron, it does not automatically follow that Chevron Canada’s shares or assets will be available to satisfy Chevron’s debt.”

Reminder: 2015 JPIL Conference at Cambridge: Booking Deadlines

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The 10th Anniversary of the Journal of Private International Law Conference is being held at the Faculty of Law, Cambridge University on 3-5 September 2015.  Booking for accommodation closes soon – on 15th July.  Booking for the conference and dinner will close on 13th August.

The conference offers an excellent opportunity to hear and discuss many issues currently facing private international law.

More information and registration is here.  A draft programme is available on the same web site.

Interlocutory Injunction Upheld Against Non-Party (Google Inc.)

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The British Columbia Court of Appeal has upheld an interlocutory injunction made against Google Inc., a non-party, in litigation between Equustek Solutions Inc. and Datalink Technologies Gateways Inc.  The decision is available here.

The plaintiffs alleged that the defendants had counterfeited their product.  In an effort to prevent the defendants from selling the counterfeit product, which was being done over the internet, the plaintiffs sought and obtained an interlocutory injunction against Google Inc., a Delaware corporation based in California, ordering it to exclude a list of certain web sites from search results.  The aim was to stop customers from finding the defendants.  Google Inc. appealed the injunction on several grounds.

The court concluded that it had in personam jurisdiction over Google Inc. because it conducted business in the province: it advertised to residents of British Columbia and it actively obtained data for use in its search engines in British Columbia.  It held that the fact that Google Inc. was a non-party did not prevent the making of the injunction as against it.  It also held that the fact that the injunction had extraterritorial effects, requiring Google Inc. to take steps outside British Columbia, was not a valid objection.  On these issues the court reviewed several leading United Kingdom cases, including The Siskina, Channel Tunnel Group and South Carolina Insurance.  It also commented favourably on the recent decision in Cartier International AG v British Sky Broadcasting Limited, [2014] EWHC 3354 (Ch.).  Key Canadian authorities relied on include MacMillan Bloedel, BMWE and Minera Aquiline Argentina.

The decision is likely to be important on the question of what it means to carry on business over the internet.

Journal of Private International Law 10th Anniversary Conference: 3-5 September 2015

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This conference, the next in a series that has featured Madrid (2013), Milan (2011), New York (2009), Birmingham (2007) and Aberdeen (2005), will be held in Cambridge, England at the University of Cambridge.  As in the past, it features a diverse line-up of exciting speakers on interesting topics.  All essential information can be found on the conference web site (http://www.pilconf15.law.cam.ac.uk/) which can be accessed here.  In particular, the program and additional essential information can be obtained.

Accommodation is in Harvey Court, Gonville & Caius College, West Road.  All rooms are ensuite and there are some doubles.  It is very close to the Law Faculty.  The conference dinner on Thursday evening is in Caius Old Hall.  Both accommodation and dinner can be booked via the same link.  The further information gives travel advice about coming to Cambridge.

The conference organizers are Richard Fentiman, Pippa Rogerson and Louise Merrett.  The conference is supported by the Centre for Corporate and Commercial Law (3CL).

Registration is now open and so you are encouraged to book.

A Court’s Inherent Jurisdiction to Sit Outside its Home Territory

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Another step in the evolution of the common law on this issue has been taken by the Court of Appeal for Ontario in Parsons v Ontario, 2015 ONCA 158 (available here).  The court disagrees in some respects with the earlier decision, on the same issue, of the British Columbia Court of Appeal in Endean v British Columbia, 2014 BCCA 61 (available here) (discussed by me over a year ago here).  It may be that in light of this conflict the Supreme Court of Canada will end up hearing appeals of either or both decisions.

People infected with the Hepatitis C virus by the Canadian blood supply between 1986 and 1990 initiated class actions in each of Ontario, Quebec and British Columbia.  These actions were settled under an agreement which provided for ongoing administration of the compensation process by a designated judge in each of the three provinces.  In 2012 the issue arose as to whether the period for advancing a claim to compensation could be extended.  Rather than having three separate motions in each of the provinces before each judge to address that issue, counsel for the class proposed a single hearing before the three judges, to take place in Alberta where all of them would happen to be on other judicial business.  In the face of objections to that process, motions were brought in each province to determine whether such an approach was possible.  The initial decision in each province was that a court could sit outside its home province.  The Quebec decision was not appealed but the other two were.

The Court of Appeal for Ontario has now released its decision on the appeal, and the three judges are quite divided.  They divide even over a preliminary issue, namely whether the order made below is “final” or “interlocutory” for purposes of the appeal route.  If it is the former, the appeal is properly brought to the Court of Appeal, but not if it is the latter (in which case the appeal would be to the Divisional Court).  The judges split 2-1 in deciding the order is final.

Turning to the merits, the judges remain divided.  Justice LaForme upholds the order below.  He concludes the court has the inherent jurisdiction to sit outside Ontario and that it can do so without violating the open court principle, even in the absence of a video link to an Ontario courtroom (for spectators and perhaps some lawyers).  Justice Lauwers agrees that the court has the inherent jurisdiction to sit outside Ontario, but that doing so without a video link back to Ontario would be a violation of the open court principle.  He reverses the order below, but only to the extent that he insists on such a link.  Justice Juriansz agrees with the result reached by Justice Lauwers but his reasoning is quite different.  He relies on Ontario’s Rules of Civil Procedure which allow for a motion to be heard by video-conference.  In his view, the proposed hearing outside of Ontario falls within these rules if there is a video link back to an Ontario courtroom.  No resort to inherent jurisdiction is required and the open court principle is not impaired.

I remain somewhat skeptical that the court has the jurisdiction to sit outside the province.  I would rather see such a process addressed by statute rather than through invocation of the court’s inherent powers.  I am also concerned that Justice Juriansz’s approach is something of a fiction, using the video-conference rules to in essence pretend that the hearing is actually being held in the courtroom to which the video feed is transmitted.  I consider such a video link essential, but for me it goes to the question of the open court principle and not to jurisdiction.

A side note: this is my first post in many months.  My sense, and that of many of my colleagues in Canada, is that we have had a dearth of interesting developments in private international law over the past year.

 

Not So Fast: Canadian Courts Cannot Sit Everywhere

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In an earlier post I discussed three first-instance decisions of Canadian courts, one from each of Ontario, British Columbia and Quebec, holding that the court could, at its discretion, sit outside the province.

Two of those decisions were appealed and one appeal has now been decided.  In Endean v British Columbia, 2014 BCCA 61 (available here) the Court of Appeal has reversed the lower court’s decision in British Columbia and called into question the other two lower court decisions.

The court held (at para 82) that “British Columbia judges cannot conduct hearings that take place outside the province. Such a major law reform is for the legislature to determine.”  The court did note that “There is, however, no objection to a judge who is not personally present in the province conducting a hearing that takes place in a British Columbia courtroom by telephone, video conference or other communication medium”.

The reasoning of the Court of Appeal echoes that in a comment written about the three first-instance decisions by Vaughan Black and Stephen G.A. Pitel entitled “Out of Bounds: Can a Court Sit Outside its Home Jurisdiction?” (currently available only through access to (2013) 41 Advocates’ Quarterly 503).

 

Private International Law in Commonwealth Africa

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Published this week is Private International Law in Commonwealth Africa (Cambridge University Press, 2013) by Prof. Richard Oppong of Thompson Rivers University. 

From the book’s website:

The book won the 2013 American Society of International Law prize in Private International Law.  The prize ‘recognizes exceptional work in private international law’.  The Secretary General of the Hague Conference on Private International Law, Dr. Christophe Bernasconi, observes in his foreword to the book that: ‘The publication of Private International Law in Commonwealth Africa marks a significant milestone in the history and development of private international law in Africa.  Its encyclopaedic analysis of fifteen national legal systems – which account for over 40 per cent of the continent’s population yet over 70 per cent of its economic output – will go a long way to filling a gap in knowledge in respect of this important region of the world’.

The book offers an unrivalled breadth of coverage in its comparative examination of the laws in Botswana, the Gambia, Ghana, Kenya, Lesotho, Malawi, Namibia, Nigeria, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.  The book draws on nearly 1500 cases decided by courts in these countries (the majority of which have never been cited in any academic work) and numerous national statutes.  It covers the areas of jurisdiction, choice of law, foreign judgments and arbitral awards enforcement, and international civil procedure.  It also provides an extensive bibliography of the literature on African private international law. 

Copies of the book may be obtained from many sources including the Cambridge UK and Amazon websites (link here).

Canadian Conferences with Conflicts Components

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Two Canadian conferences upcoming this autumn have sessions devoted to the conflict of laws.

The University of Windsor is hosting “Justice Beyond the State: Transnationalism and Law”  on September 20-21, 2013.   One session is entitled “Private International Law, Comity, Judicial Co-ordination” and another is entitled “Private International Law, the Foreign within the Domestic”.  Additional information is available here.

McGill University is hosting the 43rd Annual Workshop on Commercial and Consumer Law on October 11-12, 2013.  The closing session is entitled “International Jurisdiction after Club Resorts v. Van Breda“.  Additional information is available here.