Stretching the long arm of the law?
- Subtitle: Litigation and Arbitration
Two recent decisions suggest that Canadian courts are ever more inclined to assume jurisdiction over civil claims brought by foreign plaintiffs against Canadian multinationals operating abroad.
In Araya v. Nevsun Resources Ltd., a group of Eritrean refugees living in Ethiopia brought a claim for damages against Nevsun Resources Ltd., a British Columbia mining company. The plaintiffs claim that Nevsun, which had entered into a commercial relationship with the Eritrean government to develop the Bisha Mine, is ultimately responsible for the alleged forced labour, torture and cruel and inhuman treatment of workers by contractors and military personnel overseeing work at the mine. Nevsun applied to the B.C. court to decline jurisdiction on the ground of forum non conveniens, arguing that the case would most appropriately be tried in Eritrea — as opposed to Canada. The plaintiffs notably brought this claim under customary international law as incorporated in the laws of Canada.
The trial court dismissed Nevsun’s application and affirmed its jurisdiction, finding that Nevsun had not established that Eritrea was the more appropriate forum to fairly and efficiently try the case. In reaching its decision, the trial court weighed series of factors and significantly concluded that there was a real risk of an unfair trial in Eritrea, in light of systemic and procedural impediments and doubts surrounding the integrity of the Eritrean legal system.
In Garcia v. Tahoe Resources Inc., the British Columbia Court of Appeal adopted similar reasoning in a lawsuit brought by seven Guatemalan plaintiffs against Tahoe Resources Inc., also a B.C. mining company. In this case, the plaintiffs allege that they were protesting outside of Tahoe’s Escobal silver mine project in Guatemala when private security personnel shot them with buckshot and rubber bullets. The plaintiffs brought a civil action in damages against Tahoe, alleging that it was ultimately liable for their injuries. Tahoe petitioned the B.C. trial court to decline jurisdiction, arguing that Guatemala was the most appropriate forum to try the case.
The trial judge granted Tahoe’s forum non conveniens application and ordered a stay of proceedings, finding that Guatemala was a more appropriate forum, notably because: the plaintiffs reside in Guatemala; their alleged injuries and losses were suffered there; and the evidence was either in Guatemala or Nevada.
The trial judge concluded that Guatemala’s legal system was capable of providing justice and that the plaintiffs could obtain compensation either through a stand-alone civil suit or through criminal proceedings related to the same incident, which were already underway in Guatemala.
However, the B.C. Court of Appeal overturned the trial court’s decision and accepted jurisdiction over the claim. After admitting new evidence, the Court of Appeal decided that Guatemala was not the more appropriate forum. In support of its conclusion, the appellate court found that: (1) document discovery procedures in Guatemala were limited, complex and time-consuming; (2) the limitation period had long since expired in Guatemala; and that (3) there was a risk of an unfair trial against a multinational corporation in Guatemala, due to corruption and lack of independence in the justice system. The court concluded that the trial judge erred in finding that Tahoe had established that Guatemala was a more appropriate forum.
These decisions are significant precedents for Canadian multinationals operating abroad. They each reflect Canadian courts’ increasing inclination toward accepting jurisdiction over civil suits brought by foreign plaintiffs, who would otherwise be required to pursue their claims in a deficient, corrupt or unfair foreign judicial system. As these cases proceed toward hearings on their merits, the implications for Canadian multinationals operating abroad — especially in countries with weak human rights records or where there is no independent rule of law — could be widespread.
Sean Griffin and Daniel Baum are with Langlois lawyers in Montreal.
Published in Issue Archive