Arbitration/Jurisdiction Clauses in Maritime Law
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The database contains 48 case summaries relating to Arbitration/Jurisdiction Clauses in Maritime Law. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Bail - Arrest - Contractual Dispute Giving Rise to In Rem Remedy
Provincial Holdings Limited / Gestion Provincial Limitée v. Océan Nouveau-brunswick Inc., 2019 FC 1567
Précis: The Federal Court refused to set aside an arrest warrant and set bail for the arrested property, a floating dry dock.
Facts: In this motion the defendant sought to quash the arrest warrant, set aside the arrest and release the in rem defendant without bail, or alternatively set bail so as to secure its release. The plaintiff entered into a contract with the defendant for the construction of a floating dry dock on 24 October 2016. A third party was also party to the build contract. The contract called for the dock to be built at a shipyard located in New Brunswick operated by the defendant, to be worked on by New Brunswick workers and also contained an arbitration clause. Subject to some minor finishing work the dock was 95% complete and was about to be put in the water for sea trials. The defendant wanted to tow the dock to a place in Quebec where it proposed to carry out the finishing work after sea trials. The plaintiff contested that the work had to be completed by New Brunswick workers and could not be done outside of the New Brunswick shipyard save for any portion which was not “reasonably possible” to be performed there, all of which being reflected in the build contract and forming an integral part thereof. The plaintiff then filed in the Federal Court for the immediate possession of the dock and arrest of same. Specifically, the plaintiff sought a declaration of a right to some form or concept of possession in the dock pursuant to the build contract that allows it to require the dock remain at the New Brunswick yard for the completion of the finishing work. The defendant contested the remedy chosen by the plaintiff to sue and secure its claim.
Decision Motion granted in part; bail set at $260,000.00
Held: The Court limited its ruling on this motion to whether the arrest warrant should be quashed and whether this is an appropriate case to set bail as the principal dispute (ie. whether the finishing work was to be completed in New Brunswick) was to be determined by arbitration per the contract. The Court held that a breach of obligation in a contract, although personal, can be pursued in rem provided the court has jurisdiction to entertain the claim. Here, the jurisdiction stemmed from s. 22(2)(a) FCA. As this was not a motion to strike the in rem claim, the Court need not determine the merits of the plaintiff’s assertion to the possessory claim. The Court rejected the defendant’s argument that with 95% of the $12 million project already completed the plaintiff was “using a sledge hammer to kill a fly”, holding that it is entirely proper to use the procedural remedy of an arrest to secure its contractual rights regardless of the quantification of those rights. On the evidence before the Court there was no justification for setting aside the arrest without bail, and bail was therefore set at $260,000 to take into account interest and costs, including costs of arbitration.
Cargo - Multimodal - Leg - Ocean - Terminal - Germany
Iamgold Corporation v. Hapag-Lloyd Ag, 2019 FC 1514
Précis: The Federal Court found that a loss of cargo on the road leg of the carriage was subject to the limitation of liability applicable to road carriage under German law.
Summary not yet available.
Multi-Party Arbitration - Contracts of Design and Construction - SeaBus - Notice a Nullity
South Coast British Columbia Transportation Authority v. BMT Fleet Technology Ltd., 2018 BCCA 468
Précis: The British Columbia Court of Appeal held that multi-party arbitration relating to three marine design and construction contracts could not be commenced by a single notice to arbitrate.
Facts: South Coast British Columbia Transportation Authourity (“TransLink”) gave a notice to arbitrate pursuant to the Arbitration Act, R.S.B.C. 1996, c. 55 in April 2011, seeking to arbitrate four contracts under one arbitrator, without consent of the responding parties BMT Fleet Technology Ltd., International Marine Consultants Ltd., and Victoria Shipyards Ltd. The notice contained details of the alleged deficiencies in the performance of the contacts by the three companies. In this appeal only three of the contracts were in question, which related to the design and construction of TransLink’s SeaBus service. The three contracts each dealt with different aspects of the SeaBus’ design and construction, and each contract contained an arbitration clause under the B.C. Arbitration Act. The contracts stated that if no exception is made to the application of the Rules of the British Columbia International Commercial Arbitration Centre, then the parties have agreed to conduct arbitration under the Centre’s Rules. The TransLink-Victoria Shipyards contract differed from the other two in that it allowed for arbitration only under the agreement’s force majeure clause and specified arbitration before a three-person panel. In May 2011, the Centre wrote to TransLink informing them that three Notices to Arbitrate must be filed with the Centre, instead of only one, as there were three different contracts and none of which were related to each other. TransLink failed to file separate notices. TransLink filed a petition in the Supreme Court of British Columbia in August 2016 and in September 2017 obtained a declaration that arbitration was commenced in April 2011 and a single arbitrator was appointed. BMT and IMC appealed the BCSC Order, arguing in the Court of Appeal that the court below failed to notice s. 21 of the Arbitration Act which permits multi-party arbitration only if all parties agree to the appointment of one arbitrator and agree to steps taken to consolidate the disputes.
Decision: Appeal allowed, Order set aside.
Held:The Court of Appeal found that the essence of the arbitration clause is comprised of both consent and privacy. TransLink sought a different procedure than one contemplated by the contracts, the arbitration clauses and the Arbitration Act. The Court of Appeal found that the BCSC judge did not address s. 21 of the Arbitration Act in light of the facts at bar and whether consolidation without consent fundamentally changed the character of the arbitration from that which was contractually agreed. The Court of Appeal decided this case based on multi-party admiralty arbitration cases, notably the Eastern Saga  2 Lloyd’s Rep. 373 and the Smaro  1 Lloyd’s Rep. 225, to hold that arbitration may address only the contract giving rise to the dispute. TransLink’s notice called on the respondents to engage in arbitration before a single arbitrator which was not known to the Arbitration Act, and only under s. 21 of that act would TransLink have been able to commence the type of arbitration contemplated in its April 2011 notice.
Foreign Arbitration - Stay of Proceeding - Marine Cargo Insurance - Summary Judgment if Stay Refused
ATS Automation Tooling Systems Inc. v. Chubb Insurance Company of Canada, 2018 ONSC 6139
Précis: The Ontario Superior Court of Justice refused a motion to temporarily stay domestic proceedings where the same dispute was on-going and subject to final arbitral decision in India.
Facts: The plaintiffs ATS and IWK brought a motion to stay proceedings against Chubb Insurance pending an arbitration proceeding in India related to the claim. The claim arose after cargo shipped from Thailand to India by IWK and was found to be irreparably damaged upon arrival at the purchasers’ inland warehouse. The cargo was shipped by sea from Thailand to Chennai, India, and then inland by truck over 2,500km to Baddi, India, where the warehouse was located. The purchaser commenced arbitration in India for the damaged cargo stating that under the purchase and sale documents IWK was responsible for the cargo until it was delivered at the warehouse. ATS made a claim on the insurance policy and Chubb denied the claim on the basis that the damage occurred during inland transit, which was not covered by the policy. Chubb asserted that the CIF policy covered cargo damage occurring aboard the ship and until the goods were offloaded in India. ATS and IWK then brought an action against the defendant insurer in Ontario. The plaintiffs contended that the outcome of the India arbitration would determine the outcome of the Ontario action in terms of finding the goods were damaged prior to over-land shipment or that there was coverage for the entire journey. The defendant did not file a statement of defense in the Ontario action, instead opting for summary judgment motion to dismiss the claim. By judicial direction in November 2017, it was determined that the stay motion be scheduled first, and the summary judgment motion be scheduled if the stay was not granted.
Decision: Request for stay refused.
Held: The Court found that the outcome of the Foreign Arbitration, or the impact of that determination on the Ontario action, could be not be predicted. In the absence of no existing schedule for the arbitration hearing in India, or evidence to say there will be arbitration in India, it was clear the prejudice in delay would all be to Chubb, as having to wait for the outcome of the arbitration in which the insurer has no right of participation was akin to a denial of justice.
Moorage - Bylaws - Societies - Powerboats - Sail boats
Dauphinee v. White Rock Harbour Board, 2018 BCSC 1286
Précis: The BC Supreme Court upheld a bylaw of the harbour board and ordered an assignment of a powerboat slip to the plaintiff.
Facts: The plaintiff sought a petition declaring that the affairs of the respondent were being conducted in a manner oppressive or unfairly prejudicial to him, and, an order directing the Harbour Board to assign him a powerboat moorage slip in place of his sailboat moorage slip at the wharf operated by the Harbour Board. The defendant Harbour Board acts as agent for the City of White Rock in the operation of the Wharf. There are 33 slips at the defendant’s wharf, 4 of which are for powerboats only. The plaintiff was a member of the defendant harbour board and had been allotted a sailboat slip at the Wharf since 2003. In April 2017 the plaintiff submitted a request to the Harbour Board to assign him an available powerboat slip in place of his sailboat slip. Rule 16 of the defendant Harbour Board’s rules allowed an existing Harbour Board member with a minimum of five years occupation of a slip to sell their existing sailboat and purchase a powerboat or sell their existing power boat and purchase a sailboat and change their moorage designation accordingly. Such members who wish to do so would be placed at the head of the waitlist. The Harbour Board refused to assign the plaintiff a powerboat slip and did not want to uphold its own rule.
Decision: Order granted.
Held: Nothing in the agreement with the city, the constitution or the bylaws were inconsistent or prohibited the operation of rule 16. The rule was valid. It was not material what the past or future bylaws and rules would read, as the issue was the situation now and the year that has past since the plaintiff made his request for the slip. The judge found for the plaintiff that it is oppressive and unfairly prejudicial for the Harbour Board to refuse to implement a validly adopted rule.
Cancellation of Ferry Service - Jurisdiction Clause - Whether the Federal Court or Provincial Courts have Jurisdiction
Demers v. Marine Atlantic Inc., 2015 QCCQ 1793
Précis: The Quebec Small Claims Court refused to give effect to a jurisdiction clause in passenger ferry ticket in favour of the Federal Court.
Facts: The plaintiffs had purchased tickets on a ferry that was scheduled to leave from the Port of Argentia but was changed to Port aux Basques, both located in Newfoundland. The plaintiffs commenced this claim in the Quebec Small Claims Court alleging that they suffered additional expenses as a result of this change. The ticket contained a jurisdiction clause that provided the Federal Court in either Newfoundland or Nova Scotia was to have exclusive jurisdiction. The defendant sought to have the case dismissed on the basis of the jurisdiction clause.
Decision: Action dismissed.
Held: The Federal Court would not have jurisdiction to hear this dispute as the claim is based on the law of contract and there is no federal law to nourish the jurisdiction of the Federal Court. The parties cannot by agreement confer jurisdiction on the Federal Court. However, the courts of Quebec are also without jurisdiction pursuant to Art. 3148 of the Civil Code which provides the courts have no jurisdiction where the parties have agreed to refer the matter to a foreign court. The appropriate court to hear the dispute is the small claims court of either Newfoundland or Nova Scotia.
Comment: This decision is clearly wrongly decided. Although most of the reported cases involving carriage of passengers by sea are decisions of provincial superior courts, the law that is applied is, almost without exception, Canadian maritime law including, where applicable, the Athens Convention. Therefore, pursuant to s. 22(1) of the Federal Courts Act, the Federal Court would have concurrent jurisdiction. (Regrettably, as with many Quebec decisions, this decision is reported only in French and the summary is based upon a translation that may be imperfect.)
Booking Note - Charters - Arbitration Clause - Stay of Proceedings - Appeals - Standard of Review
Comtois International Exports Inc. v. Livestock Express BV, 2013 FC 1239 2014 FC 475
Précis: The court had no discretion to not enforce an arbitration clause in a charter party/booking note.
Facts: The defendant was the operator of the “Orient I”, a special livestock carrier. The plaintiff entered into a voyage charter of the vessel for a single voyage between Canada and Russia. The charter party was apparently contained in a booking note issued in Belgium. The booking note incorporated an arbitration clause in favour of London and a choice of law clause selecting English law. The booking note also contained an ice clause which gave the defendant the option of loading the cargo in St. John, New Brunswick if the port of Becancour, Quebec was not in ice free condition. The defendant in fact did sail to St. John because of forecasted ice conditions at Becancour. The loading of the cargo at St. John increased the plaintiff’s costs by $250,000. The plaintiff claimed this amount from the defendant alleging it had no right to change the port of loading to St. John. The defendant brought this motion for a stay of proceedings on the basis of the arbitration clause in the booking note.
At first instance (reported at 2013 FC 1239), the Prothonotary dismissed the motion for a stay of proceedings. The Prothonotary held that s. 46 of the Marine Liability Act did not apply as the contract between the parties was a charter party. However, he also held that the Court had discretion to grant a stay under s. 50 of the Federal Courts Act and that the plaintiff had discharged the heavy burden of establishing the existence of strong grounds for denying the stay on this basis. The Prothonotary noted that there was nothing linking this matter to England and that an arbitration in England would result in prohibitive costs for the plaintiff, a small company of 6 employees. The defendant appealed.
Decision: Appeal allowed.
Held: With respect to the standard of review applicable in this case, the refusal to grant a stay of proceedings is a discretionary order vital to the final issues in the case. Therefore the Court can proceed with a de novo review on this appeal.
The Prothonotary correctly held that s. 46 of the Marine Liability Act did not apply as the contract was a charter party and s. 46 does not apply to charter parties. However, the Prothonotary was in error when he held the Court had discretion to grant a stay under s. 50 of the Federal Courts Act. Article 8 of the Commercial Arbitration Code removes any discretion to grant a stay as was held by the Federal Court of Appeal in Nanisivik Mines Ltd v FCRS Shipping Ltd, 1994 CanLII 3466.
Jurisdiction Clauses - Stays of Proceedings - Forwarding Agents
DHL Global Forwarding (Canada) Inc. v. CMA-CGM S.A., 2013 FC 534
Précis: A jurisdiction clause in a bill of lading was enforced against the shipper’s agent.
The plaintiff issued bills of lading for 68 containers carried by the defendant from Halifax to Ho Chi Minh City. Upon the arrival in Vietnam, the containers were put into storage because the bills of lading had not been released by the plaintiff. Apparently the shipper had failed to pay the freight charges owing to the plaintiff. The defendant brought proceedings before the Tribunale de Commerce de Marseille against the plaintiff and consignee for demurrage and storage charges. After receiving notice of the French proceedings the plaintiff commenced these proceedings in the Federal Court for a declaration it was not liable for demurrage and storage charges. The defendant then brought this motion under s. 50 of the Federal Courts Act for a stay of the Federal Court proceedings on the grounds of a jurisdiction clause in the bills of lading in favour of the Marseille tribunal.
Decision: Motion granted.
Held: Although the plaintiff was acting as agent for the shipper, the terms of the bill of lading define “holder” as any person in possession of the bill of lading and define “Merchant” as including anyone acting on behalf of a shipper. Under these definitions the plaintiff was a “Holder” and a “Merchant” and is bound by the jurisdiction clause in the bills of lading.
Carriage of Goods - Arbitration Clause - Stay of Proceedings - Application of s.46 MLA to Charterparties
T. Co. Metals LLC v. The Federal Ems, 2011 FC 291 2012 FCA 284
A cargo of cold-rolled steel coils was carried from Brazil to Toronto pursuant to bills of lading that incorporated the terms and conditions of a voyage charterparty between the exporter and the time charterer of the vessel. Pursuant to the terms of the voyage charterparty, the exporter was to be responsible for the loading, stowing and discharging of the cargo. The voyage charterparty also contained an arbitration clause in favour of New York arbitration. At the time of the loading of the cargo there was a disagreement between the Master and the exporter as to whether the cargo should be covered with plastic sheeting. To resolve this disagreement, the exporter provided a letter of indemnity holding the Master and owners harmless for any damage due to the use of the plastic sheets. Upon arrival of the cargo at Toronto, there was damage to the cargo and the plaintiff/consignee commenced this action against the ship owner and time charterer. The owner and time charterer, in turn, commenced third party proceedings against the exporter. The exporter then brought an application to stay the third party proceedings relying upon the arbitration clause in the voyage charterparty. The owner and time charterer opposed the stay arguing that s. 46 of the Marine Liability Act applied and the third party proceedings were entitled to be brought in Canada. Additionally, they argued that the letter of indemnity was a separate contract not subject to the arbitration clause. Finally, the owner alleged it was not a party to the voyage charterparty and therefore not bound by the arbitration clause.
At first instance (2011 FC 291), the Prothonotary dismissed the motion. On appeal to a Judge (2011 FC 1067), the Appeal Judge allowed the appeal and stayed the proceedings. The main issue was whether s. 46 of the Marine Liability Act applies to charter parties. The Appeal Judge noted that the ordinary meaning of the expression “contract for the carriage of goods by water” in s. 46 could support the inclusion of charter parties. However, relying heavily on the fact that the Hague-Visby and Hamburg Rules excluded charter parties, the Appeal Judge concluded that s. 46 did not apply to charter parties. The Appeal Judge further held that the letter of indemnity was not a separate contract but an amendment of the voyage charterparty and therefore any claim under the letter of indemnity was caught by the arbitration clause in the voyage charterparty. The owner and time charterer appealed.
Decision: Appeal dismissed vis a vis the time charterer and allowed vis a vis the owner.
Held: When interpreting words in a statute the entire context and the purpose must be considered and not just the "plain meaning" of the words used. It is important to note that none of the international conventions relating to carriage of goods by sea apply to charter parties. The imbalance in bargaining power that led to the various international conventions does not exist in relation to charter parties where the traditional mode of resolving charter party disputes is arbitration. Section 46 of the Marine Liability Act was intended to address perceived unfairness resulting from the application of jurisdiction and arbitration clauses in bills of lading. In the context of legislation dealing with the rights and obligations of common carriers, the expression "contract of carriage" should not be understood to include charter parties. Moreover, there is no policy reason why charter party contracts between commercial entities dealing directly with one another should not be enforced. Further, the Appeal Judge’s conclusion that the letter of indemnity was an amendment to the charter-party is logical and supported by the evidence. However, the owner was not a party to the voyage charterparty and is not bound by the arbitration clause in that charterparty.
Note: An application to appeal to the Supreme Court of Canada was dismissed on 16 May 2013.
Stay of Proceedings - Arbitration Clause - Fraud - Res Judicata
New World Expedition Yachts LLC v. P.R. Yacht Builders, 2011 BCSC 78
In this action the plaintiff alleged that the defendant shipbuilders had engaged in a fraudulent scheme in relation to a ship building contract. The vessel was being built under a contract between the plaintiff/purchaser, NWEY, and the defendant/builder, PRYB. PRYB sub-contracted
the labour part of the build to a related company, FCY, also a defendant. Disputes arose during the course of the construction which were referred to arbitration and decided against the plaintiff in two arbitrations. The plaintiff first sought unsuccessfully to set aside the award on
the basis of bias of the arbitrator. When that was unsuccessful, the plaintiff brought this action for damages alleging fraud. The defendants moved to stay the action on the basis of the arbitration clause in the building contract and on the grounds that the issues were res judicata having already been decided in the arbitrations. The Court agreed with the defendants on both counts holding that the plaintiff was seeking to re-litigate matters that were or could have been decided in the arbitrations.
Practice - Carriage - Stay of Proceedings - Jurisdiction Clause - Federal Court Jurisdiction
Hitachi Maxco Ltd v. Dolphin Logistics Co., 2010 FC 853
This was a motion by the defendants for a stay of proceedings. The main issue was whether an admiralty action instituted in Canada in personam by two foreign corporations against four foreign corporations for the loss of cargo shipped from one foreign port and intended for discharge and delivery in another foreign jurisdiction should be stayed in favour of the jurisdiction stipulated in the bill of lading. The Court noted that there is no geographical limitation on the subject matter jurisdiction of the Federal Court and that it did not matter that the goods were not shipped from or to a Canadian port. The Court further noted that one may always institute an admiralty action in Federal Court that has absolutely no connection with Canada provided the defendants were served in Canada. The issue, the Court said, is whether it should maintain the jurisdiction or refer the matter to another court. The Court reviewed the authorities and the evidence and ultimately held that the defendants had not proven that there was a more convenient forum. The absence of evidence from the defendants was a significant factor in the decision.
Practice – Stay of Proceedings – Jurisdiction – Charter Dispute
McDermott Gulf Operating Company v. Oceanographia Sociedad Anonima de Capital Variable, 2010 NSSC 118
This was an application to stay proceedings commenced in the Nova Scotia Supreme Court on the basis that the court lacked jurisdiction simpliciter or was otherwise not the appropriate forum. The underlying claim by the plaintiff was for charter hire and other charges allegedly owed by the defendants. The first plaintiff was a Panamanian company and was the owner of the vessel which was registered in Barbados. The second plaintiff managed the charter party for the first plaintiff and was a Nova Scotia company. The defendants were resident in the United States or Mexico. The area of operations of the vessel that were the subject of the proceedings were entirely in Mexico. The Charterparty provided for Nova Scotia jurisdiction and Canadian law. The moving defendant was not the charterer under the Charterparty but it was the entity that obtained the benefit of the vessel and it appears that it had essentially assumed the obligations of the charterer. The Court first referred to the Nova Scotia Court Jurisdiction and Proceedings Transfer Act (“CJPTA”) which lists the circumstances where the court has jurisdiction. These include where there is an agreement on jurisdiction or where there is a real and substantial connection with the jurisdiction. The Court held that there was insufficient evidence of an agreement on jurisdiction given that the moving defendant was not a party to the Charterparty. The Court next considered whether there was a real and substantial connection with the province and noted that the CJPTA lists some of the factors to be taken into account when determining a real and substantial connection. The Court found that none of these factors were applicable but held that other factors may be taken into consideration including the connection of the parties to the jurisdiction, fairness, the involvement of other parties, comity and others. The Court reviewed these various factors and ultimately held that Nova Scotia did have jurisdiction. The Court further held that Mexico was not a more appropriate forum.
Carriage of Goods - Stay of Proceedings - s.46 M.L.A. – Jurisdiction Clause
Mitsui O.S.K. Lines Ltd. v. Mazda Canada Inc., 2008 FCA 219 2008 CanLII 63491
The Cougar Ace took on a list of 60 degrees while en route to Canada and the U.S.A. from Japan. As a consequence, a large number of automobiles destined for Canada and U.S.A. were damaged. All of the automobiles were subject to a contract of carriage that contained a jurisdiction clause in favour of Japan and a choice of law clause selecting Japanese law. This action was commenced by the Plaintiff to recover damages for those automobiles destined to be unloaded at Canadian Ports. A separate action was commenced in the U.S.A. in respect of the automobiles bound for U.S.A. ports but that action was dismissed based on the jurisdiction clause. Although the dismissal of the American action was under appeal, a separate action was commenced in Japan in respect of the U.S.A. bound automobiles. An action was also commenced in Japan in respect of some damaged trucks and the ship owner also commenced proceedings in Japan for a declaration of non-liability. The ship owner brought this application for an order enforcing the jurisdiction clause and for a stay of the Canadian proceedings. The Plaintiff argued, in reliance on s. 46 of the Marine Liability Act , that it was entitled to bring the action in Canada notwithstanding the jurisdiction clause. At first instance (2007 FC 916), the motions Judge noted that s. 46 permits certain actions to be brought in Canada notwithstanding a jurisdiction clause but does not override the court’s discretion to grant a stay of proceedings based on forum non conveniens factors. He then considered the various factors that are often considered and held that it had not been clearly established that Japan was a more appropriate forum than Canada. Factors that seemed to be of particular relevance to his decision included that Canada was the intended port of discharge, that the limitation amount would be higher in Canada and that the public policy behind s. 46 favoured Canada.
On appeal, the Federal Court of Appeal agreed with the motions Judge that jurisdiction clauses were no longer controlling but are now merely one of many factors to take into account in deciding the forum non conveniens issue. However, the Court of Appeal held that the motions Judge had made errors of law in his assessment of the various factors by undervaluing some and overvaluing others. Specifically, the court found that the motions Judge failed to attach sufficient weight to: the fact that there were three actions in Japan that were proceeding expeditiously; the fact that the residence of most witnesses would be Japan; the fact that applicable law was Japanese law; and, the fact of the jurisdiction clause in favour of Japan. The Court of Appeal also said it was unclear that greater damages would be available in Canada than in Japan and, in any event, suggested that this was not a reason justifying a refusal of a stay. The Court also said the motions Judge was wrong to reason that s. 46 evinced a policy in favour of Canada. In result, the appeal was allowed and the action was stayed. An application for leave to appeal to the Supreme Court of Canada was subsequently dismissed.
Carriage - Freight - set off - jurisdiction - Ciffa Terms
Locher Evers International v. Canada Garlic Distribution Inc. , 2008 FC 319
This was an action for the recovery of freight in relation to the carriage of produce from China to Toronto. The Defendant did not dispute the freight was owing but alleged a right to set-off and argued that the agreement ousted the jurisdiction of the Federal Court. The agreement between the parties expressly incorporated the Ciffa terms and those terms contained a no set-off clause which the Court had no difficulty enforcing. With respect to the jurisdiction issue, unfortunately, it is not clear from the judgment how this issue arose. There was apparently a jurisdiction clause but its contents are not set out. Nevertheless, the Court does say that the issue was raised too late.
Stay of Proceedings – Jurisdiction Clause – MLA s. 46
OT Africa Line Ltd. v. Magic Sportswear Corp., 2006 FCA 284
This was a subrogated action by cargo insurers for damages for the short shipment of goods carried from New York to Liberia under a bill of lading that was issued in Canada. The freight was also payable in Canada and the Defendant carrier, although not a Canadian resident, had offices in Canada. None of the Plaintiffs resided in Canada. The bill of lading contained a jurisdiction clause granting exclusive jurisdiction to the High Court of England. One month after the Plaintiff commenced this proceeding in the Federal Court of Canada, the Defendant commenced proceedings in England for a determination that it was not liable to the Plaintiff and it obtained an interim ex parte anti-suit injunction against the Plaintiff. This was later transformed into a regular anti-suit injunction (reported at  EWHC 2441) which was confirmed by the English Court of Appeal (reported at  EWCA Civ 710). A later petition to appeal to the House of Lords was dismissed. Meanwhile, the Defendant brought this application in the Federal Court of Canada to stay the Federal Court action on the basis of the jurisdiction clause in the bill of lading and on the basis of the doctrine of forum non conveniens.
At first instance, the Prothonotary dismissed the motion. The Prothonotary held that where the conditions of s. 46 of the Marine Liability Act were met the court had no discretion to stay proceedings on the basis of a jurisdiction or arbitration clause in a bill of lading. However, the Prothonotary also held that s. 46 did not prevent the court from granting a stay on the basis of forum non conveniens. The Prothonotary considered the relevant factors and held that Canada, not England, was the most convenient and appropriate forum in the circumstances. Accordingly, the Prothonotary dismissed the application for a stay.
The decision of the Prothonotary was appealed and the appeal is reported at 2004 FC 1165. The appeal Judge ultimately found that he was in agreement with the Prothonotary as to the effect of s. 46 of the Marine Liability Act and dismissed the appeal.
On further appeal to the Federal Court of Appeal, the Court of Appeal agreed with the lower courts that s. 46 of the Marine Liability Act did not require the Federal Court to take jurisdiction without regard to whether it was the more convenient forum. The Federal Court and Federal Court of Appeal still retained a broad jurisdiction to stay proceedings under s. 50(1) of the Federal Act. The Federal Court of Appeal, however, departed from the reasoning of the lower courts on the issue of whether the Orders and Judgments of the English courts were relevant to and should be included in a forum non conveniens analysis. The Court of Appeal considered that they were relevant and should be taken into account in the interests of international comity, to avoid parallel proceedings and to avoid inconsistent results. The Court of Appeal further held that the jurisdiction clause in the contract of carriage was a relevant factor to be taken into account in the forum non conveniens analysis noting that s. 46 did not declare such clauses to be null and void. The Court of Appeal then considered and weighed the various relevant factors and concluded that the factors connecting the dispute to Canada were relatively minor whereas those connecting it to England were much more significant. The Court of Appeal therefore concluded that English courts were a more convenient forum and granted the stay.
It is important to note that the Court of Appeal in this matter was particularly influenced by the facts that the Plaintiffs and the goods were not Canadian. At para. 88 of the Reasons, the Court of Appeal said in obiter that, when the Plaintiffs or the goods were Canadian, it was inclined to think that the jurisdiction clause and the assumption of jurisdiction by the English courts were factors that should be given no weight, as otherwise the policy of s. 46 would be frustrated.
Stay of Proceedings – Jurisdiction Clause – MLA s. 46
Sumisho Reftech Co. Ltd. v. The “Great Pride”, 2006 FC 388
This was an application to stay proceedings. The underlying matter concerned a contract for the carriage of goods from China to Japan and the parties to that contract were not Canadian residents. The only basis for bringing the action in Canada was that the Defendant COSCO had a Canadian office and the existence of this Canadian subsidiary gave the court jurisdiction under s. 46 of the Marine Liability Act. The Prothonotary granted the application for a stay subject only to COSCO's waiver of any time bar defence, which COSCO agreed to do. The Prothonotary refused, however, to order that the stay be conditional on Japan accepting jurisdiction, a condition requested by the Plaintiff.
Enforcement of Arbitration Award – Related Companies – Stay of Proceedings - Arbitration Clause
Pan Liberty Navigation Co. Ltd. v. World Link (HK) Resources Ltd., 2005 BCCA 206
In this matter the Plaintiff had obtained an arbitration award in London against a defaulting charterer under a charter party that required English law and arbitration. The Plaintiff commenced this action against the defaulting charterer to enforce the award but also included as Defendants various other corporate entities. The Plaintiff alleged that the corporate entities were one and the same and that their separate existence was a fraud. One of the entities, World Link (HK) was the charterer of the ship “Eirini” which had called at Vancouver. The Plaintiff obtained an ex parte Mareva Injunction against the ship's fuel and bunkers. The injunction was lifted when World Link (HK) paid the value of the fuel and bunkers into court. World Link (HK) then brought this application for a stay of proceedings. At first instance the stay was refused but on appeal to the Court of Appeal of British Columbia the stay was granted. The Court of Appeal held that the allegations of the Plaintiff fell squarely within the arbitration provision of the charter party because the real issue was whether World Link (HK), although not named in the charter party, was the defaulting charterer. These were matters that were properly to be heard and decided by the arbitrator according to English law. The Court of Appeal further indicated that it agreed with the approach taken by the English High Court in Norsk Hydro ASA v State Property Fund of Ukraine,  EWHC 2120, that when enforcing arbitration awards the enforcing court is neither entitled nor bound to go behind the award in question. (Note: This case should be compared with Trans-Pacific Shipping Co. v Atlantic & Orient Trust Co. Ltd. et al., 2005 FC 311.)
Jurisdiction Clause – MLA s.46 – Parallel Proceedings – Appeal from Prothonotary – Standard of Review
Ford Aquitaine Industries SAS et al. v. The “Canmar Pride” et al., 2005 FC 431
This action concerned the loss of or damage to several containers carried from LeHavre to Montreal. The damages were estimated at $6 million. The carriage was pursuant to a transportation services agreement which provided for American law and jurisdiction. The carrier under the transportation services agreement was OOCL but OOCL was expressly permitted to subcontract the carriage, which it did, to CP Ships. The Plaintiff originally commenced proceedings against only OOCL in a U.S. District Court. The Plaintiff attempted to discontinue those proceedings but was not allowed to do so. The Plaintiff also commenced this proceeding in the Federal Court against both OOCL and CP Ships. The Defendants brought this application to stay the Canadian proceedings. At first instance, the Prothonotary granted the application for a stay. He held that section 46 of the Marine Liability Act did not oust the court's jurisdiction under section 50 of the Federal Court Act to grant a stay on grounds other than a forum selection clause. He then applied the test from the decision of the British Columbia Court of Appeal in Westec Aerospace v Raytheon Aircraft Co., (1999) 173 DLR (4th) 498. That test was: 1) Are there parallel proceedings underway?; 2) If so, is the other jurisdiction an appropriate forum?; and, 3) Has the Plaintiff established by cogent evidence that there is some personal or juridical advantage available to him in the British Columbia action that is of such importance that it would be unjust to deprive him of it? The Prothonotary held that the Plaintiff had failed to meet the third element of that test. In this regard a main point argued by the Plaintiff was that a U.S. Court would apply the COGSA limit which was substantially lower than the limitation that would apply in a Canadian court applying the Hague-Visby Rules. The Prothonotary, however, considered that the issue of the applicable limitation would be argued in either court. On appeal, the appeal Judge first considered the appropriate standard of review from a discretionary order of a Prothonotary and noted that the test had been recently reformulated to require the reviewing judge to first determine whether the questions raised are vital to the final issue in the case. If so, the discretion should be exercised de novo and the reviewing judge need not consider the second branch of the test (whether the orders were clearly wrong). The appeal Judge considered the Prothonotary's decision final and thus proceeded to exercise her discretion de novo. The appeal Judge held that the Prothonotary had erred in applying the test from Westec. She considered that the Westec approach was incorrect in that it set up “loss of juridical advantage” as a separate test or step rather than weighing it with the other usual factors to be taken into account. Moreover, she considered that the objective was not just to determine if the foreign forum was equally appropriate to the domestic forum but whether it was more appropriate than the domestic forum. Nevertheless, weighing the relevant factors she concluded that the U.S District Court was a more appropriate forum and upheld the decision of the Prothonotary.
Stay of Proceedings – Arbitration Clause – MLA s. 46 – Charterparties – Bills of Lading and Incorporation of Charter Terms – Striking Claims
Dongnam Oil & Fats Co. v. Chemex Ltd. et al., 2004 FC 1732
This matter concerned damage to a cargo of bleached tallow to be carried from Newark, New Jersey to Inchon, Korea. The cargo was to be carried on board the ship “Tuapse”. The “Tuapse” was owned by Novoship but chartered under a head charter to Chemex. The head charter provided for London arbitration. The Plaintiff and Chemex entered into a voyage charter party which again called for London arbitration. The cargo was loaded at Newark and two bills of lading were issued which incorporated the voyage charter party. The cargo was carried on board the “Tuapse” to Nanaimo, British Columbia where it was transhipped to another vessel for carriage to Korea. The cargo was allegedly damaged during the transhipment. The Plaintiff subsequently commenced this proceeding and the Defendants Novoship and Chemex brought applications to stay the proceedings in favour of London arbitration. The Plaintiff argued that s. 46 of the Marine Liability Act applied making the arbitration provisions inapplicable. The Prothonotary disagreed ruling that a transhipment from one vessel to another was not loading or discharging at a Canadian port within the meaning of s. 46(1)(a). The Prothonotary further noted that section 46 should be interpreted strictly since it was a restriction on freedom to contract. The Prothonotary then considered whether the arbitration provisions were incorporated. With respect to the dispute between the Plaintiff and Chemex he found that there was clearly an arbitration provision in the voyage charter and therefore concluded that he had no alternative but to allow the stay. With respect to the dispute between the Plaintiff and Novoship, however, there was no direct contractual relationship between these two and therefore he had to consider the effect of the bills of lading. In this regard he noted that if the bills of lading had specifically referred to the arbitration provision, Novoship would be entitled to a stay. In addition, if the bills of lading incorporated the charter party terms and those terms provided that the arbitration provision applied to disputes under the bill of lading, then Novoship would be entitled to a stay. However, in this case the terms of the voyage charter party did not provide that the arbitration provision applied to disputes under the bill of lading and the bills of lading did not specifically refer to arbitration. Accordingly, Novoship was not entitled to a stay. Two subsidiary issues dealt with in these reasons concerned applications to strike out a claim for a declaration the Plaintiff did not owe dead freight and a claim for wrongful arrest. The claim for a declaration on the dead freight issue was struck on the grounds that the issue had been decided in an arbitration. The claim for wrongful arrest was struck on the grounds the Plaintiff was not the owner or in possession of the cargo at the time it was arrested.
Stay of Proceedings – Jurisdiction Clause – Bill of Lading
Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27
The Plaintiffs claimed that cargo carried from Belgium to Canada and then on to the US was damaged. The Appellant shipowner sought to rely on an exclusive jurisdiction clause in the bill of lading referring claims to the Courts of Belgium. The matter arose before s.46(1) of the Marine Liability Act came into force. The Prothonotary refused to uphold the jurisdiction clause on the basis that there had been an unauthorized deviation. The Prothonotary's decision was upheld by the Federal Court Trial Division and Federal Court of Appeal. Unusually, the test applied by the Federal Court of Appeal was the tripartite test normally used in relation to interlocutory injunctions rather than the test from the The “Eleftheria”,  1 Lloyd’s L.R.237. The Supreme Court of Canada held that the Court of Appeal had applied the wrong test and that the correct test was that set out in The “Eleftheria” which requires that “strong cause” must be shown before the court will refuse to enforce an agreed jurisdiction. The Supreme Court held that there were strong public policy considerations in favour of upholding the “strong cause” test as it created commercial certainty. The Supreme Court also rejected the finding that there had been a deviation that rendered the jurisdiction clause ineffective.