Renvoi: Lex Situs Conflictus

Canadian Conflict of Laws Blawg by Seva Batkin

Archive for the ‘forum selection’ Category

An Alternative Form of Exclusive Jurisdiction Clause

Posted by Seva on September 15, 2008

Solicitors, rejoice! Following the decision of Madam Justice Peppal in Blue Note Mining Inc. v. CanZinco Ltd. (Ont. S.C.), you now have an additional type of exclusive jurisdiction clause at your disposal. This clause, rather than forcing a party into a particular jurisdiction, prohibits a party from disputing jurisdiction of a particular forum, even as forum non conveniens.

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Manitoba and Muscutt and Forum Selection Clauses

Posted by Seva on May 22, 2008

The first decision that came to my attention from the Manitoba Court of Queen’s Bench in Commonwealth Insurance Company v. American Home Assurance Company, 2008 MBQB 112. The case involved a primary liability insurer suing excess liability insurers for contribution to the legal costs incurred in defending an insured. Coromin, one of the defendant excess liability insurers disputed the Manitoba court’s jurisdiction to hear the case because of an existence of a forum selection clause, lack of jurisdiction simpliciter and forum non conveniens.

There are three somewhat interesting aspects of this decision.

First, relying on an earlier MBCA decision in Ward v. Canada (Attorney General), 2007 MBCA 123, this decision clearly shows that Manitoba courts have also adopted Muscutt v. Courcelles and the 8 factors enunciated therein as a standard for real and substantial connection. Thus, Manitoba joins the provinces that have not adopted the ULCC’s Court Jurisdiction and Proceedings Transfer and that prefer the broad Ontario approach to RaSC to the more narrow B.C. approach.

Second, I found quite interesting Scurfield J.’s remarks about forum selection clauses. In particular, it appears that his conclusion that a forum selection clause as a “threshold factor” to be considered under the heading of forum non conveniens contradicts the SCC’s conclusion in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, where Mr. Justice Bastarache, at ¶21, held that the issue of a forum selection clause and forum non conveniens warrant separate approaches:

21  There is a similarity between the factors which are to be taken into account when considering an application for a stay based on a forum selection clause and those factors which are weighed by a court considering whether to stay proceedings in “ordinary” cases applying the forum non conveniens doctrine: …. I am not convinced that a unified approach to forum non conveniens, where a choice of jurisdiction clause constitutes but one factor to be considered, is preferable.  As Peel, supra, notes, at p. 190, I fear that such an approach would not ensure that full weight is given to the jurisdiction clause since not only should the clause itself be taken into account, but also the effect which it has on the factors which are relevant to the determination of the natural forum.  Factors which may otherwise be decisive may be less so if one takes into account that the parties agreed in advance to a hearing in a particular forum and must be deemed to have done so fully aware of the consequences which that might have on, for example, the transportation of witnesses and evidence, or compliance with foreign procedure etc. In my view, a separate approach to applications for a stay of proceedings involving forum selection clauses in bills of lading ensures that these considerations are properly taken into account and that the parties’ agreement is given effect in all but exceptional circumstances.  …                             [Emphasis added]

Admittedly, the ultimate effect of Scurfield J.’s conclusion is likely negligeble as he acknowledged that because “such clauses are frequently dispositive of jurisdictional issues” they must be dealt with before the questions of jurisdiction simpliciter or forum non conveniens. Thus, for all practical purposes, a forum selection clause is still considered separately from the broader issue of forum non conveniens.

Finally, a third point which I found interesting albeit not very novel was Scurfield J.’s conclusion that a particular legal rule, which exists in only one of the argued jurisdictions, and which recognizes the plaintiff’s claim, constitutes a valid juridical advantage to be considered by the court in deciding whether that jurisdiction is forum conveniens:

113       Generally, a plaintiff is entitled to any juridical advantage that flows from a jurisdiction that is otherwise appropriately selected:  Ward.  In the result, the question of juridical advantage is one that either favours the plaintiff’s choice of forum or is neutral.

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Retroactive Jurisdictional Rules and Inter-jurisdictional Trusts

Posted by Seva on April 18, 2008

As the title says, the recent decision of BCSC in Rakunas v. SAL, 2008 BCSC 444, briefly addresses both of the above issues. The case concerned an alleged trust, in which the defendant British Virgin Islands corporation, extra-provincially registered in BC, was alleged to be a bare trustee holding a property in Whistler in trust for its shareholders, the plaintiff, and the personal defendant Murphy, neither of whom were resident in BC Rakunas and Murphy were the sole and equal shareholders in SAL, as well as its officers and directors. Rakunas launched the action in 2005, seeking to wind up the alleged trust and sell of the property. Murphy argued that the court lacked jurisdiction simpliciter and that BC was forum non conveniens because the dispute was ultimately a shareholder dispute within a BVI corporation and had nothing to do with BC. SAL entered a response, but did not file any pleadings.

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Exclusive and Concurrent Jurisdiction Clauses

Posted by Seva on March 17, 2008

The question of the day is when does a forum selection clause in a contract really provide for exclusive jurisdiction of a court? Especially if it does not say “exclusive” (although even if it does that may not be the end of it)? A recent decision of Mr. Justice McEwan in B. A. Blacktop Ltd. v. Gencor Industries Inc., 2008 BCSC 231 reinforces the argument that exclusive jurisdiction can arise without an exclusive label.

On the one hand…

In a 1999 case Old North State Brewing Co. v. Newlands Services Inc., the BCCA found that the following clause did not cause the parties to attorn to the exclusive jurisdiction of B.C. court:

This Agreement will be governed by and interpreted in accordance with the laws of the Province of British Columbia, Canada and the parties will attorn to the jurisdiction of the Courts of the Province of British Columbia, Canada.

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