Investor–state arbitration — application to set aside NAFTA award — excess of jurisdiction

Attorney General of Canada v Mobil et al, 2016 ONSC 790 (16 February 2016). Ontario Superior Court of Justice.

This was an application by the Attorney General of Canada to set aside an arbitral award that the respondent oil investors obtained against Canada under Chapter 11 of the 1992 North American Free Trade Agreement (NAFTA). ^{Footnote 1} The respondents were investors in the Hibernia and Terra Nova offshore petroleum extraction projects. As such, they were subject, by the terms of a 1985 agreement between the federal government and Newfoundland known as the Atlantic Accord and implemented by statute in both jurisdictions, to “benefits plans” requiring expenditures for research and development, as well as education and training, in the province. The respondents alleged that this arrangement, and the “guidelines” issued in 2004 to give effect to it, were impermissible performance requirements contrary to Article 1106 of the NAFTA.

A majority of the three-person NAFTA arbitral tribunal agreed and awarded the respondents approximately $19 million in damages. The tribunal unanimously found that the guidelines constituted performance requirements, but it split on the issue of whether the guidelines fell within the scope of Canada’s reservation to Article 1106(1)(c) pursuant to Article 1108(1)(a). The majority held that the guidelines were inconsistent with the Atlantic Accord and the benefits plan and, thus, did not fall within the scope of Canada’s reservation. The dissenting panelist found that the only measure to be interpreted was the Atlantic Accord implementing law and that the guidelines were consistent with it and therefore within the scope of Canada’s reservation.

Toronto being the agreed-upon place of arbitration, Canada challenged the award before Conway J of the Ontario Superior Court of Justice. Canada argued that the tribunal had exceed its jurisdiction by using the wrong criteria (the Atlantic Accord and the benefits plans) for determining whether the guidelines fell within the scope of the reservation. This interpretive error was said by Canada to cause the tribunal to apply Article 1106(1)(c)’s obligations to Canada despite Canada’s reservation, thereby exceeding the tribunal’s jurisdiction.

Conway J rejected this argument. She began by considering the grounds on which a court may set aside an arbitral award pursuant to the federal Commercial Arbitration Act, ^{Footnote 2} which implements the UNCITRAL Model Law on International Commercial Arbitration (known in the Act as the Commercial Arbitration Code). Her Honour noted that Article 34 of the Code sets out the grounds on which a court may set aside an arbitral award, including if the applicant shows that the award deals with a dispute not falling within the terms of the submission to arbitration or contains decisions on maters beyond the scope of that submission (Article 34(2)(a)(iii)). Her Honour then applied the decision of the Court of Appeal for Ontario in United Mexican States v Cargill, Inc., ^{Footnote 3} in particular, that court’s holding that judicial intervention is permitted only in rare circumstances where there is a true question of jurisdiction. So guided, Conway J concluded that Canada had not raised a true jurisdictional issue but, rather, sought to challenge the merits of the tribunal’s decision. In particular, the tribunal was called upon to interpret the meaning of “the measure” in paragraph 2(f)(ii) of Annex I to determine the comparator against which to assess the guidelines, and Canada’s preference for the dissenting panelist’s interpretation did not “convert this into a matter of jurisdiction.” ^{Footnote 4}

Immunities of international organizations — World Bank Group — archives and personnel

World Bank Group v Wallace, 2016 SCC 15 (29 April 2016). Supreme Court of Canada.

Three former employees of SNC-Lavalin and another man were charged under Canada’s Corruption of Foreign Public Officials Act ^{Footnote 5} with conspiracy to bribe officials evaluating bids for a contract relating to the construction of a bridge in Bangladesh. Evidence in support of the allegations came in part from the Royal Canadian Mounted Police’s (RCMP) wiretaps authorized on the strength of information provided by the project’s main lender, the World Bank Group. At trial in Ontario, the respondents brought an application for document production against the World Bank Group’s Integrity Vice Presidency (INT), which the trial judge granted.

On direct appeal by leave to the Supreme Court of Canada, the production order was set aside. Moldaver and Côté JJ for the Court found the World Bank Group’s constitutive entities to be immune from the order sought under international and Canadian law. The relevant entities were the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), both of which are formed under treaties to which Canada is a party. ^{Footnote 6} There was no dispute that these treaties were implemented in relevant part in Canadian law by orders in council. ^{Footnote 7} At issue was the meaning and extent of the immunities enjoyed by the IBRD and the IDA under international law.

Both articles of agreement provide that the archives of the IBRD and the IDA shall be inviolable and that their employees shall be immune from legal process with respect to acts performed in their official capacity except where waived. ^{Footnote 8} The first question was whether the INT could rely on these provisions. The Court noted “a certain ambiguity regarding where the INT fits within the World Bank Group’s overall structure,” which it ascribed to “a dearth of evidence in the record.” ^{Footnote 9} Yet the Court was satisfied that the INT’s documents formed part of either the IBRD’s or the IDA’s archive and that the INT’s personnel benefit from either the IBRD’s or the IDA’s legal process immunity. ^{Footnote 10}

The trial judge had held that the two organizations’ archival immunity could not protect them from the production order sought by the respondents because the immunity granted in the treaties to the organizations’ archives referred only to historical documents or records. The trial judge also held that the word “inviolable” in the treaties only entailed protection from search and seizure orders, not from orders for production. Moldaver and Côté JJ reversed the trial judge on both points. To determine the scope of archival immunity, the learned judges surveyed the use of the term “archive” in the 1963 Vienna Convention on Consular Relations, ^{Footnote 11} the 1961 Vienna Convention on Diplomatic Relations, ^{Footnote 12} and other international sources and authorities. ^{Footnote 13} Similarly, the Court concluded that the term “inviolable” as used in international law “connotes a sweeping protection against any form of involuntary production.” ^{Footnote 14} The Court reached this conclusion upon review of international precedents including the 1919 Covenant of the League of Nations, ^{Footnote 15} the 1948 Convention on the Privileges and Immunities of the United Nations, ^{Footnote 16} the aforementioned Vienna Convention on Diplomatic Relations, and several international scholarly authorities. ^{Footnote 17}

The fact that the INT voluntarily disclosed some documents to the RCMP for the purpose of obtaining a wiretap did not amount to a waiver of its archival immunity. In fact, archival immunity is not subject to waiver, in part because a voluntary disclosure of documents is not a violation of the sanctity of the organizations’ archives and in part because once a document has been relinquished to a third party it no longer forms part of the archives. ^{Footnote 18}

The Court also rejected the respondents’ submission that two World Bank Group employees had waived their personnel immunity and were therefore compellable by the Ontario court. While the IBRD and the IDA agreements contemplate the waiver of personnel immunity, they must be interpreted to require express, and not implied or constructive, immunity. Moldaver and Côté JJ pointedly observed that

The trial judge therefore erred in finding that the World Bank Group had waived its immunity through an application of the Canadian common law doctrine of selective waiver, which, in the Court’s view, “should not inform the interpretation of an international treaty.” ^{Footnote 20}

World Bank Group is an illustration of how domestic courts may at times be called upon to determine a pure point of public international law. Since the immunities at issue were expressly implemented word for word in Canadian law, their scope and application fell to be determined according to international usage and principle. Moldaver and Côté JJ explained: “As is the case with implementing legislation, the Articles of Agreement of the IBRD and the IDA must be interpreted in accordance with the general rules of interpretation set out in the Vienna Convention on the Law of Treaties.” ^{Footnote 21} In such cases, the distinction between international and domestic law becomes more theoretical than practical.

Interprovincial labour mobility — Trade, Investment and Labour Mobility Agreement (TILMA) — application of reception law to non-international agreements

Lum v Alberta Dental Association and College (Review Panel), 2016 ABCA 154 (13 May 2016). Court of Appeal of Alberta.

The decision of the Alberta Court of Appeal in this appeal is not about public international law but is nevertheless notable for its application of Canadian reception law doctrines to a non-international agreement between Canadian provinces. A British Columbia dentist, Lum, applied for registration to practice in Alberta and was refused on the ground that he had not provided satisfactory evidence of good character and reputation as required by the applicable Alberta statute and regulation. Lum had twenty-two complaints against him during his ten years of BC practice, though none had resulted in a finding of professional misconduct. The registrar’s decision against Lum was upheld by a review panel of the Alberta Dental Association and a judicial review of that decision was dismissed.

On appeal, Lum attacked the decisions below on various grounds, including inconsistency with an interprovincial mobility agreement between British Columbia and Alberta known as TILMA (Trade, Investment and Labour Mobility Agreement). ^{Footnote 22} Article 13(1) of TILMA provides that “any worker certified for an occupation by a regulatory authority of a Party shall be recognized as qualified to practice that occupation by the other Party.” Lum contended that to give effect to this article, the Dental Association was required to accept his registration in British Columbia as prima facie evidence of good character and reputation. Lum’s argument relied in part on the decision of an investor-state-style arbitration panel that effectively interpreted Article 13 of TILMA as creating a reverse onus on the incoming jurisdiction to prove the applicant lacks good character and reputation before declining to register her and observed that applicants already registered in one TILMA jurisdiction should only be denied registration on character grounds in exceptional circumstances. ^{Footnote 23}

The Court of Appeal dismissed Lum’s appeal in a judgment attributed to the court as a whole. On the reception of TILMA in Alberta law, the court applied what it identified as “Treaty Principles” without any express consideration of the relevance or applicability of such principles to a non-international agreement. The court began this discussion by affirming the presumption of conformity in these terms: “[I]t is presumed that a government will not violate its international agreements; therefore a treaty to which Alberta is a party can be used to interpret other legislation in Alberta. If there is more than one possible interpretation of a statute, the interpretation that complies with treaty obligations is preferred.” ^{Footnote 24} Next the court identified three relevant “principles of treaty law.” The first was that “a treaty is not law unless enacted by legislation” (the implementation requirement). ^{Footnote 25} There being no TILMA in Alberta (there is one in British Columbia ^{Footnote 26} ), the court concluded that TILMA is not law. The second principle was that “only states can enforce state rights.” From this, the court concluded that Lum has no right to enforce TILMA; if the Dental Association breached it, British Columbia must seek a remedy. ^{Footnote 27} The third principle was that “a treaty can be used as an interpretive guide for domestic legislation, and that legislatures intend to comply with international obligations.” ^{Footnote 28}

To this unobjectionable statement, the court unfortunately grafted the ambiguity requirement rejected by the Supreme Court of Canada long ago, ^{Footnote 29} saying “[f]or the appellant’s argument to succeed there must be an ambiguity in the Act or the Regulation.” ^{Footnote 30} Finding no such ambiguity in the relevant regulation, the court concluded that this supposed first requirement of the presumption of conformity was not met. The court went on to observe that TILMA is not implemented in Alberta law and that, in those circumstances, the court’s “role is not to amend legislation by reading a reverse onus when the onus is clearly stated in the legislation.” ^{Footnote 31} Rather than imposing the rejected ambiguity requirement as the first step in determining whether to apply the presumption of conformity, the court might have held that the presumption was rebutted on this basis (particularly given the uncertainty of TILMA itself on this point).

What is interesting about this decision, and what may prove important in future, is its application (however flawed) of the presumption of conformity with international law in respect of a non-international agreement concluded by a province. In the court’s words, “[t]his principle likely applies to inter-provincial agreements and Alberta should be presumed to be in compliance with its obligations to other provinces.” ^{Footnote 32}

State immunity — terrorism exception — execution of judgments against foreign state property

Tracy v Iranian Ministry of Information and Security, 2016 ONSC 3759 (9 June 2016). Ontario Superior Court of Justice.

The plaintiffs held twelve judgments in the United States against the Islamic Republic of Iran and two of its state organs in respect of eight terrorist attacks that Iran was found to have supported in actions under the state-sponsored terrorism exception to state immunity in the US Foreign Sovereign Immunities Act of 1976. ^{Footnote 33} They came to Ontario seeking recognition and enforcement of their judgments there and obtained default judgments. Iran now moved to set aside those default judgments primarily on the ground of state immunity. Against this position the plaintiffs advanced section 6.1 of Canada’s State Immunity Act, ^{Footnote 34} which creates an exception to immunity claims for specified state sponsors of terrorism, including Iran. The plaintiffs also relied on the Justice for Victims of Terrorism Act, ^{Footnote 35} which creates a statutory cause of action against listed state sponsors of terrorism and (more importantly for present purposes) provides, at section 4(5), that Canadian courts must recognize an otherwise enforceable foreign judgment granted in favour of a person who has suffered a loss or damage as a result of a terrorism offence.

Canada suspended its diplomatic relations with Iran in September 2012. In August 2013, the minister of foreign affairs issued certificates, pursuant to sections 11(a) and (c) of the Foreign Missions and International Organizations Act, ^{Footnote 36} identifying Iran’s diplomatic property and, by implication, its exigible Canadian assets. An Ontario court order subsequently confirmed the exigibility of certain Iranian lands and bank accounts in Canada. ^{Footnote 37}

Iran advanced numerous arguments to avoid the liability these statutory provisions appeared to permit. Hainey J rejected them all and dismissed Iran’s application to set aside the default judgments against it. In the course of his reasons, the learned judge made some notable observations about the operation of the Justice for Victims of Terrorism Act, the section 6.1 exception to the State Immunity Act and the role of minister’s certificates under the Foreign Missions and International Organizations Act. The judgment also leaves significant issues for future determination.

Hainey J confirmed that, in a proceeding under section 4(5) of the Justice for Victims of Terrorism Act, a plaintiff need only prove that the foreign judgment she seeks to enforce in Canada is recognizable here, that it is in favour of the plaintiff for terrorism-related loss or damage, and that the defendant state is on the list created by section 6.1(2) of the State Immunity Act. In particular, the plaintiff need not prove that the respondent state in fact supported terrorism. ^{Footnote 38}

Nor must a plaintiff prove that the respondent state committed terrorist offences under Part II.1 of the Criminal Code. ^{Footnote 39} Rather, a Canadian court confronted with a US judgment for recognition and enforcement must accept the US court’s findings of fact, including, in this instance, the findings that the defendants materially supported the several terrorist attacks that caused the plaintiffs’ losses. ^{Footnote 40} The effect of the defendants’ default was that the plaintiffs’ allegations were deemed admitted, but, in any case, the US courts’ findings of fact brought the matter within the Criminal Code’s terrorism offence provisions and therefore within the Justice for Victims of Terrorism Act. ^{Footnote 41}

The US judgments for which the plaintiffs sought recognition and enforcement met the criteria established in Beals v Saldanha. ^{Footnote 42} On this point, Iran submitted that the US Foreign Sovereign Immunities Act of 1976 contravened international law. Rather than address that interesting question, Hainey J observed that the US judgments were obtained pursuant to the US Act and that this law and Canada’s Justice for Victims of Terrorism Act provide essentially the same basis for courts to assume jurisdiction over a foreign state in a claim for damages resulting from a terrorist attack in a foreign country. Thus, consistently with Beals, the US courts had assumed jurisdiction on the same basis as a Canadian court would. ^{Footnote 43}

On the important issue of whether Iranian assets not recognized by the minister’s certificates as protected from execution by diplomatic immunity, Hainey J held that the court must follow the minister’s lead. “Diplomacy and diplomatic relations,” noted the learned judge,

On this basis, Hainey J effectively concluded that exercises of the foreign affairs prerogative to recognize or decline to recognize foreign state property as protected by diplomatic immunity are not reviewable:

Remarkably, Hainey J reached this conclusion without consideration of the case law under section 11 of the Foreign Missions and International Organizations Act, except to note that Braid J recently came to the opposite conclusion in a decision about which Hainey J observed only that he was not bound by it and declined to follow it! ^{Footnote 46} In the circumstances, Hainey J’s conclusion on this point cannot be regarded as dispositive of the issue.

As occurs with regrettable frequency these days, the court had before it a so-called expert report from a professor on certain international legal issues. The professor was cross-examined on his legal opinions, apparently without objection from either counsel or the court as to the admissibility of such evidence. Hainey J’s reasons only mention this testimony briefly, however, and do not appear to have been much influenced by it. ^{Footnote 47}

Ententes Québec-France — mise en œuvre en droit québécois — effet de l’art. 2807 du Code civil

Bertin Mbonjo c Collège des médecins du Québec, 2016 QCCS 3033 (28 juin 2016). Cour supérieure du Québec.

Comme dans l’affaire Lum (résumée précédemment), l’affaire Mbonjo ne relève pas strictement du droit international puisque les instruments pertinents ont, semble-t-il, un caractère non-contraignant au plan international étant donné que le Québec et non pas le Canada en est partie. L’arrêt est néanmoins intéressant pour sa considération de la mise en œuvre des ententes internationales en droit interne et du statut de telles ententes en droit québécois.

Le demandeur est médecin français et détenteur du titre de spécialiste en cardiologie. En 2007 il obtient son équivalence en médecine familiale du Collège des médecins du Québec (CMQ). Il désire obtenir une pareille reconnaissance au Québec de sa spécialité en cardiologie. Le CMQ refuse sa demande en raison d’un problème d’équivalence de sa formation postdoctorale française. Le demandeur présente alors une demande de reconnaissance de l’équivalence de sa formation au comité d’admission à l’exercice du CMQ (CAE), lequel conclut que la formation du demandeur n’est pas globalement équivalente à celle requise au Québec où la formation dure soixante-douze mois. La formation française du demandeur n’a duré que quarante-huit mois.

Au lieu de se pourvoir en contrôle judiciaire de cette décision, le demandeur intente une requête introductive d’instance en jugement déclaratoire. Sa requête est fondée sur l’Entente Québec-France en matière de reconnaissance mutuelle des qualifications professionnelles de 2008 (l’Entente), et un arrangement Québec-France, en vertu de l’Entente, en vue de la reconnaissance mutuelle des qualifications professionnelles des médecins (l’ARM). Selon le demandeur, l’Entente doit être interprétée pour inclure son cas, et tant l’Entente que l’ARM sont sources de droit positif au Québec puisque la Loi permettant la mise en œuvre de l’Entente entre le Québec et la France en matière de reconnaissance mutuelle des qualifications professionnelles ainsi que d’autres ententes du même type ^{Footnote 48} renvoie à l’Entente spécifiquement. À noter également que l’ARM fait sujet d’un règlement dit “pour donner effet à” l’ARM (le Règlement). ^{Footnote 49}

Devant la Cour supérieure, le CMQ et la procureure générale du Québec soutiennent que la demande en jugement déclaratoire est non fondée en droit puisque ni l’Entente ni l’ARM n’a été incorporée en droit interne québécois et alors n’est pas une source de droits individuels. La question en litige est de savoir si la requête du demandeur est mal fondée en droit. La juge Mainville accueille la demande en irrecevabilité et en rejet.

La juge souligne que le législateur a confié aux conseils d’administration des ordres professionnels la compétence d’attribution exclusive de la délivrance des permis et certificats de spécialistes donnant accès à une profession, et qu’il n’appartient pas à la Cour supérieure de s’immiscer dans les décisions du CAE. ^{Footnote 50}

Quant au statut juridique de l’Entente et l’ARM en droit interne québécois, la juge remarque que “la doctrine et la jurisprudence enseignent que les ententes, traités, actes internationaux, bilatéraux ou internationaux, ce qui inclut les arrangements, possèdent en droit interne une autorité qui s’impose aux tribunaux si leurs textes ont fait l’objet d’une incorporation ou d’une mise en œuvre législative.” ^{Footnote 51} En plus, “une simple référence dans la législation ne suffit pas. Il faut une intention claire et non ambiguë du législateur d’incorporer la convention ou le traité dans le droit interne.” ^{Footnote 52} Selon la juge, l’intention requise ne se révèle pas dans les dispositions québécoises pertinentes — et ceci en dépit du fait que ces dispositions comprennent la Loi qui, il convient de noter, se dit une loi “permettant la mise en œuvre de l’Entente,” et le Règlement libellé “pour donner effet à” l’ARM.

La position du demandeur semble moins solide lorsqu’il soutient que l’article 2807 du Code civil du Québec s’inspire de la théorie moniste et commande au juge de prendre connaissance d’office des dispositions d’une entente internationale qui s’applique au Québec. La juge Mainville rappelle avec justesse, en se référant au texte du professeur Emanuelli, que cette article ne concerne que la preuve et qu’au Québec comme au Canada, bien que le juge s’efforce de réconcilier la loi introductive avec les dispositions du traité correspondant, si la loi va clairement à l’encontre du traité, la première l’emporte. ^{Footnote 53}

Je ne m’avancerai pas à émettre une opinion en ce qui concerne si l’Entente et l’ARM sont ou non suffisamment mises en œuvre en droit québécois pour exécuter les obligations du Québec envers la France. Sans vouloir suggérer que la juge avait tort en l’espèce, je souligne que son expression qu’il “faut une intention claire et non ambiguë du législateur d’incorporer la convention ou le traité dans le droit interne” n’est pas soutenu par l’autorité qu’elle cite, soit UL Canada inc. c Procureur Général du Québec. ^{Footnote 54} Cet arrêt portait sur une loi qui se contentait d’affirmer que certaines ententes “sont approuvées” sans aucune déclaration selon laquelle elles doivent faire partie du droit interne du Québec. ^{Footnote 55} Ici, par contre, l’Assemblé nationale semble avoir voulu au moins faciliter, sinon effectuer, la mise en œuvre de l’Entente en droit interne par le biais de la Loi. La proposition que l’intention du législateur d’incorporer une convention en droit interne doit être non ambiguë n’a jamais (à ma connaissance) été stipulé par la Cour suprême du Canada, peut-être pour la raison qu’elle risque de contredire ou minimiser l’approche contextuel à l’interprétation des lois et la reconnaissance que ce contexte comprend les obligations internationales de l’État. ^{Footnote 56}

Child abduction — habitual residence — time-limited consensual stays

Balev v Baggott, 2016 ONCA 680 (13 September 2016). Court of Appeal for Ontario.

This was a Hague Convention case involving two Canadian parents with permanent residency in Germany. ^{Footnote 57} The couple’s two young children had lived in Germany most of their lives when, in April 2013, the parents agreed that the mother would take them to Ontario from July 2013 to 15 August 2014 to attend school. Shortly after their departure, the father had a change of heart and purported to revoke his consent. In June 2014, two months before his time-limited consent was to expire, he filed a Hague Convention application in Ontario seeking an order for the children’s return to Germany. The father also sought relief in Germany, consisting first of a custody application and later a Hague Convention application. These steps delayed the Ontario proceedings by ten months.

The application judge found that the mother had wrongfully retained the children in Canada within the meaning of Article 3 of the Hague Convention by refusing to return them to Germany after the father’s consent expired after 15 August 2014. He found that the children were habitually resident in Germany, relying in part on the parents’ permanent resident status and settled lives there, the fact that the children were born and attended school there, and that their lives were centred in Germany before their departure for Ontario. The father’s custody rights under Article 3 were breached by the mother’s act of retaining the children in Ontario beyond the consent period.

On appeal to the Divisional Court, the application judge’s finding of habitual residence was overturned. The court found instead that the children’s habitual residence had changed from Germany to Ontario during their year-long stay in the province and, thus, that the Hague Convention did not apply.

On further appeal to the Court of Appeal for Ontario, the Divisional Court’s decision was overturned and the application judge’s decision restored. Sharpe JA for the Court of Appeal began by observing that

Sharpe JA also noted that Article 12 of the Hague Convention establishes a presumption in favour of ordering the child’s summary return and that if an order for return is made it is for the courts of the requesting jurisdiction to determine the issue of custody. ^{Footnote 59}

Article 3 of the Hague Convention provides that the retention of a child is wrongful if: (1) the removal or retention is in breach of the custodial rights of the applicant under the law of the state where the child was habitually resident immediately before the retention and (2) at the time of the retention, the custodial rights were actually exercised or would have been but for the retention. The Hague Convention does not itself define habitual residence, but the Court of Appeal did so in Korutowska-Wooff v Woofe. ^{Footnote 60} Under that test, Sharpe JA held there to be no question but that the children’s habitual residence before their arrival in Ontario was Germany. The question was whether that had since changed. Sharpe JA noted “a long and well-established line of authority” that one parent cannot unilaterally change a child’s habitual residence. ^{Footnote 61} The application judge had correctly followed that principle. In particular, time-limited stays such as this one do not shift a child’s habitual residence. ^{Footnote 62} The Divisional Court had erred in applying section 22(2)(b) of the Children’s Law Reform Act ^{Footnote 63} to alter the children’s habitual residence during the period of their consensual, time-limited stay in Ontario. Section 22(2)(b) provides:

While, on its face, this provision may appear to support the Divisional Court’s conclusion, Sharpe JA agreed with a 2002 decision that “[t]here is an implication of permanency that needs to be read into the definition in s. 22(2).” ^{Footnote 64}

The Divisional Court’s reasoning relied considerably on evidence that the children had settled into their new Ontario environment. But such evidence is not relevant if the Hague Convention application is brought within one year of the wrongful detention or removal. This is the effect of Article 12 of the Hague Convention, which permits evidence of settling only when the application is brought more than twelve months after the wrongful detention or removal. ^{Footnote 65}

In response to the mother’s submissions based on Article 13, by which the court may “refuse to order the return of the child if it finds that the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of its views,” Sharpe JA deferred to the application judge’s determination that the children’s objections were neither substantial nor strong enough to rate as more than a preference for one place over another.

It is most regrettable that the delays in bringing this case on meant that the children had been in Ontario for more than three years by the time of the Court of Appeal’s decision. As Sharpe JA rightly noted, “moving them back to Germany is likely to be difficult.” ^{Footnote 66}

Act of state doctrine — customary international law claims — striking of pleadings

Araya v Nevsun Resources Ltd, 2016 BCSC 1856 (6 October 2016). Supreme Court of British Columbia.

The Supreme Court of British Columbia had before it applications by the defendant, a BC mining company (Nevsun), seeking to put an early end to claims for human rights-related abuses arising from the Bisha Mine in Eritrea. The plaintiffs were Eritreans who were allegedly conscripted by the Eritrean government and forced to work for the defendant’s contracting companies and subsidiaries. The plaintiffs’ claims were based on vicarious liability, civil conspiracy, and negligence. The relief that Nevsun sought included a declaration of forum non conveniens, an order striking the claim as non-justiciable because it was barred by the act of state doctrine, and an order striking the claim as non-justiciable because it was based on customary international law. Abrioux J dismissed the forum application, finding that the applicants had not shown Eritrea to be the appropriate forum. This note focuses on the remaining two justiciability arguments.

Nevsun contended that the plaintiffs’ claims were entirely barred by the act of state doctrine, “a common law rule that limits the court’s subject matter competence” by preventing them from adjudicating on the lawfulness of the sovereign acts of foreign states committed within that state’s own territory. The plaintiffs’ claims would force the court to determine whether Eritrea’s National Service Program amounted to forced labour contrary to international law and a crime against humanity. Abrioux J noted that Nevsun’s argument raised several issues including whether the act of state doctrine forms part of the common law of Canada. ^{Footnote 67}

The learned judge noted that the act of state doctrine “has not yet been applied in Canada” ^{Footnote 68} and therefore turned to US and UK authorities on the doctrine, relying particularly on the decision of the Court of Appeal for England and Wales in Belhaj v Straw. ^{Footnote 69} That decision imposed strict limits on the doctrine, including that it will not apply to foreign acts of state that are in breach of clearly established rules of international law, are contrary to English principles of public policy, or are grave infringements of human rights — a significant hollowing out of the doctrine. Abrioux J also noted an Australian decision in which it was observed: “Beyond the certainty that the doctrine exists there is little clarity as to what constitutes it.” ^{Footnote 70}

The plaintiffs urged the court to conclude that act of state was simply not a part of Canadian common law, given that no Canadian court has applied it. The difficulty with accepting this submission was that Harris JA of the Court of Appeal for British Columbia only recently referred to the doctrine (though without applying it) in United Mexican States v BC (Labour Relations Board). ^{Footnote 71} Given this reference, together with the presence of the doctrine in English and Australian law and a reference to a leading Canadian text on conflict of laws, Abrioux J felt bound to affirm the existence of the doctrine in Canadian common law. ^{Footnote 72}

The learned judge nevertheless declined to strike the plaintiffs’ claim on the basis of the act of state doctrine, given “the uncertain state of the law regarding this doctrine at the time of the hearing of this application.” If he were wrong in this, he would nonetheless dismiss the application to strike on the basis of the doctrine’s own limitations. ^{Footnote 73} Abrioux J characterized the doctrine as a novel defence raised by Nevsun and affirmed that his decision to dismiss the application to strike did not preclude Nevsun from advancing the defence at trial. ^{Footnote 74} In concluding on this point, the learned judge made these notable observations:

Abrioux J then turned to Nevsun’s application to strike those portions of the plaintiffs’ claims founded on breaches of customary international law. Nevsun contended that prohibitions recognized in customary international law do not give rise to a private law cause of action for damages in Canadian law. Here again, the learned judge dismissed Nevsun’s application. “The current state of the law in this area,” he noted, “remains unsettled and, assuming that the facts set out in the [claim] are true, Nevsun has not established that the CIL claims have no reasonable likelihood of success.” ^{Footnote 75} In reaching this conclusion, Abrioux J observed: “Common law courts have historically applied international custom to create private law obligations and, indeed, entire fields of private law,” noting Blackstone’s identification of such areas as bills of exchange, the law merchant, maritime law and prize as governed (in his time) by international custom. ^{Footnote 76} He also noted, however, that no civil claims alleging breaches of customary international legal norms, peremptory or otherwise, have been successfully advanced in Canada. ^{Footnote 77}