Tetley (2002) introduction to conflict of laws 5

CHOICE OF JURISDICTION

1. General Principles of Jurisdiction

   1. Common Law & Civil Law

• 
  Emphasis on jurisdiction often places undue emphasis on law of the forum instead of permitting the choice of the properly applicable law.
  
• 
  Canada and Australia follow the British general maritime law system, i.e. there is a single statute granting the court jurisdiction to hear specific maritime claims. Law is found in general maritime law so no specific statute needed.
  
• 
  In Halcyon Isle, for example, the Privy Council deemed the lien for the repair of a ship carried out under contract in the U.S. to be merely a remedy or procedure of the local court (Singapore). Singapore actually had no connection with the claim or the parties – the foreign right was not recognized. Canada, U.S., have not followed Halcyon, but other Commonwealth countries bound by Privy Council decisions have. The Ioannis Daskalelis did recognize a right created in a foreign country (SCC).
  
• 
  Tolofson – there must be a real and substantial connection to the jurisdiction to prevent overreach in extraterritorial and transnational transactions
  
• 
  Hunt – BC court ignores blocking statutes of Quebec (order and fairness)
  

3134 – General domicile rule

3135 – Forum non conveniens (see below)
3136 – forum conveniens – gives a right even when no jurisdiction…keep jurisdiction if no other suitable jurisdiction

3137 – lis pendens…can stay an action if there is another action based on the came facts and object in another jurisdiction, provided that the action can result in a decision that can be recognized in Quebec

3138 – Quebec authority may order provision or conservatory measures even if it has no jurisdiction over the merits of the dispute

3139 – If jurisdiction to rule on principle demand also has jurisdiction to rule on an incidental demand or cross demand

3140 – Cases of emergency or serious inconvenience…may take necessary measures for protection of the person or property of a person in Quebec

3148 – recognition of where Quebec courts have jurisdiction over personal actions of a patrimonial nature…

• 
  comity, order and fairness, while rules of PIL, are not binding in light of the specific and applicable rules of the CCQ
  
• 
  under 3148 (3) CCQ, courts can assume jurisdiction where the damages was suffered in Quebec – here the facility has created a reputation independent from the head office’s national reputation – furthermore, nothing suggests that this damage has to be direct damage to link it to the appropriate jurisdiction
  
• 
  Morguard and Hunt do not set out additional criterion in this case, as the CCQ sets out these provisions to meet these same standards – falling under these grounds mentioned would satisfy the test anyways
  
• 
  3135 CCQ provide a sufficient guard against the broad basis of 3148 – it is an FNC provision
  

Exclusive jurisdiction in 3151 (for first instance in all matters founded on 3129) and 3129 (application of rules in this Code for matters of civil liability from raw materials…) CCQ…3155(1) (recognition and enforcement of foreign judgment except where that country has no jurisdiction) and 3165(1) (foreign jurisdiction not recognized where by reasons of subject matter or agreement, Quebec law grants exclusive jurisdiction to its authorities to hear the action) – recognition

No waiver in employment and consumer contracts – 3149 CCQ

Insurance 3150 CCQ (extends 3148 CCQ) – where the holder, the insured or the beneficiary of the contract is domiciled or a resident of Quebec, the contract is related to an insurable interest in Quebec or the loss took placed in Quebec

2. General Principles in Maritime Law

1. 
   in personam (actions designed to settle the rights of parties as between themselves – breach on contract, etc.) – jurisdiction traditionally seen as procedural and depending on service of writ or submission of defendant to court’s rules.
   
2. 
   in rem (directed against the ship and/or its cargo and freight in respect of certain maritime claims) – jurisdiction depends on the presence of the res in the court’s territorial waters. The arrest confirms the court’s jurisdiction.
   
3. 
   quasi in rem (the attachment and the Mareva injunction) – American courts are permitted to take jurisdiction over “any admiralty or maritime claim in personam” against a defendant living abroad by “attaching” his chattels in the jurisdiction of the court, even where the action does not relate to those assets. The Mareva injunction does not give jurisdiction per se in the UK or Canada.
   

This is no longer in ComL but still exists in maritime law. This is advantageous because if the ship sinks you can seize the ship as part of the debt to be paid.

3. Reasons for Refusing Jurisdiction

1. 
   Immunity of foreign states in non-commercial matters – most nations have sovereign immunity acts which will prevent their courts from hearing a non-commercial suit against a foreign state.
   
2. 
   lis alibi pendens – discretion to stay the proceedings, where there is a suit on the same matter between the same parties in another jurisdiction (should be conditional on plaintiff actively pursuing its suit in the other jurisdiction)
   
3. 
   Vexatious and frivolous proceedings (see Amchem Products Inc.) – not obliged to hear trivial matters or matters whose sole purpose is to cause harm rather than to obtain justice
   
4. 
   Valid jurisdiction clauses and arbitration clauses (entered into freely by the parties, usually recognized by the courts in their discretion or required to be recognized by Convention) – see Conventions at end
   
5. 
   Genuine agreement by the parties to another jurisdiction (entered into freely by the parties)
   
6. 
   Forum non conveniens (see Arctic Explorer) – Brussels Convention 1968 makes this difficult
   
7. 
   Where court believes its judgments and orders will not be recognized
   

4. Forum non conveniens

• 
  Quebec - CCQ Art. 3135 (also 3137): Even though a Quebec authority has jurisdiction to hear a dispute, it may exceptionally and on an application by a party, decline jurisdiction if it considers that the authorities of another country are in a better position to decide.
  
  • 
    Spar Aerospace – comity, order and fairness…court said Quebec could keep jurisdiction
    
• 
  In the UK, s. 49 of the Civil Jurisdiction and Judgments Act allows courts to stay or dismiss any proceedings before them on this ground where consistent with the 1968 Convention or the Lugano Convention 1988. No plea of ti may be allowed where jurisdiction is taken under these Conventions.
  
• 
  Maritime – Arctic Explorer – used FNC to stay proceedings (see previous section)
  
• 
  Federal Canada – Tolofson – service in the jurisdiction or ex juris (you must service outside (file suit outside to get inside justice)…Amchem – anti-suit injunction upheld in the SCC
  
  • 
    Rules of Court of Ontario, article 17.06(2)(c) – motion to set aside service in outside Ontario where Ontario is not a convenient forum for the hearing of the proceeding
    
• 
  United States – weighs factors – adequate alternative forum, public interest and private interest, weighing factors of inters (often equity), governmental interest analysis (Brainerd Currie)
  

Reasons to decline jurisdiction (defendant has burden of proof to convince court to exercise its discretion and must show that there is some other clearly more appropriate forum):

1. 
   Both courts have jurisdiction per se, and
   
2. 
   Witnesses and evidence generally more available in the other court; or
   
3. 
   Law surrounding claim is of the other forum and can be better considered there; or
   
4. 
   By statute court (e.g., art. 3135 CCQ) court may grant forum non conveniens only on application by a party
   
5. 
   In general, the real test is appropriateness:
   
   1. 
      Convenience and expense for the parties;
      
   2. 
      Presence or absence of jurisdiction or arbitration clauses
      
   3. 
      Law governing the case
      
   4. 
      Residence, domicile, place of business of each party
      
   5. 
      Potential risk of injustice, lack of independence, inexperience, delay
      
   6. 
      Potential loss of some substantial advantage to the plaintiff (cheaper and quicker trial, higher damages, awards of interest, burden of proof, time bars) if the stay is granted
      

• 
  Americans consider “private interest factors” and “public interest factors”, generally similar to U.K. considerations but with imprint of U.S. “interest analysis”.
  
• 
  defendant has burden of proof that the court should exercise its discretion to stay the proceedings – must show that not appropriate forum and that there is another more appropriate forum
  

Courts applying forum non conveniens should stay the suit rather than dismiss in case the other court does not accept jurisdiction or other unacceptable events take place, and attach conditions to grant of stay that include:

1. 
   Claimants take suit in other jurisdiction and other court must accept jurisdiction
   
2. 
   Defendants submit to service within the delay and the jurisdiction of the other court
   
3. 
   Defendants waive any prescription or statute of limitations defense
   
4. 
   Security acquired by either party preserved (in certain circumstances)
   

1. The Arctic Explorer, 590 F. Supp 1346 (US District Crt, Southern District Texas, 1984)

1. 
   Does substantive Canadian law (limitation of liability statutes) apply? (under U.S. law time charterers cannot limit liability) Yes.
   
2. 
   Or should there be a dismissal of proceedings based on Canada being the more convenient forum? Yes.
   

1. 
   A limitation statute may be both procedural and substantive. If the foreign limitation law is part of the substantive law of the foreign country whose law governs the controversy under normal choice of law principles, the U.S. court can and should apply the foreign law. The right to invoke the limitation statute (in Canadian law) is substantive because it creates a right to recover damages. Therefore, motion to dismiss denied.
   
2. 
   Arctic Explorer had no substantial contacts (Lauritzen/Rhoditis) with or base of operations in the US. All were in Canada (lex loci delicti, flag, etc.) Therefore, Canadian law governs dispute.
   

• 
  Gilbert (U.S.) test for discretionally dismissing under forum non conveniens – consider all private and public interest factors. Is there an adequate alternative forum? Also, some potential culpable parties located in Canada beyond jurisdiction of U.S. court. Strong interest shown by Canadian government in case (report). Any American interest is therefore simply insufficient to outweigh the significant contacts with Canada (closest most real connection). Forum non conveniens dismissal granted, with conditions
  
• 
  private interest – ease and access to sources of proof, availability of compulsory process for attendance of willing, witnesses…and all other practical problems that would make trial easy, expeditious ad inexpensive
  
• 
  public interest – administrative difficulties from court congestion, the local interest in have localized controversies at home, the avoidance of unnecessary problems of conflicts of law, the unfairness of burdening citizens in another forum with jury duty
  
• 
  Tetley: mistake to dismiss action with conditions instead of staying it.
  

5. Forum conveniens

• 
  Usually a right granted to the court by statute – see CCQ Art. 3136 CCQ: Even though a Quebec authority has no jurisdiction to hear a dispute, it may hear it, if the dispute has a sufficient connection with Quebec, where proceedings cannot possibly be instituted outside Quebec or where the institution of such proceedings outside Quebec cannot reasonably be required.
  
• 
  A relatively recent concept and can be surprising.
  

6. Forum Shopping

1. The Sky Reefer (U.S. Supr. Crt., 1995)

• 
  Court held that arbitration clause valid although clearly it appeared to be a case of forum shopping since it specified that suit should be taken in Japan where the parties were American – all contacts pointed to American law. Clause was intended to harass.
  
• 
  There was no real choice of jurisdiction because the bill of lading was issued by a party without negotiation.
  

46.(1) “If a contract for the carriage of goods by water to which the Hamburg Rules (see page 817) do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, where

(a) the actual port of loading or discharge, or the intended port of loading or discharge under the contract, is in Canada;

(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or

(c) the contract was made in Canada.

Notwithstanding subsection (1), the parties to a contract referred to in that subsection may, after a claim arises under the contract, designate by agreement the place where the claimant may institute judicial or arbitral proceedings.”

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