Stays of Proceedings - Case Summaries
The database contains 23 case summaries relating to Stays of Proceedings. 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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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.
Stays Pending Appeal
Byatt International SA v. Canworld Shipping Company Limited, 2013 BCCA 558
This was an application to stay the order of the British Columbia Court of Appeal rendered in Byatt International S.A. v Canworld Shipping Company Limited, 2013 BCCA 427, wherein the court ordered that the ship owner was entitled to sub-freight paid into court. The grounds for the application were that an application for leave to appeal the decision had been filed with the Supreme Court of Canada.
Decision: Application dismissed.
Held: The test for a stay pending an appeal is: (1) that there is merit to the appeal in the sense that there is a serious question to be tried; (2) that irreparable harm would result if the stay was refused; and (3) that the inconvenience to the applicant if the stay is refused would be greater than the inconvenience to the respondent if the stay was granted. The merits test involves a consideration of whether the issues raised are of public importance. The issues raised here are not of such importance. This case involves the application of well settled legal principles and the fact that there is an argument the case may have been wrongly decided is not, by itself, sufficient to elevate the issue to one of national importance.
Stays of Proceedings - Second action Pending - Setting Aside Arrest
Quin-Sea Fisheries Limited v. The Broadbill I , 2013 FC 575
The plaintiff and defendants entered into an agreement whereby, in consideration of a loan by the plaintiff, the defendants granted a mortgage over the defendant vessel and agreed to make its catch available to the plaintiff for one year following the year the loan was repaid. The loan was repaid but the defendants failed to sell their catch to the plaintiff. As a result, the plaintiff commenced proceedings in the Supreme Court of Newfoundland for a mandatory injunction requiring the defendants to sell their catch to it. That injunction was refused on the grounds that there was no irreparable harm. The plaintiff then commenced these proceedings and arrested the vessel in Federal Court. The defendants brought this motion to stay the Federal Court proceedings on the grounds that parallel proceedings existed in the Supreme Court of Newfoundland.
Decision: Motion dismissed.
Held: The plaintiff was not acting in a vexatious manner when it sought to arrest the vessel after failing to obtain the injunction. The Supreme Court of Newfoundland has no specific admiralty rules dealing with arrest and an injunction is a very different procedure from an action in rem. It is not unusual for a party to take action in the Federal Court merely to obtain security. It would be inappropriate to stay the Federal Court proceedings at this time although at some point in time one of the actions must be stayed.
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.
Ship Building - Insolvency - Stay of Proceedings
Worldspan Marine Inc. (Re) v. , 2011 BCSC 1758
The issue in this case was whether a stay of proceedings previously granted under the Companies Creditors Arrangement Act to allow an insolvent ship builder to refinance should be continued. The intended buyer of the partially constructed yacht opposed the builder’s application to continue the stay. The buyer wanted to lift the stay so that he could appoint a receiver for the vessel and exercise his remedies. The Court noted that a stay should only be granted or continued when it would further the objective of facilitating a plan of arrangement between the debtor and its creditors. Other factors included the debtor’s progress towards a restructuring and the relative prejudice. The Court reviewed the various steps that had been taken and ultimately granted the continuation of the stay noting that “at this stage, a CCAA restructuring still offers the best option for all of the stakeholders”.
Ship building - Insolvency -Stays of Proceedings
Sargeant v. Worldspan Marine Inc., 2011 BCSC 767
This matter concerned a partially constructed yacht, an insolvent builder and many unhappy creditors. Some of the creditors had commenced proceedings in the Federal Court and obtained either arrest warrants against the vessel or caveats. The builder brought this application in the British Columbia Supreme Court under the Companies Creditors ArrangementAct seeking, inter alia, a stay of the Federal Court proceedings so that it could develop a viable restructuring plan that would allow it to complete the construction of the yacht. Although the Court granted much of the relief requested, including a general stay of all proceedings, the Court refused to specifically stay the Federal Court proceedings “as a matter of comity”. Instead, the Order of the Court included a specific request to the Federal Court for its assistance to recognize the stay. The Court noted that the British Columbia Supreme Court and the Federal Court “working cooperatively and each exercising its own jurisdiction should be able to avoid any insuperable conflicts between their respective jurisdictions”.
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 - Supreme Court and Federal Court
Labki Finance Inc. v. Glovertown Shipyards Limited, 2010 NLTD 71
The underlying proceedings in this matter were commenced in the Supreme Court of Newfoundland by the defendant shipbuilder for an order requiring the owner of the vessel to remove the vessel from its shipyard and for storage fees of $1,000 per day. A second proceeding had also been commenced by the mortgagee of the vessel in Federal Court in which the mortgagee obtained judgment. The mortgagee brought this application in the Newfoundland proceedings for an order staying the proceedings. The application was refused. In reaching its conclusion the Court reviewed the authorities peculiar to the admiralty jurisdiction of the Newfoundland Supreme Court and concluded that the Newfoundland Supreme Court had concurrent admiralty jurisdiction with the Federal Court. The Court then questioned, without deciding, whether the Federal Court would have the jurisdiction to grant the relief sought in the Newfoundland proceedings. In any event, the Court held that the applicant had not established that the Federal Court was necessarily the more appropriate forum. The Court further found that there was little likelihood of conflicting orders affecting the vessel.
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.
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.
Motion – Jurisdiction – Stay Proceedings
DSL Corporation v. Bulk Atlantic Inc., 2003 FC 1061
The Plaintiff claimed against the Defendant for damage to steel pipe carried from Turkey to Houston. The Defendant applied to set aside the ex juris service of the Statement of Claim or stay the proceedings on the grounds there was no real and substantial connection between the matter and Canada. The Plaintiff was an American company, one of the Defendants was a Maltese company, the carrying vessel, which had not been arrested, was registered in Malta, the time charterer of the vessel was a Marshall Islands Company, and neither the actual nor intended ports of loading or discharge were in Canada. The ships agent in Houston had however advised the Plaintiff that their principals were Atlantic Maritime Inc. of Montreal. The Prothonotary held that the latter advice created a connection with Canada and relied upon United Nations v. Atlantic Seaways Corporation  2 F.C. 541 for the proposition that the court's jurisdiction in respect of cargo claims extended beyond Canada. The Prothonotary did indicate that he might have considered ordering a stay in favour of Texas if the Defendants had been willing to waive the time bar defence.
Motion to Dismiss – Stay – Parallel Proceedings
Vilhena Shipping Ltd. v. Agro-hall Ltd., 2003 FCT 756
This was an application by the Defendant to dismiss the proceedings or, alternatively, for a stay of proceedings. The ground for the application was that the Plaintiff had commenced parallel proceedings for the same relief in France. The Plaintiff had attempted to withdraw those proceedings but this was not allowed by the French Tribunal. Under the circumstances the Prothonotary declined to dismiss the Plaintiff's action since it was possible that the Plaintiff's application to withdraw the French proceedings would be allowed on appeal. However, the Prothonotary did order that the action be stayed to avoid duplication of costs and the risk of conflicting judgements.
Application to Strike – Lis Pendens – Stay of Proceedings – Forum non conveniens – Arrest – Amount of Security - Motions – Foreign Affidavits
A. Paschos K. Katsikopoulos S.A. v. The “Polar” et al., 2003 FCT 584
This was an application to strike out the Statement of Claim because the Plaintiff had commenced an earlier action in Greece involving the same parties or, in the alternative, to stay the proceedings on the basis of forum non conveniens. The court was also requested to review the amount of the security that had been provided by the Defendants to obtain the release of the “Polar” from arrest. The application to strike on the basis of lis pendens was not granted because the Plaintiff was prepared to withdraw its action in Greece in favour of maintaining its action in Canada alone. However, the Court did order that the action be stayed on the grounds that there was no connection between any aspect of the litigation and Canada other than the temporary presence of the vessel in Canada. This order was subject to the condition that the letter of credit in place in relation to the Canadian litigation be maintained and amended to include payment of any judgment that may emanate from the Greek courts. Finally, regarding the amount of security, the Court declined to interfere because the bond reflected an amount sufficient to cover the reasonably arguable best case of the Plaintiff together with interest and costs.
As a preliminary motion to the application to strike out the Statement of Claim, the Defendant sought to strike out the Plaintiff’s affidavits because the notary public who took the affidavits failed to comply with the requirements of Greek law, the law of the place where they were taken, as to the terms and conditions that ought to surround the administration of oaths to affiants. Even on the assumption that the Defendants were right in their criticism of the work performed by the Greek notary public, it did not follow that the affidavits should be struck. There was no evidence of any collusion between the affiants and the notary public with a view to contravening the requirements of Greek law. The record indicated that at all relevant times the affiants wished to file some allegations that they considered true and, “within the context of [his] residual discretion”, the Prothonotary considered this to be the essential thing. To strike out the impugned affidavits owing to deficiencies attributable to the notary public would, in the circumstances, be akin to elevating form over substance, and this the Prothonotary refused to do.
Appeals - Stay Pending Appeal
Saskatchewan Wheat Pool v. Armonikos Corp. Ltd., 2002 FCA 444
In this matter the Appellant applied for a stay of a judgement pending appeal. The judgement appealed from had ordered that the Federal Court proceedings be stayed in favour of London arbitration pursuant to an arbitration clause in a charter party. The court noted that the test to be applied was three-fold: (a) there must be a serious issue to be tried; (b) the applicant must show irreparable harm will result if a stay is not granted; and, (c) that the balance of convenience favours granting a stay. The court held that the first part of the test had been met as the appeal was not frivolous or vexatious. The court held the second part of the test had also been met in that the London arbitration had already and prematurely been commenced and the Appellant had lost its right to appoint an arbitrator. Moreover, if the Respondent obtained and collected an award, the Appellant would not be able to recover the payment, if successful on the appeal, as the Respondent had no Canadian assets. Finally, on the question of balance of convenience, the court held that the balance favoured granting the stay to avoid the costs and effort of the arbitration and because the Appellant was prepared to post security.
Service Ex Juris - Stay of Proceedings
Continental Insurance Co. v. Almassa International Inc., 111 ACWS (3d) 470
This matter concerned a cargo policy taken out by a Quebec merchant from an Ontario based insurer insuring a cargo of lumber carried from Quebec to Saudi Arabia. During the course of the voyage the ship suffered engine damage and called at an intermediate port for repairs. As a result of the delay, the lumber cargo was damaged and a claim was made under the policy. The insurer initially made a payment on account but later denied coverage. The assured brought an action in Quebec against the insurer and the insurer brought an action in Ontario against the assured to recover the monies paid. The assured brought the present motion to stay the Ontario proceedings. The motion was granted. The motions Judge held that mere residency of the insurer in Ontario was insufficient to create a real and substantial connection with Ontario and that the appropriate forum was Quebec. The judgement was appealed. In a short endorsement the Ontario Court of Appeal affirmed the decision of the motions Judge.
Stay of Proceedings - Insurance - Jurisdiction - Marine - Insurance - Brokers
Royal & Sun Alliance v. The “Renegade III”, 2001 FCT 1050
This was an application for a stay of proceedings. The applicant was the owner of the Defendant yacht which had been damaged during the 2000 Victoria-Maui race. The applicant made a claim under his insurance policy for approximately $122,000 which was paid except for the sum of approximately $12,000. Subsequent to the payment the underwriters learned of circumstances which might void the policy and advised the applicant of this. On the same day the applicant commenced proceedings in the British Columbia Supreme Court for payment of the $12,000 he alleged was owing under the policy. Underwriters later did purport to void the policy for material non-disclosure and commenced in rem and in personam proceedings in the Federal Court claiming the return of the moneys paid. The applicant then brought this motion to stay the Federal Court proceedings. The application for a stay was denied. The Prothonotary noted that the Court would grant a stay only in the clearest of cases. The onus was on the applicant to prove (1) the continuation of the action would cause prejudice or injustice, not merely inconvenience or additional expense and (2) the stay would not be unjust to the Plaintiff. The Prothonotary held that although the British Columbia Supreme Court was a convenient forum it was not clearly the more appropriate forum. The Prothonotary noted that if underwriters were forced to bring their claim in the British Columbia Supreme Court they could not bring an in rem action by way of counterclaim and would have to start new proceedings and arrest the vessel for a second time. Further, the Prothonotary noted, without deciding, that there might be an issue as to whether the British Columbia Supreme Court had in rem jurisdiction. The Prothonotary concluded that there was no real prejudice or injustice to the applicant and that to allow the stay would deprive the underwriter of a legitimate juridical advantage. It is noteworthy that during the course of his reasons the Prothonotary considered whether a claim by the assured against his broker could be properly brought in the Federal Court. The Prothonotary seemed to suggest that Canadian maritime law had developed to the point where claims against brokers in a marine insurance context might be within the jurisdiction of the Federal Court.
Stay of Proceedings - Convenient Forum
Nissho Iwai Company Limited et al v. Shanghai Ocean Shipping Company, 2000 CanLII 15777
This was an application to stay proceedings on the grounds that Canada was not the convenient forum. The action arose out of the grounding of the "Ning Hai" in the Kurile Islands and the consequent loss of the Plaintiff’s cargo. The Plaintiff alleged that the Defendant, as provider of the officers and crew of the "Ning Hai", owed it a duty of care to provide competent and qualified officers and crew and that it breached this duty. The Defendant argued that the Peoples Republic of China was a more convenient forum for the dispute because the officers and crew were Chinese nationals and were trained in China, the Defendant was a Chinese corporation and the grounding occurred far away from Canada. The Plaintiff argued that Canada was a convenient forum because the cargo was loaded in Canada, the charterer was Canadian, and there were a number of witnesses in Canada who had the opportunity to observe the competence of the crew before it left on the fateful voyage. The Plaintiff further argued that there would be no discovery of documents or examinations for discovery in China. The Court held that the fundamental issue in the dispute was the competence of the crew and that most, if not all, of the evidence on this issue was in China. In result, the Court allowed the motion and stayed the proceedings.