November 30, 2017

Foreign Human Rights-Based Tort Claims Clear Last Jurisdictional Hurdles in Canadian Courts: Introducing “Transnational Torts”

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On 21 November, the British Columbia Court of Appeal issued voluminous reasons for judgment in Araya v. Nevsun Resources Ltd.[2017] BCCA 401,upholding the decision of the trial court below, [2016] BCSC 1856, that it had jurisdiction to entertain tort claims by foreign nationals – based on alleged violations of international legal norms — with respect to alleged injuries inflicted in a foreign jurisdiction, not in Canada.  At the outset of her reasons for judgment, Newbury J.A. posed the following “overarching question” relating to the jurisdiction of Canadian courts I such cases:

[W]hether Canadian courts, which have thus far not grappled with the development of what is now called ‘transnational law’, might also begin to participate in the change described; or whether we are to remain on the traditional path of judicial abstention from the adjudication of matters touching on the conduct of foreign states in their own territories – even where that conduct consists of violations of peremptory norms of international law, or jus cogens.

The unambiguous answer of this unanimous panel of the BCCA rang out in the affirmative that it was time for Canadian courts to so engage.

To be sure, there was a strong Canadian connection prompting the plaintiffs’ claim at first instance. The defendant was a Canadian mining company with a 60% interest in a joint venture with the Government of Eritrea, a 40% shareholder, to develop a gold mine in that country through a chain of subsidiaries. The case concerns the alleged use of slave labour supplied by the Eritrean government and military to build out the mining site and related infrastructure.

The Nevsun case joins two other similar cases involving alleged human rights violations that are also cleared for trial on the merits, both arising from the alleged actions of Canadian subsidiaries against indigenous groups in Guatemala: Choc v. Hudbay Minerals inc. [2013] ONSC 1414; and Garcia v. Tahoe Resources Inc., [2017] BCCA 39, reversing previous stay granted on basis of forum non conveniens, [2015] BCSC 2045.

Why is this new kind of case emerging in Canada and why now? One major reason is that Canada is a party to all major United Nations human rights conventions that are in large part declaratory of customary law norms which the Supreme Court has clearly said are part of Canadian common law, giving rise to their invocation in private law suits: Hape v. The Queen, [2007] 2 S.C.R. 282 (maj. Reasons per Lebel JSCC).

Another potential reason is that this evolution of Canadian law and new receptivity by Canadian courts have occurred on the heels of the U.S. Supreme Court generally discouraging similar law suits previously entertained by U.S. Federal courts pursuant to the Alien Tort Statute, an originally obscure and forgotten statute of the first United States Congress in 1789, giving those courts jurisdiction to adjudicate tort actions by aliens for alleged violations of international law or treaties to which the United States is a party. There is no statutory equivalent to The ATS in Canada, but it appears that in the wake of the Hape decision, such statutory authorization is unnecessary. U.K. courts are taking a similar view, as noted by Madam Justice Newbury in Nevsun, who began her reasons for judgment by citing the observations of Lord Justice Lloyd Jones in Belhaj v. Straw, [2014] EWCA Civ. 1394, that “a fundamental change has occurred within public international law. The traditional view of public international law as a system of law merely regulating the conduct of states among themselves on the international place has long been discarded. In its place has emerged a system which includes the regulation of human rights by international law, a system of which individuals are rightly considered to be subjects….”

The serious allegations in all the three Canadian cases now going to trial remain to be proven in Court. However, they illuminate escalating domestic legal liabilities fueled by public international law norms for Canadian companies operating in host states that are “soft” jurisdictions or even rogue states measured against prohibitive rules of international customary human rights law. And that is a third factor fueling this new branch of Canadian common law requiring a much greater understanding of international law for the purposes of both bringing and defending such cases. They are no accident and more will follow as a result of the concentration of the global mining industry within the reach of Canadian courts. Canada is host to the head offices of fully half of the world’s mining companies, many of which are engaged in mining projects abroad. Many of these projects in turn are situated in volatile host states with unpredictable legal regimes that operate to create or contribute to the causes of action that occur there instead of providing any kind of meaningful forum for resolving them. In the result, it appears that, increasingly, foreign plaintiffs from these jurisdictions will seek justice from Canadian judges sitting in Canadian courts.

Read the Araya v. Nevsun Resources Ltd.[2017] BCCA 401 case here.

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