The Long Arm of Canadian Law Reaches Global Price-Fixers

The Long Arm of Canadian Law Reaches Global Price-Fixers: NHK Spring Co. Ltd. v. Cheung, 2024 BCCA 236

“Don’t tread on me.” This well-known warning originating in the American Revolutionary War could double as a message to global corporations: overreach has consequences. In NHK Spring v. Cheung, 2024 BCCA 236, the BC Court of Appeal confronted an alleged worldwide price-fixing conspiracy that funneled overcharges into Canadian electronics. The Court made it clear: even if your factories are oceans away, if your scheme harms Canadians, you can’t slip past the long arm of Canadian justice. The decision is an important reaffirmation of a generous approach to territorial jurisdiction and of the limited role of pleadings-stage dispositive challenges in the class-action context.

The BC Court of Appeal dismissed appeals from a certification order in a proposed national class action alleging an international price-fixing conspiracy involving hard-disk drive components. The Court held that (1) territorial jurisdiction over foreign defendants was properly assumed because the pleadings and evidence raised a good arguable case of a conspiracy that caused economic harm in British Columbia (so the Court Jurisdiction and Proceedings Transfer Act (CJPTA) presumption applied), and (2) it was not plain and obvious that the civil cause of action under s.36 of the Competition Act must fail at the certification stage because of statutory and common law limits on the extraterritorial reach of Canadian law.

Background to the Appeal:

From January 1, 2003 to April 30, 2016, the defendants (members of three corporate groups) manufactured roughly 96% of the world’s supply of a component (“Assemblies”) used in hard-disk drives. The plaintiffs alleged that the defendants conspired to fix global prices and control supply of Assemblies, producing an “overcharge” that passed through the supply chain into consumer and enterprise electronics sold in British Columbia and across Canada. The certification judge certified a national class proceeding under the Class Proceedings Act (BC), and the defendants appealed.

For the purposes of this comment, the Court considered two principal issues:

1. Territorial jurisdiction: Did the certification judge have territorial competence to exercise jurisdiction over foreign defendants for alleged wrongdoing that occurred outside Canada? (i.e., was there a “real and substantial connection” to BC / Canada so that the CJPTA permitted proceedings here?)
2. Viability of the s.36 civil cause of action at the certification stage: Was it “plain and obvious” that a claim under s.36 of the Competition Act could not succeed because the underlying offence-based conduct (s.45) fell outside Canada and criminal jurisdiction is territorially limited by s.6(2) of the Criminal Code and related judicial decisions?

Decision:

1. Territorial jurisdiction — real and substantial connection, generously applied

The Court reiterated that territorial jurisdiction is presumptively appropriate where there is a good arguable case that the defendant committed a tort that caused economic harm in the forum. In other words, if the pleadings and the evidence together show a plausible causal chain by which the alleged foreign conspiracy caused loss to purchasers in BC, the CJPTA presumption of jurisdiction applies and the court can hear the case. The Court accepted the certification judge’s approach that the pleadings and expert evidence (which showed that Assemblies and finished products containing them reached Canada and BC through ordinary channels of commerce) raised such a good arguable case. The fact defendants had no physical presence in Canada did not defeat the presumption.

2. Viability of the s.36 claim — not plain and obvious to strike at certification

The defendants argued that the civil remedy in s.36 of the Competition Act depends on conduct that is an offence under s.45, and that because s.6(2) of the Criminal Code limits extraterritorial criminal liability, the alleged foreign conduct could not be characterized as an offence in Canada — meaning the civil claim was bound to fail. The Court of Appeal declined to treat that complex statutory-interpretation / criminal-jurisdiction question as one suitable for dispositive treatment at certification. It was not plain and obvious that the s.36 cause of action disclosed no reasonable cause of action; the judge was entitled to defer definitive interpretation and resolution to later stages.

Why the decision matters (practical and doctrinal implications)

1. Affirms a generous territorial test at certification. The Court confirms that where foreign defendants’ products are alleged to have entered the forum through ordinary channels and caused loss to local purchasers, a “real and substantial connection” will frequently be found at the certification stage — even absent corporate or physical presence. This makes Canada (and BC in particular) hospitable to transnational antitrust / competition class claims where the injury is alleged to have been passed on to Canadian purchasers.
2. Limits the scope for early striking of competition claims on territorial grounds. The interplay between these statutory provisions raises difficult questions of statutory interpretation and criminal jurisdiction. The Court’s approach indicates such issues are generally unsuitable for summary dismissal at certification unless it is overwhelmingly clear the claim cannot succeed. This preserves plaintiffs’ ability to press complex cross-border competition claims through certification and into discovery and dispositive motions.
3. Implications for defendants’ forum-non-conveniens / jurisdictional strategies. Absent clear limiting facts, foreign defendants cannot easily defeat certification by asserting lack of territorial competence alone; defendants will likely need to engage more fully at the evidentiary stage or at trial.

Practical drafting and litigation tips

• Plead jurisdictional facts clearly. Allegations that products entered Canada through ordinary channels, that defendants knew or ought to have known their products would be sold here, and evidence of pass-through overcharges are critical.
• Use expert market evidence at certification. Economic or industry experts that can credibly explain distribution chains and foreseeability were central to the certification judge’s finding.
• Don’t expect a quick jurisdictional knockout. Defendants should weigh whether to contest jurisdiction at certification (often an uphill fight) vs. focusing on later-stage factual or legal motions where fuller records are available.
• Consider co-ordination / stay applications carefully. The judgment highlights that territorial competence is not easily displaced by the foreign location of the alleged wrongdoing alone; co-ordination and parallel proceedings strategy is therefore important.

Postscript — where the litigation went next

Leave to appeal to the Supreme Court of Canada has now been granted (2025 CanLII 116171). We will be watching this case closely. Once the Supreme Court releases its decision, readers can return to our blog for a full update and analysis.

Conclusion

NHK Spring v. Cheung offers an important glimpse into how Canadian Courts, and the BC courts in particular, treat territorial jurisdiction in complex transnational competition class actions. It underscores a permissive, evidence-driven approach at certification and a reluctance to resolve intricate statutory and criminal-jurisdiction questions on a truncated record. For plaintiffs, the decision reaffirms that well-pleaded jurisdictional facts and market evidence can secure certification against foreign defendants; for defendants, it signals that early dismissal on jurisdictional grounds will be difficult unless the case for lack of jurisdiction is truly compelling.