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Tanya J. Monestier, “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada”

May 10, 2013

Tanya J. Monestier (Roger Williams University School of Law) has published “(Still) a ‘Real and Substantial’ Mess: The Law of Jurisdiction in Canada”, Fordham International Law Journal, Vol. 36, p. 397, 2013/Roger Williams Univ. Legal Studies Paper No. 136. The abstract reads:

In April 2012, the Supreme Court of Canada released the most important decision on personal jurisdiction in over twenty years. The Van Breda decision was intended to clarify, once and for all, the application of the “real and substantial connection” test to ex juris defendants. The Supreme Court in Van Breda adopted an approach to the real and substantial connection test that relied on the plaintiff fitting himself within one of four presumptive factors in order to establish jurisdiction: (a) The defendant is domiciled or resident in the province; (b) The defendant carries on business in the province; (c) The tort was committed in the province; (d) A contract connected with the dispute was made in the province. The Court also left open the possibility of creating additional presumptive factors in the future. The presumptive factors approach was intended to re-orient the jurisdictional test toward objective factual connections between the forum and the cause of action and to establish a simple and predictable framework for courts to use in making jurisdictional determinations. In this Article, I comprehensively examine the new presumptive factors approach to jurisdiction adopted by the Supreme Court in Van Breda with a view to exposing its shortcomings. I argue that this approach to jurisdiction – while simple and predictable on its face – will actually complicate jurisdictional determinations for the foreseeable future. Litigants will try to find creative ways to fit themselves within one of these four factors. And courts will spend years unpacking and defining the contours of the four presumptive factors. I also argue that the Court in Van Breda failed to provide meaningful guidance on how all pieces of the jurisdictional puzzle fit together. Among the outstanding questions: How does the real and substantial connection test work in non-tort cases? How do the traditional jurisdictional bases of consent and presence fit into the jurisdictional mix? Can the forum of necessity doctrine be reconciled with the real and substantial connection test? How does the test apply to the enforcement of foreign judgments? The Court simply left these hard questions until later. In short, while the Court in Van Breda was on the right track, it got derailed – which may ultimately mean another twenty years until the outstanding jurisdictional issues are sorted out.

Download a copy of the article at SSRN here.

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Posted in Adjudicative Jurisdiction, assumed jurisdiction, Charron Estate, civil jurisdiction, Civil Litigation, civil procedure, forum non conveniens, International, international commercial litigation, international dispute resolution, international law, international litigation, jurisdiction, jurisdiction simpliciter, personal jurisdiction, subject-matter jurisdiction, Supreme Court of Canada, Tanya J. Monestier, Territorial Jurisdiction, Van Breda, Van Breda v. Village Resorts Ltd. | Leave a Comment »

SCOTUS rejects extraterritorial application of ATS in Kiobel v. Royal Dutch Petroleum Co.

April 17, 2013

The U.S. Supreme Court today released a significant decision on personal jurisdiction in Kiobel v. Royal Dutch Petroleum Co. (No. 10–1491, slip opinion: link). (backgrounder here and here).

The Court unanimously denied the appeal. (more…)

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Posted in Federal, federal courts, federal law, forum non conveniens, forum of necessity, in personam jurisdiction, international human rights, international law, international litigation, jurisdiction, jus cogens, Kiobel v. Royal Dutch Petroleum, SCOTUS, United States, United States Supreme Court | 3 Comments »

Alan Scott Rau on “Arbitrating ‘Arbitrability’”

April 16, 2013

Alan Scott Rau (University of Texas at Austin School of Law, The Center for Global Energy, International Arbitration, and Environmental Law) has posted “Arbitrating ‘Arbitrability‘”, World Arbitration and Mediation Review, 2013/U of Texas Law, Public Law Research Paper No. 403.  The abstract reads:

This paper was prepared for a presentation at the Institute for Transnational Arbitration/American Society of International Law program on “Gateway Issues in International Arbitration.”

It is quite common, in the case law and the secondary literature, to focus discussions in terms of “gateway” or “threshold” challenges to the arbitration of a commercial dispute. Like most metaphors, this is rife with ambiguity: The notion of a “gateway” may, purely as a semantic matter, direct us to distinguish between issues that must be resolved before a party can be permitted to proceed and fully adjudicate the “merits” of the dispute — issues that may after all include such things as the non-payment of fees, or the untimely making of an application — and those that need not be. Or alternatively, it may ask us to distinguish between issues that must be resolved before a party may even invoke arbitral jurisdiction — and those that may instead be left to the arbitrators themselves. And even within this second category, it is still frequently unclear whether: (1) the metaphor of a “gateway” is being used to evoke what is a logically prior prerequisite to arbitral jurisdiction — asking us, that is, to distinguish between those issues that (whenever raised) will condition the ultimate validity of an award — and those that do not; or whether (2) the term is being used, instead, to evoke what is merely chronologically prior to arbitral proceedings — asking us, that is, to distinguish between those issues that (whoever will have the final word on the subject) must be resolved before a party is permitted even to have access to the arbitral tribunal — and those that need not be.

These last two questions are often conflated, but ought best be kept distinct. I discuss the question of timing and chronology, which is largely a matter of efficiency, but only the former question, I think, is truly challenging. The inquiry is thus into the allocation of decisionmaking authority between courts and arbitrators. This question — the respective roles of courts and arbitral tribunals — is, in one form or another, the foundational, primal question around which our whole law of arbitration revolves.

It is obligatory these days to begin and end every discussion with the Supreme Court’s decision in First Options, and in particular Justice Breyer’s suggestion there that parties may entrust arbitrators with the power to decide jurisdictional questions — and if they have done so “clearly and unmistakably,” the tribunal’s decision on the subject will be entitled to the same deference as is any arbitral award. It seems fair to say that Justice Breyer’s discussion has often been overread. And in practice, and in positive law, the supposed lessons have now become marginalized — have dwindled into insignificance — to the point that to invoke them begins increasingly to sound hollow and perfunctory. This is why any requirement of “clear statement” — even if in theory made necessary by Justice Breyer’s taxonomy — is here so routinely and trivially satisfied.

This impression is reinforced by the common practice of fleshing out agreement through the use of institutional rules. Contractual incorporation of the Rules of the AAA — adopted precisely to take advantage of the hint dropped by Justice Breyer — is now routinely deemed to constitute party agreement to the arbitrability of “jurisdictional disputes.” This common reading has now become a default rule that treats a reference to the Rules as a simple “term of art” denoting the choice of a particular scheme for the allocation of power. And while the backstory, and the preconceptions, underlying other commonly-used bodies of institutional rules are entirely different, it was inevitable that U.S. courts have been led to treat all these facially-similar rules as identical.

If this is troubling in theory, one cannot avoid the impression that it doesn’t seem to make much of a difference in result. The point is illustrated nicely by two very recent decisions of our Second Circuit, the Thai-Lao and Schneider/Kingdom of Thailand cases. Reading them, it is hard to avoid the conclusion that in where U.S. arbitration law appropriately governs the agreement, the rules of arbitral institutions — however they are construed — are as likely as not to amount to a makeweight; it does no great harm to assume that they may be properly treated in the end as tangential to any actual decision. What seems “overdetermined” is that even if the challenges in such cases — such as the right of a non-signatory to compel arbitration, or the existence of an approved investment under a BIT — is somehow to be construed as “jurisdictional” (which I very much doubt) — U.S. law will properly, and through a default rule methodology, allocate the decision to arbitrators. The implication is that even transnational cases will be expected to remain within the framework of the present complex structure of our common law — notwithstanding the siren calls of “international consensus.”

 A pdf copy of the article is available for download via SSRN here.

Related articles

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Posted in ADR, arbitrability, arbitration, Arbitration Act, arbitration clause, consent, Dispute Resolution, international commercial arbitration, international dispute resolution, international law, jurisdiction | Leave a Comment »

Ontario Court of Appeal: Jurisdiction Simpliciter Established by Defendant’s Residence in Ontario and Attornment

February 26, 2013
Court of Appeal window

Court of Appeal window (Photo credit: lancea)

The Court of Appeal for Ontario in Zhang v. Hua Hai Li Steel Pipe Co. Ltd., 2013 ONCA 103 (CanLII), has reaffirmed that jurisdiction simpliciter is established by presence-based jurisdiction and consent-based jurisdiction (delivery of a Statement of Defence and other merit-based steps constitute attornment):

[5]         In our view, the appeal should be dismissed but for reasons different from those given by the motion judge.

[6]         This is not a jurisdictional case.  The respondents live and were served in Ontario and the Ontario courts accordingly have jurisdiction.  It is also significant that before the respondents brought the motion challenging the jurisdiction of the court, the appellants filed a statement of defence and took other steps in connection with the action.  Even if the appellants had not been served within Ontario, they have attorned to the jurisdiction.

[7]         The forum non conveniens issue is not relevant.

[8]         We see no merit in this appeal and it is therefore dismissed.

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Posted in attornment, consent-based jurisdiction, International, international commercial litigation, international debt recovery, international dispute resolution, international law, jurisdiction, jurisdiction simpliciter, presence-based jurisdiction, Rules of Civil Procedure | Leave a Comment »

Here Today, Guatemala: HudBay Minerals withdraws forum non conveniens motion in Canadian international human rights case

February 26, 2013

Photo of Angelica Choc, Adolfo Ich Chamán’s widow. (Dec. 1, 2010) Original image via mimundo.org.

Jeff Gray at the Globe & Mail, reports on three pending cases involving HudBay Minerals Inc. ["HudBay"] brought by Mayan Q’eqchi’ individuals from Guatemala, who have alleged human rights abuses were committed against them by the subsidiaries of Canadian mining companies. The Guatemalan victims claim that security guards employed by HudBay’s subsidiary at a Guatemalan mine shot and killed one man, shot and beat another and gang-raped 11 women. According to the story, HudBay has withdrawn its motion to stay the action on forum non conveniens grounds, which plaintiffs’ counsel describes as a “breakthrough”:

[Plaintiffs' counsel] Mr. Klippenstein is pursuing a $55-million claim in Ontario Superior Court over clashes in 2009 between local Mayan people opposing the mine and security and police allegedly acting on behalf of HudBay’s former local subsidiary. HudBay, which sold its interest in the mine in 2011, denies the allegations, saying they are “without merit.”

HudBay had been preparing to argue that the case should be heard in Guatemala, not Canada, on jurisdictional grounds – an argument that Mr. Klippenstein was expected to counter by pointing to well-documented problems with the small Latin American country’s justice system.

But Mr. Klippenstein claims the company abruptly changed its strategy after hearing depositions from his clients, who flew to Toronto from Guatelmala in December.

The Globe & Mail article adds:

“Contrary to Mr. Klippenstein’s statement, HudBay’s voluntary decision to have the cases heard in the Ontario Superior Court was based on its desire to avoid the complications of trying the cases in Guatemala, particularly in terms of time and travel,” HudBay John Vincic, HudBay’s vice-president of investor relations and corporate communications, said in an e-mail.

“Our decision does not create precedent or change the law in any way. Based on the cross-examinations referred to by Mr. Klippenstein, HudBay is increasingly confident the cases are without merit and will be favourably resolved on the merits in Ontario.”

Recently, Madam Justice Carol J. Brown granted Amnesty International intervenor status in Choc v. Hudbay Minerals Inc. et al., 2013 ONSC 998 (CanLII). Carol J. Brown, J.  concludes:

[12]           I am satisfied that Amnesty has discharged its onus to establish that its presence can assist the court in determining certain of the issues in the motions, and in bringing to the attention of the court considerations of an international nature regarding the issues in play in these cases. I am satisfied that it can bring a perspective different from that of the parties, particularly given its expertise in the areas of international human rights abuse, international and transnational business accountability, and as a result of its involvement in and consultation with the UN Special Representative on the Issue of Human Rights and Transnational Corporations. Given that Amnesty International will not be involved in any of the evidentiary or factual aspects of the cases, I do not find that intervention by Amnesty will cause undue disruption or delay in the motions. Given that Amnesty will only be involved in providing a different view with respect to the legal considerations to be had in determining the issues in the motions, there will be no opportunity for it to use these motions as a “political platform” as argued by the defendants. While the actions involve private disputes, namely actions involving individuals and an international Corporation, with operations in the plaintiffs’ home state, the issues involved have international, transnational and public policy overlays which make them appropriate for intervention by Amnesty, which, I find, can make a useful legal contribution.

[13]           Considering the issues raised in the pleadings, the nature of the three cases, and the nature of the interventions sought to be made by Amnesty, I grant leave to Amnesty to intervene. The intervention will be limited strictly to making submissions with respect to the issues of law, and particularly international law, standards and norms concerning the existence or scope of the duty of care.

The timing of the withdrawal of HudBay’s forum non conveniens motion is intriguing; but it may also have something to do with focusing arguments around ‘reverse veil piercing’ raised in Chevron/Lago Agrio enforcement proceedings in Ontario and elsewhere. Nevertheless, the defendants’ Rule 21 motion to dismiss the claims against them as disclosing no reasonable cause of action will proceed on March 4 and 5, 2013.

Stay tuned.

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Posted in Amnesty International, choice of forum, foreign plaintiffs, forum non conveniens, forum of necessity, Forum Shopping, Guatemala, HudBay Minerals Inc., international human rights, international law, jurisdiction, jurisdiction simpliciter, Mayan Q’eqchi’ | Leave a Comment »

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