Posts Tagged ‘Mexico’

Ontario plaintiff’s claim against Mexican hotel for ATV accident stayed for lack of jurisdiction

October 24, 2013
Image via Daryl Cagle's The Cagle Post, Cartoons and Commentary

Image via Daryl Cagle’s The Cagle Post, Cartoons and Commentary

In Haufler v. Hotel Riu Palace Cabo San Lucas, 2013 ONSC 6044 (CanLII),  the Plaintiff was injured while riding an all-terrain vehicle (ATV) . She was immediately flown back to Canada for treatment.  The Plaintiff then sued the ATV excursion operator in negligence, but the company is bankrupt. The Plaintiff also sued the Hotel Riu Palace Cabo San Luca [the "Hotel Riu"] where the Plaintiff and the other vacationers stayed during the tragic Mexican vacation. The Hotel Riu then moved for a stay of the action based upon lack of jurisdiction simpliciter, or, alternatively, Ontario was forum non conveniens.

The case is unremarkable, except for the fact that it languished for seven years, while the parties awaited the Supreme Court of Canada’s decision in Club Resorts Limited v. Van Breda.[1], which established a refined test for the assumption of jurisdiction based on a “real and substantial” connection between the foreign defendant and the forum asserting jurisdiction., requiring the plaintiff to demonstrate the existence of one of four rebuttable presumptive connecting factors before a Canadian court will assume jurisdiction over an action involving a foreign defendant.

Quigley J. rejected  the Plaintiff’s claim that the Hotel carried on business in Canada, either on its own, or through agency relationships, noting that even if the Hotel: “…engaged in a considerable amount of business with Ontarians, the existing legal relationships between the Hotel, the owner of the Hotel,  and Sunquest Tours at the end of the line in Canada are not sufficient to establish that the Hotel carries on business in Ontario.” (at para. 7).

The Plaintiff’s arguments to establish a virtual connection to Ontario based upon advertising brochures, physical presence of some Hotel Riu representatives in Ontario, or website advertising also failed.

Quigley J. concludes:

[76]         In conclusion, on this aspect of the motion, I agree with the moving party, the Hotel, that there is virtually no connection to Ontario in this case. The tort action itself involves the alleged negligent operation of an ATV excursion in Mexico by a Mexican entity that offered the excursion in Mexico, Rancho Tours. In its action, the plaintiffs seek to attach legal responsibility for those events to this foreign defendant, the Hotel. Plainly the tort did not take place in Ontario, and the Hotel is a resident and domiciliary of Mexico. As such, Ontario could only assume jurisdiction over this litigation under the test established in Van Breda provided one of the two remaining connecting factors applied. In order for either of those two factors to apply, a contract entered into in Ontario regarding the subject matter of this litigation would have to exist, or there would need to be evidence that the Hotel was carrying on business in Ontario.

[77]         However, as the foregoing analysis shows, the only contracts of relevance here were made in Mexico. There was no contract concluded in Ontario between the Hotel and these plaintiffs. Their contract was with an independent third-party, Thomas Cook or its Sunquest Vacations alter ego. Further to this, the plaintiffs have failed to discharge the burden that rests upon them alone to show on the evidence that the Hotel carries on business in Ontario. At most, as the defendants argued, a separate company which markets the Riu trademark does occasional business with the Canadian business, Thomas Cook. But even this cannot provide the necessary connection as any existing connection is unrelated to the subject matter of the litigation. Given the absence of any of the four connecting factors required by Van Breda, Ontario cannot assume jurisdiction over this litigation and the motion to stay this action is therefore granted.

Supreme Court of Canada denies leave to appeal in Mexico v. Cargill, Incorporated

May 10, 2012

A North American Free Trade Agreement (NAFTA) ...

I previously blogged about the the Court of Appeal for Ontario decision in Mexico v. Cargill, Incorporated2011 ONCA 622 which held that the standard of review from a NAFTA trade tribunal arbitral decision is correctness.

Today, the Supreme Court of Canada denied the application for leave to appeal filed by the United Mexican States:

“United Mexican States v. Cargill, Incorporated (Ont.) (Civil) (By Leave) (34559)

(The application for leave to appeal is dismissed with costs to the respondent. /

La demande d’autorisation d’appel est rejetée avec dépens en faveur de l’intimée.)

Coram: Deschamps / Fish / Karakatsanis”

Standard of Review of NAFTA Tribunal Award is Correctness

October 4, 2011

Mexico v. Cargill, Incorporated2011 ONCA 622 is an Ontario Court of Appeal decision addressing the standard of review from a NAFTA trade tribunal arbitral decision.

After Mexico took measures to protect its sugar industry from competition from imported high fructose corn syrup (HFCS), Cargill, Incorporated, a U.S. producer of HFCS, and its Mexican subsidiary distributor, Cargill de Mexico S.A. de C.V. (CdM) sought arbitration for breaches of Chapter 11 of the North American Free Trade Agreement Between the Government of Canada, the Government of Mexico and the Government of the United States, 17 December 1992, Can. T.S. 1994 No. 2 (NAFTA), and an award of damages for those breaches.

The arbitration panel, acknowledging under Chapter 11 of the NAFTA that an award of damages could only encompass Cargill’s losses suffered “by reason of, or arising out of” Mexico’s breaches of Chapter 11 affecting Cargill’s Mexican investment, namely CdM, nevertheless awarded damages to include both CdM’s lost sales, as well as Cargill’s lost sales of HFCS to CdM. The application judge dismissed the application challenging the award.

The issues on appeal were the appropriate standard of review and whether the latter award to Cargill was subject to being set aside by the reviewing court on the basis that it “deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration”.  In lengthy reasons, the Court dismissed the appeal and held that the standard is correctness. Finlayson, J.A. writing for the appeal panel concludes:

[42]         I conclude that the standard of review of the award the court is to apply is correctness, in the sense that the tribunal had to be correct in its determination that it had the ability to make the decision it made.

[52]         To summarize my approach, the role of the reviewing court is to identify and narrowly define any true question of jurisdiction. Specifically, under Article 34(2)(a)(iiii), did the tribunal decide an issue that was not part of the submission to arbitration, or misinterpret its authority under the NAFTA? Another way to define the proper approach is to ask the following three questions:

·        What was the issue that the tribunal decided?

·        Was that issue within the submission to arbitration made under Chapter 11 of the NAFTA?

·        Is there anything in the NAFTA, properly interpreted, that precluded the tribunal from making the award it made?

[53]         The role of the reviewing court is to identify and narrowly define any true question of jurisdiction. The onus is on the party that challenges the award. Where the court is satisfied that there is an identified true question of jurisdiction, the tribunal had to be correct in its assumption of jurisdiction to decide the particular question it accepted and it is up to the court to determine whether it was. In assessing whether the tribunal exceeded the scope of the terms of jurisdiction, the court is to avoid a review of the merits.


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