Supreme Court of Canada grants leave in appeal involving state immunity of international organizations

On April 26, 2012, the Supreme Court of Canada granted an application for leave to appeal in Tissa Amaratunga v. Northwest Atlantic Fisheries Organization, a body corporate (N.S.) (Civil) (By Leave) (34501) Coram: McLachlin / Rothstein / Moldaver [“Amaratunga“].

The appeal will consider the decision of the Nova Scotia Court of Appeal which explored the extent to which an international body—the Northwest Atlantic Fisheries Organization (“NAFO”) comprised of 13 signatories representing approximately two dozen independent countries, including Canada— should be bound by the laws of the jurisdiction where it carries on its activities.  It is the product of the 1978 Convention on Future Multilateral Cooperation in the Northwest Atlantic Fisheries, 1135 U.N.T.S.369 (1978), Can. T.S. 1979, No. 11. Headquartered in Dartmouth, Nova Scotia, its mandate is to manage and preserve fishing resources in the northwest Atlantic Ocean.

The appellant, Tissa Amaratunga, began working for NAFO at its headquarters in 1988 in a senior management position until June of 2005, when his employment was terminated.  He then commenced a wrongful dismissal suit against NAFO. NAFO claimed immunity from suit and sought a declaration based in part on an immunity order issued by the Government of Canada pursuant to the Privileges and Immunities (International Organizations) Act, R.S.C. 1985, c. P-22 (“PIA”).   This provision remains in effect pursuant to successor legislation, the Foreign Missions and International Organizations Act, S.C. 1991, c. 41 and is limited to situations where immunity is “required for the performance of [NAFO’s] functions” and incorporates provisions from the Convention on the Privileges and Immunities of the United Nations, 1 U.N.T.S. 15 (1946), Can T.S. 1948, No. 2 under s.3(1) which reads:

3(1) The Organization shall have in Canada the legal capacities of a body corporate and shall, to such extent as may be required for the performance of its functions, have the privileges and immunities set forth in Articles 11 and 111 of the Convention for the United Nations. [“UN Convention”]

Article ll, s.2 of the United Nations Convention provides:

The United Nations, its property and assets wherever located by whomsoever held, shall enjoy immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity …

 Wright, J. of the Supreme Court dismissed NAFO’s motion concluding that s. 3(1) was inapplicable because immunity from this particular suit was not “required for the performance of its functions”.

 The Nova Scotia Court  of Appeal reversed and held that the Nova Scotia Supreme Court committed reversible error by denying the declaration of immunity.  In considering competing expert opinions on the immunity issue, the Chief Justice writes,

[29]          Firstly, let me say that I agree with the judge’s rejection of Professor Morgan’s thesis that immunity should be granted to every action that would simply be “related to” the performance of NAFO’s function. Essentially such an interpretation would mean unlimited immunity for NAFO, thereby rendering s. 3(1) meaningless. For example, all of NAFO’s commercial activities, however routine, would clearly be seen as “related to” the performance of its functions. Consider, for example, something as basic as NAFO’s contracts with its suppliers. Surely, they would be “related to” NAFO’s functions.  Does that mean NAFO could refuse payment with immunity? I would think not. If it could, NAFO would certainly have a great deal of difficulty carrying on business with anyone. In short, the provision says “required” and even considering customary international law at its highest, I could not envisage such a broad interpretation.

[30]         In fact, even sovereign states have no immunity from suits involving their commercial activities. They are, by statute, specifically excepted. See:  State Immunity Act, R.S.C., 1985, c. S-18s. 5:

5.A foreign state is not immune from the jurisdiction of a court in any proceedings that relate to any commercial activity of the foreign state.

[31]         Surely, in this context, international organizations cannot be seen to be on a higher footing than sovereign states.

[32]         That said, in rejecting Professor Morgan’s thesis, the judge seems to have defaulted to the opposite end of the spectrum whereby immunity would be available only if the proposed suit would threaten NAFO’s operations. In my view, such an approach would be equally impractical and would render s. 3(1) far more restrictive than intended.

[33]         Here, NAFO cites an apt example. It involves its officials and their right to import personal belongings duty free; a right that no one would seriously challenge. Yet according to this interpretation, that right would appear illusory. NAFO explains it this way in its factum:

¶5 The section of the NAFO Immunity Order granting immunity must be read in the context of the NAFO Immunity Order as a whole. For example, section 3(3) of the NAFO Immunity Order says that:

… all officials of the Organization shall have in Canada, to such extent as may be required for the performance of their functions, the privileges and immunities set forth in Article V of the Convention for Officials of the United Nations.

Section 18(g) of Article V of the UN Convention provides that NAFO officials “have the right to import free of duty their furniture and effects at the time of first taking up their post in question”. It is respectfully submitted that a NAFO official could never show that immunity from import duties on furniture is necessary or essential to perform his functions. If s. 3(3) of the NAFO Immunity Order, which contains the same words as s. 3(1), was interpreted in the restrictive manner employed by the Learned Hearing Judge, NAFO Officials would never be immune from importation duties on furniture. If accepted, the Learned Hearing Judge’s interpretation of the word ”required” in the NAFO Immunity Order would render Parliament’s grant of immunity meaningless.

[34]         Therefore, in my respectful view, pragmatism prescribes an interpretation of s. 3(1) which would place immunity somewhere between these two divergent views.

 MacDonald J.A. further rejects the lower court’s finding that “just cause is not asserted by NAFO”, noting that “NAFO restricted its filed defence to the immunity argument in order to avoid attorning to the jurisdiction of the Supreme Court of Nova Scotia.  However, elsewhere in the record it is clear that NAFO did in fact assert just cause.” (at para. 51-52). Further in the reasons, the Chief Justice notes that “this suit would inevitably put NAFO’s core  operations under a microscope”, in light of Mr. Amaratunga’s claim for punitive damages, solicitor-client costs and the very nature of the claim which “is designed to focus on NAFO’s alleged misconduct.” (at para. 58).

Following a review of leading caselaw on state immunity, the Chief Justice concludes,

[74]         Therefore, one of the unfortunate consequences of immunity can be the absence of a legally enforceable remedy. That has been recognized by our courts on many occasions.  See: Re Canada Labour Code, supra at 91; Canada (House of Commons) v. Vaidsupra at para. 30; Trempe c. Assoc. du personnel de l’OACI, supra at para. 76 ; Bouzari v. Iran 2004 CanLII 871 (ON CA), (2003), 71 O.R. (3d) 675, 243 D.L.R. (4th) 406 (C.A.) at para. 102; and Arar v. Syria (Arab Republic)2005 CanLII 4945 (ON SC), (2005), 28 C.R. (6th) 187, 127 C.R.R. (2d) 252 (Ont. S.C.J.) at paras. 24-34.  Hopefully, however, that will not translate into no remedy at all. After all, if such international organizations are to attract domestic employees, they must earn a reputation of treating their employees fairly. NAFO would be no exception. Therefore, while I make no comment on the merits of this claim, I do note that initial offers have been made. I therefore trust that we will see a fair settlement.

Compare the Amaratunga decision with the recent Ontario labour arbitration decision in Zakhary v United States of America 2012 CanLII 15690 (ON LA) which addresses state immunity in the context of an unjust dismissal complaint filed under Section 240 of the Canada Labour Code and the Court of Appeal for Ontario decision in Bedessee Imports Ltd. v. Guyana Sugar Corporation, Inc., 2010 ONCA 719, applying Supreme Court of Canada’s recent decision in Kuwait Airways Corp. v. Iraq, 2010 SCC 40, which I discussed in my recent post: Rough Landing: Supreme Court of Canada ejects Iraq’s State Immunity Defence: Kuwait Airways Corp v. Iraq.

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One Response to “Supreme Court of Canada grants leave in appeal involving state immunity of international organizations”

  1. 2012-04-02 Grandparent’s Rights.wmv Says:

    […] libel tourism – Antonin I PribeticMediation must top agenda in family law cases, says judgeSupreme Court of Canada grants leave in appeal involving state immunity of international organizatio…The Supreme Court of Canada: internet defamation, choice of law and libel tourism – Antonin I […]

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