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OT Africa Line Ltd. v. Magic Sportswear Corp., 2006 FCA 284 (CanLII)

Fasken
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OT Africa Line Ltd. v. Magic Sportswear Corp., 2006 FCA 284 (CanLII) On August 23, 2006, the Federal Court of Appeal released its decision in OT Africa Line, et al. v. Magic Sportswear Corp, et al., with major implications for admiralty law. The decision provides a comprehensive analysis of the law of forum conveniens and its interaction with foreign anti-suit injunctions. The case involved a shipment from New York City to West Africa. The shipping company's agent in Toronto negotiated the contract of carriage with the carrier through its Toronto office, where the bill of lading was issued. The plaintiffs alleged a shortage when the shipment arrived and commenced a claim in the Federal Court, despite the fact that the bill of lading specified that any claim had to be commenced in the High Court in London. Their basis for asserting the claim in Canada was a provision of the new Marine Liability Act, which substantially broadened the power of the Federal Court to assume jurisdiction over cases that have some minimal connection to Canada. On behalf of the defendant shipping company, Bill Hourigan and Robin Roddey of Fasken Martineau moved to stay the Canadian action. The firm's instructing counsel in the UK moved before the English High Court and was successful in obtaining an anti-suit injunction. That decision was appealed and affirmed by the English Court of Appeal. The House of Lords did not grant leave. On the stay motion before the Federal Court prothonotary, the plaintiffs took the position that the Marine Liability Act required the Federal Court to assume jurisdiction given that the shipment was contracted for in Toronto. Hourigan and Roddey argued that the new Act granted the court jurisdiction simpliciter and that it negatived the almost conclusive nature of the forum selection clause, but that the court still retained its inherent power to control its own process and to stay a case where appropriate. The prothonotary accepted our argument that the court retained a residual power to stay proceedings in appropriate cases, and that the Marine Liability Act did not obligate the court to exercise jurisdiction. However, applying a conventional forum conveniens analysis, the prothonotary held that the case should proceed in Canada. Specifically, the court held that notwithstanding the forum selection clause and the anti-suit injunction issued by the English court, the defendants had failed to demonstrate that England was a clearly more appropriate forum for the resolution of the parties' dispute. That decision was affirmed on appeal. Both decisions attracted great interest among the admiralty bar. Although the defendant's request for a stay of proceedings had been dismissed, the finding that the court retained a residual discretion to stay proceedings in the face of the Marine Liability Act attracted widespread criticism. On the appeal at the Federal Court of Appeal, the decision of the prothonotary was overturned. In a lengthy decision by Justice Evans, the court again accepted Fasken Martineau's submissions that the Marine Liability Act did not prevent the court from controlling its own process and granting a stay where appropriate. Unlike the courts below, however, Evans J.A. went on to hold that on forum conveniens grounds, the case should proceed in England and not in Canada. Justice Evans held that the prothonotary and the Trial Division judge had failed to give adequate weight to the parties' choice of forum, the assumption of jurisdiction by the English court and the anti-suit injunction issued by that court. On the grounds of international comity, the avoidance of parallel proceedings, and practical concerns about the eventual enforceability of any judgment rendered, it was necessary to give significant weight to the English proceedings in determining whether it was appropriate to allow the Canadian action to continue.  

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