Editor's note: Alexandru Rares Tofan recently graduated with an LLM in
Transnational Law from King’s College London where he focused on international
human rights law, transnational litigation and international law. He is
currently an intern with the Doing Business Right
project at the Asser Institute in The Hague. He previously worked as a research
assistant at the Transnational Law Institute in London on several projects
pertaining to human rights, labour law and transnational corporate conduct.
Introduction
In 2014, three Eritrean refugees commenced
a representative action in British Columbia against the transnational
mining company ‘Nevsun Resources’, pleading both private law torts and
violations of customary international law. They alleged that they were subjected
to forced labour, slavery, torture, and crimes against humanity while working
at an Eritrean gold mine jointly owned by Nevsun (60%) and by the Eritrean
State (40%). The representative action was brought on behalf of over a thousand
people who had been drafted into the Eritrean National Service Programme (NSP) and
subsequently forced to work at the Bisha Mine. The NSP
is a governmental apparatus of indefinite and mandatory conscription that is fraught
with allegations
of forced labour and other human rights abuses.
It was established under the authoritarian
regime of President Isaias Afwerki who has been ruling Eritrea ever since
the country gained independence from Ethiopia in 1993. As Nevsun is incorporated
under the laws of British Columbia, the plaintiffs sought relief in the courts
of the Canadian province. Notwithstanding the defendant’s attempts to have the
proceeding stayed or dismissed, the action was allowed to go through both by
the Supreme
Court of British Columbia (BCSC) and the Court of
Appeals (BCCA). On 14 June 2018, the Supreme Court of Canada granted
Nevsun leave to appeal with a tentative hearing date set on 23 January
2019.
This proceeding raises complex issues of transnational law. The
plaintiffs are seeking redress in a jurisdiction that is neither the locus delicti nor their country of
nationality. Rather, the claimants argue that peremptory norms of customary
international law create a private law cause of action and a right to recover
damages under Canadian law. In point of fact, the plaintiffs have called
attention to several delicate questions. Firstly, can claims of damages arising
out of the alleged breach of jus cogens
norms form the basis of a civil proceeding? And are corporations bound by these
international law norms for that matter? The case is further layered by the involvement
of the State of Eritrea. Since Nevsun is argued to be derivatively liable, a
finding of guilt on its part would mean that the Canadian courts would be judging
the acts of another state. This engages the act of state doctrine, which
demands judicial abstention from adjudication of matters touching upon the
conduct of foreign states.
Nevsun filed four interlocutory applications seeking to have the
claim stayed, dismissed or struck out. This article traces the development of
this case through the first three objections to jurisdiction raised by Nevsun
and dismissed by the provincial courts: forum non conveniens, the act
of state doctrine and the lack
of corporate liability under customary international law. A
fourth application argued that the plaintiffs’ claims are not appropriately
brought as a representative action (i.e. class action). This application was
granted by the Supreme Court of British Columbia and was not appealed by the
plaintiffs.[1]
Forum Non Conveniens
The first objection to the jurisdiction of the Canadian
courts raised by Nevsun is forum non
conveniens.[2] This
common
law doctrine enables a court that has jurisdiction over a case to dismiss
or stay the proceeding if a more appropriate forum is available. The onus
generally falls on the defendant who has to prove that the alternate forum is comparatively
more appropriate and therefore preferable. Nevsun applied for a stay of
proceedings pursuant to Rule
21-8 (2) and S.
11 of the Court Jurisdiction and
Proceedings Transfer Act (CJPTA), alleging that the Eritrean courts are a
more appropriate forum for this action.[3]
It argued that Eritrea is the jurisdiction that has the closest connection with
the action, and that the comparative convenience and expense for the parties
and their witnesses overwhelmingly favours proceeding in Eritrea. Contrarily,
the plaintiffs argued that the case should proceed in British Columbia because
there is a real risk that justice will not be delivered in Eritrea.[4]
They claimed that the plaintiffs would face severe barriers to justice there
given their status as deserters, the lack of an independent judiciary and the
absence of an implemented constitution inter
alia. They further pointed out that
Eritrea is a dictatorial, one-party state where the rule of law is not in force.
The plaintiffs ultimately alleged that Nevsun is attempting to avoid all
judicial scrutiny by having the case tried in the very country that purportedly
violated their human rights.
The courts agreed with the plaintiffs.[5]
The BCSC found that although the practical and logistical difficulties of
hearing the claims in Canada were considerable, there was a real risk that the
plaintiffs would not get a fair trial in Eritrea. The court’s ratio decidendi was thus based on a
balancing of the various criteria contained in the CJPTA. It weighed the
expense, inconvenience and other difficulties of proceeding in Canada against
the chance that the plaintiffs may not get a trial at all. The court here
relied on various expert witnesses and secondary reports,[6]
which corroborated the plaintiffs’ fears that they cannot return to Eritrea and
obtain a fair trial against Nevsun in that forum. The expert testimony of Mr
Ghebremichael who formerly served as a judge in Eritrea stands out here. He
asserted that any judge hearing this case and ruling in favour of the
plaintiffs would be placing her career and personal safety in jeopardy. The
secondary reports from various NGOs and the US Department of State were also
unanimous in concluding that the plaintiffs would face real consequences if
they attempted to return to Eritrea. The BCSC thus concluded that there are
serious allegations made as to the integrity of the Eritrean judicial system
and that ‘it would defy common sense’ not to find that there is a real risk of
an unfair trial.[7]
The Court of Appeals of British Columbia did not find fault with the
BCSC’s rationale.[8] It
nevertheless highlighted the fact that it all boiled down to the onus.[9]
The court held that it was Nevsun’s task to prove that it would be fairer and
more efficient to depart from the normal state of affairs where jurisdiction is
exercised by the courts having territorial competence and where the plaintiffs
are entitled to select a forum. The BCCA concluded that ‘[...] the chambers judge did not err in principle, misapprehend or fail
to take into account material evidence or reach an unreasonable decision in
concluding that Nevsun had not met this onus, nor in concluding that a ‘real
risk’ of an unfair trial, should it occur in Eritrea, had been shown.’[10]
In upholding the BCSC’s dismissal of the forum application, the Court of
Appeals agreed that the difficulties of mounting a trial in British Columbia
are substantial. It nonetheless stressed that these difficulties are unrelated
to the fairness of the trial or the independence of the courts. This, paired
with the grave nature of the allegations, lessened the bearing of the
comparative inconvenience and expense. As Lord Bingham stated in Connelly (A.P) v RTZ Corp. Plc (No. 2),
the interests of justice tend to weigh in favour of the less appropriate but
fair and impartial forum rather than the one where justice seems unlikely to be
done.[11]
The forum application was therefore dismissed and the case was allowed to
proceed in British Columbia.
Act of State Doctrine
In the second interlocutory application, Nevsun motioned
that the plaintiffs’ claim should be dismissed because it depended on the
Canadian courts inquiring into the legality of the conduct of a foreign
sovereign state.[12] Nevsun
pleaded the act
of state doctrine (AOS), which is a judicial rule barring the courts of one
country from sitting in judgment of the acts of the government of another when
these acts are done within its own territory.[13]
On this basis, Nevsun argued that the court lacked subject matter jurisdiction
pursuant to Rule
21-8(1)(a) and (b) or, alternatively, that the claim disclosed no
reasonable cause of action pursuant to Rule
9-5 of the Supreme Court Civil Rules (SCCR). Nevsun further argued that this doctrine
applies despite the action not imputing blame directly on Eritrea. It claimed
that the case rests on the courts finding that the actions of the Eritrean
state amount to crimes against humanity and are contrary to international law. On
the other hand, the plaintiffs argued that it is uncertain whether this
doctrine forms part of the common law of Canada.[14]
They pointed out in this regard that the act of state doctrine has never been
applied by a Canadian court. In the alternative, the plaintiffs held that
several limitations apply including the public policy, Kirkpatrick and the commercial
activity limitations. They lastly emphasised the non-engagement of this
doctrine in cases involving allegations of serious human rights violations.
The British Columbia courts dismissed Nevsun’s application.[15]
They held that the act of state doctrine is not engaged in the case at hand and
that, even if it were, the public policy and Kirkpatrick limitations would
apply. The BCSC began its reasoning by acknowledging that this doctrine does
form part of the common law of the country despite its lack of usage and
clarity. In stating this, the BCSC relied on the 2015 case of United Mexican States v British Columbia
(Labour Relations Board) where Justice Harris specifically referred to the
doctrine. The court further reasoned that the well-established existence of
this doctrine in jurisdictions such as England and Australia exerts a pull
towards its recognition in Canada as well. The real weight of the court’s
analysis nevertheless fell on considering whether the doctrine was engaged,
whether its limitations apply and on the propriety of dismissing an action
without providing the plaintiffs the opportunity to prove their case.
Both the BCSC and the BCCA denied the applicability of the act of
state doctrine.[16] They
reasoned that the plaintiffs’ claims do not purport to challenge the legality
or validity of a foreign states’ laws. Rather, the courts reckoned that the
plaintiffs are only seeking redress for acts of Nevsun that do not form part of
Eritrean legislation or official policy. In other words, these acts are indeed linked
to wrongs alleged to have occurred in Eritrea but the lawfulness, validity,
effect of, or motives underlying, sovereign acts of Eritrea need not be
analysed.[17] The
courts emphasised that if the occurrence of these acts was proven as a matter
of fact, the only other step in the court’s analysis would be ascertaining
Nevsun’s complicity. The court therefore concluded that the AOS doctrine is not
engaged and, even if it is, its limitations would apply to the same effect. The
court here refers specifically to the public policy, Kirkpatrick and the
commercial activity limitations.
Firstly, the public policy limitation refers to the grave nature of
the wrongs, which would be unjustifiable regardless of their inclusion in any
legislation or official policy. The acts alleged here are contrary to both jus cogens norms and fundamental values
of Canadian law. The gravity of the acts thus limits the prohibition on
adjudication stemming from the AOS doctrine. Secondly, the Kirkpatrick
limitation refers to the distinction between mentioning acts of state as an
existential matter and, on the other hand, inquiring into them for the purposes
of adjudicating upon their legal effectiveness. The courts emphasised that the
plaintiffs’ claim merely requires the alleged conduct to be proven as an
existential matter. The only remaining step after that would be ascertaining
the complicity of Nevsun. The Kirkpatrick limitation would thus also limit the
application of the AOS doctrine. Thirdly, the commercial nature of the activity
could act as a constraint on the prohibition on adjudication. Nevertheless, the
BCSC stated that the pleadings and evidentiary record are insufficient to
determine the applicability of this limitation. The BCCA concurred and added
that the applicability of the two other limitations makes this inquiry unnecessary.
The act of state objection was therefore dismissed and the action
was allowed to proceed.
Customary International Law and Corporate Liability
In the third interlocutory application, Nevsun claimed that the
prohibitions recognised under customary international law do not give rise to a
private law cause of action for damages.[18]
It argued that these portions of the plaintiffs’ Notice
of Civil Claim should be struck out pursuant to Rule
9-5 SCCR as they disclose no reasonable claim, or are unnecessary. It
further argued that the CIL prohibitions do not impose obligations on
corporations and that holding otherwise would be contrary to fundamental
principles of international law as well as settled Canadian criminal and tort
law. Nevsun pointed out that these claims are plainly bad in law and that there
is no reasonable prospect they could succeed at trial. For these reasons, they asserted
that these allegations should be struck out in the interests of judicial
efficiency and fairness. Contrarily, the plaintiffs argued that prohibitive
rules of customary international law are to be incorporated into Canadian law
in the absence of conflicting legislation as per the doctrine of
adoption.[19]
They further alleged
that corporations do not enjoy blanket immunity from CIL but rather that there
has been judicial recognition that corporations may be subject to rights and
obligations under international law. Additionally, the plaintiffs argued that
the conditions for recognising new international torts are met. They lastly asserted
that these claims do have a reasonable chance of success and that they should
therefore not be dismissed at this stage of the proceeding. The BCSC concluded
that the CIL claims are arguable and that Nevsun has failed to establish that
they have no reasonable likelihood of success.[20]
It therefore dismissed Nevsun’s interlocutory application and allowed the claim
to proceed to trial.
Several important considerations drove the courts’ reasoning. From the outset, the BCSC stated that settled
case law demands an approach that is generous and that errs on the side of
permitting novel but arguable claims. The crux of the matter nevertheless fell
on whether the claims have a reasonable chance of success such that the
plaintiffs should not be driven from the judgment seat on a preliminary application.
Importantly, the court here did not need to decide whether these new torts
should be recognised. At this stage of the proceeding, it merely had to
establish that they were not bound to fail. Firstly, the court looked at the
history of corporate liability under international law and accepted the
plaintiffs’ submission that it is a complex and layered narrative as opposed to
a clear-cut issue.[21]
It also entertained Nevsun’s submissions as to the lack of international
recognition of corporate liability and the alleged absence of a uniform state
practice and opinio juris. Secondly,
the BCSC considered the limited competence of the judiciary in law-making,
which rather falls within the ambit of the legislature. In this sense, the
court was mindful that its role is to only incrementally advance the law so as
to keep it in step with evolving societal needs. Radical changes to the law,
however desirable, must be left to the parliament. Yet the BCSC reasoned that
the CIL application did not require it to decide on any of the substantive
issues raised by the parties; it solely needed to decide whether the claims are
arguable such that they have a reasonable chance of success at trial. Further,
the BCSC held that the uncertainty of the law on this point makes it that much
more important that these claims go to trial. The court here cited Justice
Wilson in the Hunt v Carey Canada, Inc. case, which asserted that it is much
more critical that an action be allowed to proceed when it reveals arguable,
difficult or important points of law.
On appeal, the BCCA agreed that there are significant legal
obstacles to these claims.[22]
The court here particularly referred to legitimate concerns about comity and
sovereign equality, and the role of the judiciary as opposed to the
legislature. It nevertheless also stated that the recognition of a CIL norm
against torture as the basis for a private law claim ‘[...] would [not] bring the entire system of international law crashing
down [...]’.[23]
In reaching this conclusion, the BCCA relied on the fact that no state is a
party to this proceeding, that Eritrea is fully protected by state immunity and
that these CIL norms at issue here are universally accepted. The court further
emphasised that international law is in flux and that transnational law is
developing especially in connection to human rights violations that escape
current international mechanisms. It also observed here that other
jurisdictions have been willing to hold corporate actors accountable for
violations of jus cogens norms. [24]
On these considerations, the BCCA concluded that the BCSC had not
erred in dismissing Nevsun’s CIL application.[25]
The court therefore held that the claims should proceed in British Columbia as
pleaded.
Conclusion
The Araya v Nevsun
case plays into a discussion that goes to the very nature of transnational and
international law, and their place in national courts. As Lord Lloyd Jones
aptly observes in the UK case of Belhaj v Straw,[26]
the evolution of public international law beyond a mere inter-state system of
law has brought with it a corresponding shift in international public policy.
This is reflected in the growing willingness on the part of national courts to
address and investigate the conduct of foreign states and issues of public
international law.[27] Mindful of this wider context, the Court of
Appeals of British Columbia began its judgment in the Araya case by asking one overarching question - should the Canadian
courts participate in the incremental development of transnational law or
should they remain on the traditional path of judicial abstention from
adjudication of matters touching on the conduct of foreign states?[28]
This question is now before the Supreme Court of Canada, which is presented
with an important chance to offer guidance on the role of national courts in this
regard.[29]
On the other hand, one should be mindful of what this case means in
terms of access to justice in business and human rights disputes. The
plaintiffs filed the initial notice of civil claim in 2014 and four years later
they have only incrementally approached redress. The Canadian Supreme Court’s
judgment will not come before the second half of 2019 at which point, if
successful, the plaintiffs are facing several more years litigating the merits
of the case. The elusive nature of
accountability and remedy in this type of cases is nevertheless not a novelty.[30]
As the UN High Commissioner for Human Rights affirmed in a 2016 report,
those seeking to use judicial mechanisms to obtain a remedy for corporate human
rights abuses face numerous challenges. These claims often fail to proceed to
judgment and, when they do, they encounter a system of domestic law that is
patchy, unpredictable, often ineffective and fragile.[31]
The Canadian courts’ approach in this case is relatively amicable to the
claimants and opens the door for a stricter interpretation of the traditional
hurdles to jurisdiction in business and human rights cases. Nonetheless, the Araya v Nevsun case illustrates the fact
that victims seeking redress for corporate human rights abuses face an uphill
battle.
[31] Ibid para. 4.