CANADA Law and Practice Contributed by: Chris McKibbin, Avi Sharabi, Alex Valova and Douglas Treilhard, Stieber Berlach LLP
in agreements negotiated by sophisticated commer- cial parties. Courts analyse such clauses using the same contractual principles that apply to forum selec- tion clauses more generally. In the commercial insurance context, Canadian courts recognise that certainty and predictability are impor- tant objectives. As a result, courts commonly enforce jurisdiction clauses in disputes involving reinsurance, marine insurance, aviation insurance, energy risks, financial lines policies and other large commercial risks. These sectors often involve multijurisdictional insurance programmes and cross-border risks, mak- ing contractual certainty regarding forum and govern- ing law particularly important. Jurisdiction clauses are less frequently litigated in personal lines insurance. Most disputes involving homeowner, automobile and other consumer insur- ance products are governed by provincial insurance legislation and are typically resolved in the province where the insured risk is located. 2.3 Cross-Border Disputes and Conflicts Issues Conflicts of jurisdiction and choice of law in cross-bor- der insurance disputes are resolved using established Canadian private international law principles. Where applicable, these are supplemented by contractual governing-law and jurisdiction clauses. Canadian courts generally give effect to the parties’ contractual choices. In their absence, courts determine the gov- erning law by identifying the jurisdiction with the clos- est and most substantial connection to the contract and the dispute. In cross-border insurance litigation, courts often con- sider factors such as: • the location of the insured risk; • the parties’ residence or place of business; • where the policy was issued or negotiated;
mercial losses may involve insureds operating in sev- eral countries, policies issued through multinational insurance programmes, layers of primary and excess coverage written by insurers in different jurisdictions and underlying litigation proceeding elsewhere. In addition, cyber incidents often involve data, systems, claimants and regulatory investigations located in multiple jurisdictions simultaneously. These circum- stances can create disputes regarding which court should hear the matter, which law governs the inter- pretation of the policy and whether parallel proceed- ings should be permitted to continue. Careful drafting of governing-law and jurisdiction clauses remains an important risk-management tool in both insurance and reinsurance contracts. 2.4 Anti-Suit Injunctions Where proceedings are commenced in breach of an exclusive jurisdiction clause, Canadian courts will typ- ically consider whether the clause is valid, applicable to the dispute and clearly expresses the parties’ inten- tion that disputes be resolved in the designated forum. If those conditions are met, a stay of the Canadian proceeding will often be granted unless the plaintiff establishes strong reasons why the clause should not be enforced. Relevant considerations may include the interests of justice, unfairness, public policy concerns or mandatory statutory rights that enforcement would undermine. Canadian courts adopt a similarly pro-enforcement approach to arbitration agreements. Courts generally refer parties to arbitration where a valid arbitration agreement exists and questions concerning juris- diction are at least arguable. Challenges to arbitral jurisdiction are therefore frequently left to the arbitral tribunal in the first instance. Anti-suit injunctions are available in Canada but remain an exceptional remedy. Canadian courts are generally cautious about restraining proceedings in foreign jurisdictions. They will usually do so only where continuation of the foreign proceeding would be clearly inconsistent with the parties’ contractual commitments or would otherwise constitute a seri- ous affront to the administration of justice. In practice, courts often prefer to enforce exclusive jurisdiction or
• where premiums were paid; and • where claims are administered.
Practical challenges frequently arise because modern insurance programmes often insure risks, operations or losses spanning multiple jurisdictions. Large com-
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