CANADA Law and Practice Contributed by: Rui Fernandes, Andrea Fernandes and Conal Calvert, Gardiner Roberts LLP
“46 (1) If a contract for the carriage of goods by water provides for the adjudication or arbitration of claims arising under the contract in a place other than Cana- da, a claimant may institute judicial or arbitral proceed- ings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada, if: (a) the actual port of loading or discharge, or the intended port of loading or discharge under the con- tract, is in Canada; (b) the person against whom the claim is made resides or has a place of business, branch or agency in Can- ada; or (c) the contract was made in Canada. (2) Notwithstanding subsection (1), the parties to a contract referred to in that subsection may, after a claim arises under the contract, designate the place where the claimant may institute judicial or arbitral proceedings.” Section 46 of the MLA does not define “a contract for the carriage of goods by water”. However, the courts have determined that the meaning can be imported from Article 1 (b) of the Hague-Visby Rules, which is incorporated into Canadian law by Section 43 of the MLA. Article 1 (b) of the Hague-Visby Rules defines that a contract of carriage applies only to contracts of carriage covered by a bill of lading or any similar document of title, in so far as such document relates to the carriage of goods by water, including any bill of lading or any similar document. The court will have to determine the true nature and effect of the ship - ping document in order to determine whether a stay of the proceedings in favour of another jurisdiction is appropriate. If the shipping document is determined to be akin to a waybill, then Section 46 of the MLA will not apply. See Arc-en-Ciel Produce Inc. v BF Leticia (Ship) [2023] 1 FCR 520. Where Section 46 of the MLA is not applicable, the courts will apply the “strong cause” test. The test requires that the court take into account all the cir - cumstances of the particular case. These include fac - tors such as:
• in what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial; • whether the law of the foreign court applies and, if so, whether it differs in any material respects; • what country either party is connected to, and how closely; • whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages; and • whether the plaintiffs would be prejudiced by hav - ing to sue in the foreign court because they would: (a) be deprived of security for that claim; (b) be unable to enforce any judgment obtained; (c) be faced with a time-bar not applicable in Canada; or (d) for political, racial, religious or other reasons be unlikely to get a fair trial. 7.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading Arbitration clauses are subject to the same judicial principles as jurisdiction clauses as well as Section 46 of the MLA. Arbitration clauses are enforceable in Canada. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) entered into force in Canada in 1986. Canada made one reservation – it applies only to commercial disputes, except in Quebec, which does not apply that commercial disputes limitation. Canada has implemented the New York Convention through the United Nations Foreign Arbitral Awards Convention Act 1985 and the Commercial Arbitration Act 1985. In addition, all provinces and territories in Canada have legislation giving domestic effect to the New York Convention for matters that fall under pro - vincial jurisdiction. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction The Federal Court of Canada will order the arrest of a vessel and permit attachment even when the under -
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