CANADA Law and Practice Contributed by: Rui Fernandes, Andrea Fernandes and Conal Calvert, Gardiner Roberts LLP
lying dispute is subject to a foreign arbitration or for - eign court pursuant to a bill of lading or charterparty clause. While the Court may stay the substantive proceedings in favour of the designated foreign tribu - nal, it will typically maintain the arrest or security to safeguard the claimant’s interests while the dispute is resolved elsewhere. 7.5 Domestic Arbitration Institutes Canada does not have a domestic arbitration institute that specialises in maritime claims. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses Where proceedings are commenced in breach of a foreign jurisdiction or arbitration clause, the defendant can apply to the court for a stay of the proceedings. Under Section 50 (1) of the Federal Courts Act 1985, the Federal Court of Appeal or the Federal Court may, in its discretion, stay proceedings in any cause or mat - ter (i) on the ground that the claim is being proceeded with in another court or jurisdiction; or (ii) where for any other reason it is in the interest of justice that the proceedings be stayed. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Tax relief for income earned by vessel owners pri - marily involves exemptions for international shipping income for non-residents whose country extends a similar exemption to Canadian companies. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration The application of force majeure is contract driven and is dependent on the force majeure clause. Typically, the party invoking force majeure must demonstrate that the event was beyond its control. Frustration is a common law principle which applies when in the
circumstances performance of the contract is impos - sible. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil Canada has fully implemented the IMO 2020 rule. Transport Canada is responsible for monitoring and enforcement actions. There are a number of enforce - ment actions every year in Canada. 9.3 Trade Sanctions Canada recognises international trade sanctions under the United Nations Act and the Special Eco - nomic Measures Act. For example, under these laws there are sanctions linked to Russia’s ongoing viola - tions of Ukraine’s sovereignty. Individuals have been sanctioned. See, for example, Makarov v Canada (Foreign Affairs) , 2025 FCA 223. Canada has a formal mechanism to authorise financial transactions or other dealings that are otherwise prohibited under its sanc - tions regime. The Minister of Foreign Affairs may issue permits or certificates to activities and transactions. Permits and certificates are granted on an exceptional basis. 9.4 International Conflict Given its geographic location, there have not been any direct impacts of ongoing global conflicts in Canada outside the trade sanctions arising from the Russian invasion of Ukraine. Canada has imposed sanctions against a number of countries, organisations and individuals. Indirect impacts from delays are present. There have not been any recent cases in Canadian courts showing the impact of international conflicts on Canadian shipping. 10. Additional Maritime or Shipping Issues 10.1 Other Jurisdiction-Specific Shipping and Maritime Issues The following points are worth noting. • Employment law for interprovincial or international shipping for companies operating in Canada is governed by the Canada Labour Code.
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