By: Jacqueline Ting
Canadian multinational corporations may have to be more diligent when it comes to suspicious dealings between their subsidiaries and foreign officials, governments, and other companies abroad. In Araya v Nevsun Resources Ltd, a groundbreaking decision released October 2016, Mr. Justice Abrioux of the British Columbia Supreme Court held that victims of human rights abuses committed by corporations abroad may be able to sue for a tort based on customary international law (“CIL”). Justice Abrioux dismissed the application of Nevsun Resources (“Nevsun”), a British Columbia-based company, to strike the claims of the three Eritrean nationals. The plaintiffs allege that they were subject to forced labour and torture at the Bisha mine in Eritrea, which Nevsun partially owns. While the case is currently on appeal, in the meantime, this decision could usher in a new age of transnational civil litigation.
II. The Facts
The Eritrean plaintiffs, Gize Yebeyo Araya, Kesete Tekle Fshazion, and Mihretab Yemane Tekle, are refugees in Canada and are alleged to have been conscripted into the Eritrean National Service Program (“NSP”) which forced them to provide labour, a form of slavery, to the companies constructing the Bisha gold mine. They claim that Nevsun and its Eritrean subsidiary, Bisha Mine Share Company (“BMSC”), entered into contracts with two Eritrean companies, to develop the Bisha gold mine.
The plaintiffs filed suit against Nevsun in British Columbia, raising numerous causes of action. Damages are being sought under CIL for the use of forced labour, torture, slavery, cruel, inhuman or degrading treatment, and crimes against humanity. This is the first time a Canadian court has had to decide whether a party to an action can receive damages for cause of action based entirely on CIL. The plaintiffs are also seeking damages for the torts of conversion, battery, unlawful confinement, conspiracy with BMSC, Segen, Mereb and the Eritrean military, and for entering into an unlawful agreement to use forced labour. They are also claiming that Nevsun is directly liable for failing to stop practices at the mine site and for condoning the conduct of the Eritrean military and affiliate companies, while alleging that it is vicariously liable for the conduct of the military, Segen, and Mereb.
Nevsun applied to the Court to strike portions of the plaintiffs’ claim, denying their allegations that the Eritrean military or its subcontractors engaged in forced labour or slavery and denying that Nevsun agreed, aided, abetted, approved, or condoned any such conduct. It made four applications:
- to stay the proceedings on the grounds that Eritrea is a more appropriate forum (forum non conveniens);
- to dismiss, stay, or strike out the plaintiffs’ claims on the grounds that they disclose no reasonable cause of action because they are contrary to the “act of state doctrine”;
- to strike the plaintiffs’ CIL-based damages because they lack a reasonable cause of action;
- for an order preventing the plaintiffs from continuing the proceedings on a representative basis.
III. Important Human Rights Issues
A. Forum Application
In BC, the factors that a court must consider on an application for forum non conveniens are stipulated in subsection 11(2) of the Court Jurisdiction and Proceedings Transfer Act (“CJPTA”). They include:
- The comparative convenience and expense for the parties and witnesses when litigating in the alternative court;
- The law to be applied;
- Enforcement; and
- The fair and efficient working of the Canadian legal system as a whole.
Accordingly, Nevsun needed to prove that Eritrea was a “clearly more appropriate forum” and that it would result in justice for the parties. After reviewing expert testimony from both parties on Eritrea’s judicial system, evaluating potential procedural barriers for the plaintiffs, and undertaking an extensive analysis of the s. 11(2) factors, Justice Abrioux found that the plaintiffs would face severe barriers to justice in Eritrea. Particularly persuasive was the evidence about the integrity of the Eritrean judicial system, leading the Court to conclude that it is not independent and does not have a constitution or functioning legislature, nor does it recognize international human rights stemming from customary international law.
While the forum application in this case can be seen as a victory, it is a small one given that Eritrea has been labelled a rogue state by the UN Human Rights Council. According to the Council’s Report, the Eritrean government has committed widespread and gross human rights violations, some even constituting crimes against humanity. The Report describes conditions of indefinite forced labour, noting that attempts at democracy and the rule of law have been aggressively suppressed
B. Act of State Doctrine
The act of state doctrine is a judicial rule limiting the courts’ competence with respect to a certain subject matter, in this case the lawfulness of a foreign state’s actions within its own territory. The rule presents a major roadblock to recourse in international human rights disputes, including sovereign equality, reciprocity, and comity. It has yet to be applied in Canada.
Nevsun argued that the act of state doctrine should be applied, claiming that Canadian courts cannot evaluate the alleged involvement of Eritrean state officials and members of the military in forced labour. They argued that the matters should be left to Eritrean or international courts. Justice Abrioux found that the act of state doctrine was part of Canadian common law, but did not accept that the doctrine applied to the case at bar on the basis that it had yet to be applied in Canada, or in any appellate level court in comparable jurisdictions such as Australia or the UK.
C. CIL Application
Nevsun’s third motion to strike was based on the grounds that a breach of CIL was not actionable and did not disclose a reasonable cause of action. Prior to this decision, a Canadian court had yet to find that a party may be entitled to damages in a civil case due to a breach of  CIL is unwritten law that comes from the settled practice of sovereign  To prove that a particular practice forms part of the CIL, a party must demonstrate a pattern of behaviour among states in conformity with the alleged rule (state practice), and a pattern of behaviour arising out of a sense of a legal obligation (opinio juris).
Justice Abrioux disagreed with Nevsun that the tort allegations based in CIL were bound to fail, concluding that Nevsun had not proven that the claims disclosed no reasonable cause of action. He rejected Nevsun’s argument that customary international law norms are crimes of international law rather than torts, referring to a similar case from the Australian Federal Court which held that whether a claim is brought civilly or criminally, the common law must be developed with “emphatically expressed ideals of public policy, reflective of universal norms.”
Justice Abrioux also rejected Nevsun’s argument that Parliament, through statutes such as the Crimes Against Humanity and War Crimes Act and the Justice for Victims of Terrorism Act, had intended not to recognize private law causes of action for breaches of CIL norms, finding that this legislation did not demonstrate an express derogation. He disagreed with Nevsun’s claims that CIL norms are crimes at international law rather than torts, which would have meant that recourse should be in the form of sanction or punishment, rather than compensation or damages
D. Representative Claims
Nevsun also applied for the Court to issue an order that the Plaintiffs could not proceed on a representative basis based on Rule 20-3 of the Supreme Court Civil Rules (the “Rules of Court”), and that the Plaintiffs were attempting to bring a common law class action proceeding consisting entirely of non-resident class members, which the Rules of Court do not permit.
The Plaintiffs argued that a representative proceeding, rather than a class action proceeding pursuant to the Class Proceedings Act (the “CPA”), was the only way to achieve the goals of judicial economy, access to justice, and behavior modification with respect to the alleged wrongs.
In circumstances where a province does not have a comprehensive class action legislation, if the proceeding fulfills the requirements in Western Canadian Shopping Centres Inc v Dutton (“Dutton”), the case may proceed as a “common law class action”.
The Dutton requirements are as follows:
- the class is capable of clear definition;
- there are issues of fact and law in common to all class members;
- success for one class member means success for all and;
- the proposed representative adequately represents the interests of the class.
However, Justice Abrioux found that because British Columbia did have a comprehensive code of class action procedure, the Dutton factors did not apply. Moreover, he found that the Plaintiffs were precluded from seeking relief under the CPA because of the residency requirement as per subsection 2(1) of the CPA.
He further held that expanding Rule 20-3 to preclude the residency requirement non-resident plaintiffs or group members to commence a claim would not be in the role of the Courts but the Legislature.
Regardless, Justice Abrioux ultimately found that the requirements for a representative proceeding on the basis of Rule 20-3 were not met in this case, since there were no principal issues of fact or law that were essentially the same with regard to all members, and an individual examination of the circumstances of each plaintiff and proposed class member would be needed. Justice Abrioux found that the Plaintiffs could proceed with their claims in separate actions but would likely proceed by joinder.
IV. The Importance of this Case
By permitting the plaintiffs’ claims to proceed, the Court is allowing a new cause of action to be tested, namely tort claims based on CIL. International legal scholars have been advocating for this development for years in a movement that has been coined “transnational law,” the convergence of CIL and private claims for human rights redress. In the United States, much of this litigation and advocacy has focused on the creative use of the Alien Tort Statute. This case may have opened the door to transnational litigation in Canada. All eyes will be on the British Columbia Court of Appeal in September 2017.
 2016 BCSC 1856 [Nevsun].
 Ibid at para 4.
 Ibid at para 43.
 Ibid at para 42.
 Ibid at para 445.
 Ibid at para 5.
 Legal rule permitting a court to refuse to hear a case where there is clearly a more appropriate court available to the parties.
 Nevsun, supra note 1 at para 6.
 SBC 2003, c 28.
 Ibid, s 11(2)(a)–(b), (e)–(f).
 UN Human Rights Council, Detailed findings of the commission of inquiry on human rights in Eritrea, A/HRC/32/CRP.1, online: http://www.ohchr.org/Documents/HRBodies/HRCouncil/CoIEritrea/A_HRC_32_CRP.1_read-only.pdf.
 Ibid at para 106.
 Ibid at para 75.
 Nevsun, supra note 1 at para 349.
 Ibid at para 341.
 Ibid at para 348.
 Ibid at para 373.
 Ibid at para 375.
 Ibid at para 419.
 Ibid at para 445.
 Ibid at para 434.
 Ibid at para 457.
 Ibid at para 462.
 Ibid at para 458.
 BC Reg 168/2009.
 Nevsun, supra note 1 at para 488.
 RSBC 1996, c 50.
 Nevsun, supra note 1 at para 489.
 2001 SCC 46 [Dutton].
 Nevsun, supra note 1 at para 490.
 Dutton, supra note 30 at paras 38–41.
 Nevsun, supra note 1 at para 493.
 Ibid at para 510.
 Ibid at para 518.
 Ibid at para 524.
 Ibid at para 528.
 Ibid at para 571.
 Ibid at para 2.
 28 USC § 1350. The U.S. Alien Tort Statute is a federal law enacted in 1789 that gives U.S. courts jurisdiction to hear lawsuits commenced by non-U.S. citizens for torts committed in violation of the “law of nations”, or international law. More recently, U.S. courts have interpreted the statute to allow foreign citizens to seek remedies in U.S. courts for human rights violations committed outside the U.S.