One-stage Canadian test
The British Columbia Court of Appeal has held that British Columbia is the more appropriate forum to hear a claim by Guatemalan citizens shot at a mine in Guatemala ultimately owned by a British Columbian company: Garcia v Tahoe Resources Inc [2017] FICR 17.
A chambers judge had stayed proceedings in British Columbia, holding that that Guatemala was the more appropriate forum because criminal proceedings were pending there, the events occurred there and evidence was located there, the courts there were not particularly corrupt and might extend the expired civil limitation period. She applied the test of whether the foreign legal system was capable of providing justice and held that it was.
The Guatemalan plaintiffs appealed with new evidence that criminal proceedings had been adjourned indefinitely because the main accused had fled Guatemala and was being held in Peru subject to doubtful extradition proceedings. They also had new evidence of corruption and lack of independence in the Guatemalan judicial system of arrests and disciplining of judges. The Court of Appeal admitted the first evidence but rejected the second.
The court said that the judge applied the wrong test and should have asked whether there was a real risk of an unfair process in the foreign court. The indefinite adjournment of the criminal proceedings, the uncertainty over the extension of the civil limitation period and the inadequate discovery process in Guatemala meant that there was a real risk.
Canada and England take a different approach to forum non conveniens. In England, a defendant must establish that its proposed alternate forum is more appropriate; if this burden is met, then a stay will ordinarily be granted unless the plaintiff can establish other circumstances which make the granting of a stay adverse to the interests of justice, such as corruption or injustice in the alternate forum. This burden is on the plaintiff and comes at a secondary stage after the defendant has established the alternate forum is more appropriate.
The Canadian approach is not a two-stage analysis. All factors and concerns must be weighed together in one stage with the overall burden on the defendant to establish that the proposed alternate forum is in a better position to dispose fairly and efficiently of the litigation.
Where a plaintiff presents evidence of corruption and injustice in the defendant’s proposed alternate forum, the court must ask whether the evidence shows a "real risk" that the alternate forum will not provide justice. Sweeping, generalized evidence of corruption in the alternate forum does not meet that standard. There is no specific evidentiary threshold in Canada. The quality of evidence regarding the risk of unfairness should dictate the weight that is attached to that factor. Broad assertions of corruption should be given limited weight, whereas detailed and cogent evidence of corruption should attract significant weight.
Read the full head note on Ford's International Commercial Reports here: [2017] FICR 17.
