Thursday, May 27, 2010

Beware Limitation Period for Foreign Arbitral Awards

From Eugene Meehan's Supreme Court of Canada Lawletter:

"Y Corp., a Russian corporation that develops and operates oilfields in Russia, purchased materials for its oilfield operations from R Corp., an Alberta corporation. Following a contractual dispute, Y Corp. commenced arbitration proceedings before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. On September 6, 2002, the arbitral tribunal ordered R Corp. to pay $952,614.43 US in damages to Y Corp. Y Corp. applied to the Alberta Court of Queen's Bench for recognition and enforcement of the award on January 27, 2006. The court dismissed the application, ruling that it was time-barred under the two-year limitation period in s. 3 of the Alberta Limitations Act. The Court of Appeal upheld the ruling."

The Supreme Court of Canada held (unanimously) that the appeal is dismissed.

Justice Rothstein wrote as follows (at pages 2, 33):

"Under international arbitration law, the matter of limitation periods is left to local procedural law of the jurisdiction where recognition and enforcement is sought. The applicable limitation period in this case must therefore be found in the limitations law of Alberta. As an arbitral award is not a judgment or a court order for the payment of money, an application for recognition and enforcement in Alberta is not eligible for the 10-year limitation period set out in s. 11 of the Limitations Act, R.S.A. 2000, c. L-12. Rather, the application is subject to the general two-year limitation period applicable to most causes of action, which is found in s. 3 of the Limitations Act.

...In addition to claiming that Yugraneft's application is time-barred, Rexx has also argued that enforcement of the award should be refused on public policy grounds (Convention, art. V(2)(b)), alleging that it was tainted by fraud. In light of my conclusion regarding the applicable limitation period, there is no need to rule on this issue and I refrain from doing so."

Regards,

Blair

Wednesday, May 19, 2010

No Protection of Confidential Sources for Evidence of Crimes

From Eugene Meehan's Supreme Court of Canada Lawletter:

The National Post employed M as a journalist. M investigated whether C, then Prime Minister of Canada, was improperly involved with a loan from a federally funded bank to a hotel in C's riding which allegedly owed a debt to C's family investment company. X, a secret source, provided M with relevant information in exchange for a blanket, unconditional promise of confidentiality. In 2001, M received a sealed envelope in the mail that contained a document which appeared to be the bank's authorization of its loan to the hotel. If genuine, it could show that C had a conflict of interest in relation to the loan. M faxed copies of the document to the bank, to the Prime Minister's office, and to a lawyer for the Prime Minister. All three said that the document was a forgery. Shortly thereafter, X met M. X described receiving the document anonymously in the mail, discarding the original envelope, and passing the document on to M in the belief that it was genuine. M was satisfied that X was a reliable source who did not believe that the document was a forgery when he or she forwarded it to M. X feared that fingerprint or DNA analysis might reveal his or her identity and asked M to destroy the document and the envelope. M refused but told X that his undertaking of confidentiality would remain binding as long as he believed that X had not deliberately misled him.

The bank complained to the RCMP and an officer asked the appellants to produce the document and the envelope as physical evidence of the alleged crimes i.e. the forgery itself and the "uttering" (or putting into circulation) of the doctored bank records. They refused and M declined to identify his source.

The officer applied for a search warrant and an assistance order compelling M's editor to assist the police in locating the document and the envelope. He intended to submit them for forensic testing to determine if they carried fingerprints or other identifying markings (including DNA) which might assist in identifying the source of the document. Although the Crown informed the judge that the National Post had requested notification of the application, the hearing proceeded ex parte and a search warrant and an assistance order were issued.

The warrant and the order provided the appellants with one month before the RCMP could search the National Post's premises and included other terms intended to accommodate the needs of the National Post as a media entity. The appellants applied to quash the warrant and assistance order. The reviewing judge held that there was sufficient information to conclude the document was a forgery but that there was only a remote and speculative possibility that disclosure of the document and the envelope would advance a criminal investigation. She set aside the search warrant and the assistance order. The Court of Appeal reversed that decision and reinstated the search warrant and the assistance order. In this Court, the appellants and supporting interveners argued that the warrant and the order should be quashed because they infringe s. 2(b) or s. 8 of the Canadian Charter of Rights and Freedoms, or because the secret sources are protected by the common law of privilege."

The Supreme Court of Canada (with one judge writing partially concurring reasons, and another dissenting reasons) that the appeal is dismissed.

Justice Binnie wrote as follows (at pages 2-3):

"The public has the right to every person's evidence. That is the general rule. The question raised by this appeal is whether the appellants can exempt themselves from this obligation on the basis of a journalistic privilege rooted either in s. 2(b) of the Canadian Charter of Rights and Freedoms which guarantees freedom of expression, "including freedom of the press and other media of communication", or in the common law.

Specifically, the National Post, its editor-in-chief and one of its journalists apply to set aside a search warrant obtained from the Ontario Court of Justice authorizing the police to seize what are alleged to be forged bank records and the envelope in which the appellants received the records from secret source(s). The police believe that seizure of the physical documents is essential to proof of the forgery, and that forensic analysis may lead them directly or indirectly to the identity of the perpetrators. The appellants, for their part, seek to protect the identity of their secret source(s), who may or may not be directly implicated in the forgery. If the police are correct, therefore, the documents in the control of the National Post and its co-appellants are not merely links in the chain of criminal investigation but constitute in themselves the essential physical evidence of alleged crimes - the forgery itself and the "uttering" (or putting into circulation) of the doctored bank records in the plain brown envelope.

The courts should strive to uphold the special position of the media and protect the media's secret sources where such protection is in the public interest, but this is not the usual case of journalists seeking to avoid testifying about their secret sources. This is a physical evidence case. It involves what is reasonably believed to be a forged document. Forgery is a serious crime...I agree with the Ontario Court of Appeal (2008 ONCA 139, 89 O.R. (3d) 1) that the media claim to immunity from production of the physical evidence is not justified in the circumstances disclosed in the evidence before the court even if the end result proves to be information that may lead to the identification of the secret source(s)."

Regards,

Blair

Aboriginal Treaty Rights and the Environment

From the Eugene Meehan Supreme Court of Canada Lawletter:

The Cree and Inuit communities signed the James Bay and Northern Québec Agreement with the governments of Quebec and Canada in 1975. The Agreement established a governance scheme and created a framework that would govern many aspects of life in the territory, including the aboriginal economic and social development and the preservation of the natural environment. Under s. 22, the Agreement set out detailed and comprehensive procedures for environmental impact assessments. Whether a provincial or federal assessment will be conducted under the Agreement depends on the constitutional jurisdiction within which the project itself falls. In particular, s. 22.6.7 provides that 'a project shall not be submitted to more than one (1) impact assessment and review procedure unless such project falls within the jurisdictions of both Québec and Canada'. If the exception applies, two assessments will be required, but these assessments may be combined with the 'mutual agreement' of the parties. Section 2.5 of the Agreement also provides that the Agreement is paramount over all other laws of general application that are inconsistent with it.

A company intends to open and operate a mine in the James Bay area of Quebec in the Agreement 'Category III' lands, an area where the Agreement recognizes Quebec's right to regulate natural resource development subject to the environmental protection provisions of s. 22. In accordance with the Agreement's procedures, the proponent of the project submitted to the administrator responsible for 'matters respecting provincial jurisdiction' information concerning its proposed development. The provincial Administrator transmitted this information to the Evaluating Committee, which made a recommendation about the extent of impact assessment and review and whether or not a preliminary and/or a final impact statement should be done. Subsequently, the provincial Administrator alone decided the scope of the assessment and gave appropriate directions to the proponent. On receipt of the provincial Administrator's instructions, the proponent supplied information about the potential environmental and social impacts, which acknowledged a significant impact on fish habitat. This was transmitted by the provincial Administrator to the provincial Review Committee and was then to be transmitted to the Cree Regional Authority for their representations.

Meanwhile, federal officials who were not involved in the review process under the Agreement, concluded that the project's impact on fisheries - a matter within exclusive federal jurisdiction under s. 91(12) of the Constitution Act, 1867 - engaged s. 35(2) of the Fisheries Act and required a comprehensive study pursuant to the regulations made under the Canadian Environmental Assessment Act ('CEAA'). The federal officials informed the Cree that the study would be conducted by a review panel under the CEAA and not through the federal assessment procedure provided for in s. 22 of the Agreement. While the provincial review process of the project was still pending, the Cree commenced an action for declaratory relief in the Quebec Superior Court, which declared that only the provincial environmental assessment was applicable to the project pursuant to the Agreement. The Court of Appeal set aside that decision. The court concluded that the CEAA, in conjunction with the federal Fisheries Act, validly triggered a federal environmental assessment under the CEAA but that there were practical and operational inconsistencies between the CEAA review procedure and the one set out in the Agreement. Since the Agreement was paramount, the court held that CEAA review procedure was inapplicable, but substituted the federal review procedure in the Agreement for the one in the CEAA. The court also concluded that the project is subject as well to the provincial review procedure under s. 22 of the Agreement.

The Supreme Court of Canada held (6:3) that the appeal is dismissed, but the order of the Court of Appeal varied to provide that if the mine project is approved pursuant to the Agreement, the proponent may not proceed with the work without an authorization under s. 35(2) of the Fisheries Act, and that the issuance of any such authorization is to comply with the CEAA in accordance with its procedures, as well as the Crown's duty to consult with the Cree in relation to matters that may adversely affect their rights under the Agreement.

Justice Binnie wrote as follows (at pages 4, 25, 27-28):

"...it is necessary to approach this case on the basis of the terms the parties actually negotiated and agreed to as set out in the text of their agreement rather than on general observations and ideas which, in my respectful view, are unsupported by the text.

...Common sense as well as legal requirements suggest that the CEAA assessment will be structured to accommodate the special context of a project proposal in the James Bay Treaty territory, including the participation of the Cree. Reference has already been made to the possibility of a joint or substituted panel under ss. 40 to 45 of the CEAA. Nevertheless, the legal question before us is whether, absent such an arrangement, the federal Minister is bound to issue a s. 35(2) fisheries permit following the approval of a mining project by the Administrator (or the Quebec Cabinet) and, in my view, he is not so bound.

...In my view, the vanadium mine cannot lawfully proceed without a fisheries permit. The proponent is unable to obtain, and the federal Minister is unable to issue, a s. 35(2) fisheries permit without compliance with the CEAA. The contention of the Quebec Attorney General that the Treaty requires the federal Minister to issue the s. 35(2) fisheries permit as a result of the province-led review panel regardless of the federal Minister's independent assessment of potential damage to fish habitat should be rejected.

It is only after final approval by the Treaty bodies that it can be said that "the proposed development is approved in accordance with the provisions of this Section", which is the condition precedent to the proponent's obligations under s. 22.7.1 to "obtai[n] where applicable the necessary authorization or permits from responsible Government Departments and Services". There is thus no conflict. The need for a post-Treaty approval fisheries permit is made mandatory by the Treaty itself ("shall" obtain). In the case of fisheries, it is federal law, not the Treaty, that governs when such a permit may be granted as well as its terms and conditions.

I agree with the observation expressed by my colleagues LeBel and Deschamps JJ. that "[i]t would hardly be reasonable to believe that the parties intended that one of them might sign the Agreement one day and withdraw its signature the next day, week or year in respect of a key part of their contract" (para. 58). This sentiment is true so far as it goes, but in my view, with respect, it has no application to the dispute at issue in this appeal. I would dismiss the appeal but vary the order of the Quebec Court of Appeal to provide that if the vanadium mine project is approved pursuant to the Treaty, the proponent may not proceed with the work without authorization under s. 35(2) of the Fisheries Act, and that the issuance of any such authorization is to comply with the Canadian Environmental Assessment Act in accordance with its procedures, as well as the Crown's duty to consult with the First Nations in relation to matters that may adversely affect their Treaty rights."

Regards,

Blair