The Court of Appeal for Ontario released its decision in James
Bay Resources Limited v. Mak Mera Nigeria Limited, 2015 ONCA 781 this week. This is an appeal
by Nigerian appellants who had lost a motion to stay an action brought by James
Bay Resources Limited (“James Bay Resources”) on the ground that the
Ontario courts lacked “jurisdiction simpliciter” and Ontario was not the
convenient forum for the determination of the dispute between the
parties.
James Bay Resources entered into a Memorandum of
Understanding (“MOU”) with the appellant, Adewale Olorunsola (“Sola”)
on March 3, 2011. The MOU was negotiated and signed in Ontario. It
set out an arrangement between the parties with respect to the acquisition of
Nigerian oil and gas assets.
On February 12, 2012, James Bay Resources and the appellant,
Mak Mera Limited (“Mak Mera”) entered into a letter agreement which
replaced the MOU (“Agreement”). The Agreement was far more
detailed than the MOU. Sola signed both the MOU and the Agreement.
A dispute arose between the parties in respect of the
contractual arrangements. The dispute was fueled by a letter sent by Mak
Mera to Royal Dutch Shell PLL on July 2, 2014. The letter was copied to
James Bay Resources, as well as to many others, including the Nigerian
Ambassador to Canada and a number of officials of the Nigerian
government. Madam Justice MacFarland of the Court of Appeal found that
absence truth, the statements made in the letter were "quite clearly defamatory"
of James Bay Resources.
On September 4, 2014, James Bay Resources commenced
proceedings against Mak Mera and Sola in Ontario. On September 16, 2014,
Mak Mera, Sola and Sola’s father-in-law (a Nigerian resident and Chairman of
Mak Mera), commenced an action in Nigeria against numerous parties including
James Bay Resources and its CEO, Stephen Shafsky. Some of the claims in
the Nigerian action were similar to those in the Ontario action.
James Bay Resources moved in The Federal High Court of
Nigeria to strike the Nigerian action on the grounds that the Nigerian court
lacked jurisdiction. It was unsuccessful. James Bay Resources is
appealing that order.
On March 2, 2015, Mak Mera and Sola moved to strike or
permanently stay the Ontario action. Justice Paul Perell of the Ontario
Superior Court of Justice concluded that Ontario had jurisdiction
simpliciter and identified several presumptive factors that would apply,
including that Sola is an Ontario resident and both the MOU and the Agreement
were negotiated and signed in Ontario. Justice Perell also found that the
Agreement provides that it is governed by Ontario law and contains a choice of
forum clause that names Ontario as the jurisdiction where any disputes would be
resolved. He noted, “Neither Mak Mera nor Mr. Sola has advanced any
cogent argument that there is a rebuttal of the contractual connection as a
presumptive factor. Their arguments may be relevant to the issue forum
conveniens, but jurisdiction is not rebutted.”. Mak Mera and Sola
appealed to the Court of Appeal.
The appellants made no oral submissions rebutting the contractual connection as a presumptive factor. Justice MacFarland
held that the arguments raised on appeal went to the merits of the claims, not to jurisdiction of the Ontario courts. Those issues did not
displace or challenge the fact that both agreements (the MOU and the
Agreements) were negotiated and signed in Ontario and that Sola is an Ontario
resident – both are strong, presumptive factors.
The appellants also argued that Justice Perell had erred in
law by failing to specifically consider comity in his analysis. Justice
MacFarland embarked on a detailed analysis of the goal of comity in
jurisdictional motions. She referred to the decision of the Supreme Court
of Canada in Van Breda v. Village Resorts, [2012] 1 SCR572:
The goal of the modern conflicts
system is to facilitate exchanges and communications between people in
different jurisdictions that have different legal systems. In this sense
it rests on the principle of comity. But comity itself is a very flexible
concept. It cannot be understood as a set of well-defined rules, but
rather as an attitude of respect for and deference to other states and, in the
Canadian context, respect for and deference to other provinces and their
courts. Comity cannot subsist in private, international law without
order, which requires a degree of stability and predictability in the
development and application of the rules governing international or
inter-provincial relationships. Fairness and justice are necessary
characteristics of a legal system, but they cannot be divorced from the
requirements of predictability and stability which assure order in the
conflicts system. In the words of LaForest J., in Morguard, “what
must underlie a modern system of private, international law and principles or
order and fairness, principles that ensure security of transactions with
justice”.
Accordingly, Justice MacFarland found that comity is not a
stand-alone factor. She held that it was part and parcel of the forum
non conveniens assessment in a given case. In dismissing the appeal,
Justice MacFarland held that Justice Perell had considered the issue of comity
in his analysis. He had done so implicitly when he outlined and
considered all of the relevant factors in coming to his conclusion that Nigeria
was not the more convenient forum.
Justice Perell was aware of the Nigerian litigation which
was started after the Ontario action. He was aware that James Bay
Resources had filed a statement of defence in that action, and brought an
unsuccessful motion to strike and was appealing the dismissal of its
motion. The appellants had cited no law for their argument that by
filing a statement of defence in the Nigerian action, James Bay Resources had
attorned to the jurisdiction of the Nigerian courts.
Justice MacFarland agreed with Justice
Perell’s conclusion that “balancing all factors, Nigeria is not clearly the
appropriate forum for the dispute and Ontario is not forum non conveniens.”.
Regards,
Blair
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