Jean-Marie Fontaine

The appellant commenced an action in rem against a cargo of coal and obtained a warrant to arrest the cargo to secure an arbitration proceeding for an alleged breach of a contract of affreightment.

The Federal Court of Appeal struck the claim and set aside the warrant based on binding precedent requiring a 'physical nexus' under s. 43(2) of the Federal Courts Act.

The Supreme Court of Canada allowed the appeal, rejecting the 'physical nexus' interpretation in favour of an 'identifiability' test, finding that the cargo was the subject of the action because it was designated in the contract alleged to be breached.

The respondents filed an action in the Federal Court for damages to cargo during rail transit.

The appellant sought a stay of proceedings, relying on a forum selection clause in the bill of lading that granted exclusive jurisdiction to the courts in Antwerp, Belgium.

The prothonotary, motions judge, and Federal Court of Appeal denied the stay, applying the tripartite test for interlocutory injunctions and considering whether a fundamental breach voided the clause.

The Supreme Court of Canada allowed the appeal, holding that the 'strong cause' test is the proper standard for enforcing forum selection clauses in bills of lading, and that allegations of fundamental breach should be determined by the chosen forum.