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.
