Vale Canada Limited v. Royal & Sun Alliance Insurance Company of Canada, 2022 ONCA 448

COURT OF APPEAL FOR ONTARIO

DATE: 20220603 DOCKET: M53495 (C70288, C70290, C70287, C70289, C70297, C70294, C70291, C70292, C70281, C70300, C70293, C70302, C70295, C70298, C70277& C70321)

Lauwers J.A. (Motion Judge)

BETWEEN

Vale Canada Limited (f/k/a Inco Limited, f/k/a International Nickel Company Limited), Vale Japan Limited, PT Vale Indonesia Tbk, and Vale Europe Limited Plaintiffs (Appellants/Moving Parties)

and

Royal & Sun Alliance Insurance Company of Canada (f/k/a Royal Insurance Company of Canada), Omega General Insurance Company (as successor to British Northwestern Insurance Company), Lloyds Underwriters, certain underwriters at Llyoyd’s of London, Sompo Japan Insurance Inc. (f/k/a/ The Nippon Fire & Marine Insurance Company Limited), General Reinsurance Corporation, The North River Insurance Company, Zurich Insurance Company Limited (UK Branch) (as successor to Eagle Star Insurance Company Limited), RiverStone Insurance (UK) Limited (as successor to Midland Assurance Limited), Employers Insurance Company of Wausau (f/k/a Employers Insurance Company of Wausau, A Mutual Company), Allstate Insurance Company (f/k/a Northbrook Excess & Surplus Insurance Company), Fireman’s Fund Insurance Company, United States Fire Insurance Company, and the John Doe Insurance Companies Defendants (Respondents/Responding Parties)

AND BETWEEN

Vale Canada Limited (f/k/a Inco Limited, f/k/a International Nickel Company Limited), Vale Japan Limited, PT Vale Indonesia Tbk, and Vale Europe Limited Plaintiffs (Respondents/Moving Parties)

and

Royal & Sun Alliance Insurance Company of Canada (f/k/a Royal Insurance Company of Canada), Omega General Insurance Company (as successor to British Northwestern Insurance Company), Lloyds Underwriters, certain underwriters at Llyoyds of London, Sompo Japan Insurance Inc. (f/k/a/ The Nippon Fire & Marine Insurance Company Limited), General Reinsurance Corporation, The North River Insurance Company, Zurich Insurance Company Limited (UK Branch) (as successor to Eagle Star Insurance Company Limited), RiverStone Insurance (UK) Limited (as successor to Midland Assurance Limited), Employers Insurance Company of Wausau (f/k/a Employers Insurance Company of Wausau, A Mutual Company), Allstate Insurance Company (f/k/a Northbrook Excess & Surplus Insurance Company), Fireman’s Fund Insurance Company, United States Fire Insurance Company, and the John Doe Insurance Companies Defendants (Appellants/Responding Parties)

AND BETWEEN

Royal & Sun Alliance Insurance Company of Canada Plaintiff (Appellant)

and

Vale Canada Limited , AIU Insurance Company, AIG Commercial Insurance Company of Canada, as successor for American Home Assurance Company, Aviva Insurance Company of Canada (f/k/a/ CGU International Insurance PLC f/k/a Commercial Union Assurance Company f/k/a Employer’s Liability Assurance Corporation Limited, Granite State Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA., The North River Insurance Company, United States Fire Insurance Company , Employers Insurance Company of Wausau , Fireman’s Fund Insurance Company, General Reinsurance Corporation , Indemnity Insurance Company of North America, Insurance Company of North America, certain underwriters at Lloyds, London, Zurich Insurance Company Ltd. (f/k/a Midland Assurance Ltd.) , Sompo Japan Nipponkoa Insurance, Inc (f/k/a Nippon F&M, Allstate Northbrook Indemnity Company f/k/a Northbrook Indemnity Company , Travelers Casualty & Surety Company , Travelers Insurance Company of Canada, St. Paul Mercury Insurance Company , and John Doe Insurance Companies Nos. 1 through 50 Defendants (Respondents/ Moving Parties / Responding Parties )

and

Omega General Insurance Company (as successor to British Northwestern Insurance Company), Lloyds Underwriters, certain underwriters at Lloyds of London, Sompo Japan Insurance Inc. (f/k/a/ The Nippon Fire & Marine Insurance Company Limited), Zurich Insurance Company Limited (UK branch) (as successor to Eagle Star Insurance Company Limited), RiverStone Insurance (UK) Limited (as successor to Midland Assurance Limited ) , Allstate Insurance Company (f/k/a Northbrook Excess and Surplus Insurance Company) and the John Doe Insurance Companies Third Parties (Respondents/ Responding Party )

AND BETWEEN

Royal & Sun Alliance Insurance Company of Canada Plaintiff (Respondent)

and

Vale Canada Limited , AIU Insurance Company, AIG Commercial Insurance Company of Canada, as successor for American Home Assurance Company, Aviva Insurance Company of Canada (f/k/a/ CGU International Insurance PLC f/k/a Commercial Union Assurance Company f/k/a Employer’s Liability Assurance Corporation Limited, Granite State Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA., The North River Insurance Company, United States Fire Insurance Company , Employers Insurance Company of Wausau , Fireman’s Fund Insurance Company, General Reinsurance Corporation , Indemnity Insurance Company of North America, Insurance Company of North America, certain underwriters at Lloyds, London, Zurich Insurance Company Ltd. (f/k/a Midland Assurance Ltd.) , Sompo Japan Nipponkoa Insurance, Inc (f/k/a Nippon F&M, Allstate Northbrook Indemnity Company f/k/a Northbrook Indemnity Company , Travelers Casualty & Surety Company , Travelers Insurance Company of Canada, St. Paul Mercury Insurance Company , and John Doe Insurance Companies Nos. 1 through 50 Defendants (Appellants/ Moving Parties / Responding Parties )

and

Omega General Insurance Company (as successor to British Northwestern Insurance Company), Lloyds Underwriters, Certain Underwriters at Lloyds of London, Sompo Japan Insurance Inc. (f/k/a/ The Nippon Fire & Marine Insurance Company Limited), Zurich Insurance Company Limited (UK branch) (as successor to Eagle Star Insurance Company Limited), RiverStone Insurance (UK) Limited (as successor to Midland Assurance Limited) , Allstate Insurance Company (f/k/a Northbrook Excess and Surplus Insurance Company) and the John Doe Insurance Companies Third Parties (Respondents/ Responding Party )

AND BETWEEN

Vale Canada Limited (f/k/a Inco Limited, f/k/a International Nickel Company Limited), Vale Japan Limited, PT Vale Indonesia Tbk, and Vale Europe Limited Plaintiffs (Respondents/Moving Parties)

and

Travelers Casualty and Surety Company (f/k/a The Aetna Casualty & Surety Company), and St. Paul Mercury Insurance Company Defendants (Appellants/Responding Parties)

Counsel: Atrisha Lewis, for the moving parties Doug Smith, for the responding parties

Heard: May 31, 2022 by video conference

REASONS FOR DECISION

[1] The hearing of the appeals stemming from the decision of Myers J., dated January 4, 2022 and reported at 2022 ONSC 12, is scheduled for September 14, 2022. Vale Canada Limited, Vale Japan Limited, PT Vale Indonesia Limited, and Vale Europe Limited (collectively, “Vale”), move before me as case management judge to expedite the appeal. For the reasons that follow, the motion is dismissed.

(1) OVERVIEW

[2] I take this contextual background from Vale’s Notice of Appeal. [1] The basic facts are not disputed. Vale is a mining and metals company. It has been required to investigate and remediate the environmental impact of its mining, smelting and refinery operations, and to defend numerous legal actions seeking damages allegedly arising from the environmental impact of its operations in Ontario and the United Kingdom. Vale asserts that “[i]n an effort to mitigate the costs associated with its environmental impact, Vale purchased 92 occurrence based environmental liability insurance policies from 24 primary and excess insurers”, some of which are the respondents. Vale states that “the claim pertains to 26 sites, 22 of which are in Canada and 19 of which are in Ontario. None are in New York. Only 1 of the 26 is in the United Kingdom”.

[3] Negotiations between Vale and some of its insurers over the scope of coverage under the policies eventually broke down, and the Travelers Casualty & Surety Company stepped away from a stand-still agreement and sued Vale in the Supreme Court of the State of New York, County of New York: Commercial Division Part 53. Vale responded by immediately suing Travelers in Ontario. It soon after brought a second action in Ontario against its many insurers. There is a third action brought by Royal & SunAlliance (“RSA”) against Vale and its other insurers. More details are set out in the decision of Myers J.

[4] At a case conference held before Myers J. on September 24, 2021, for the reasons reported at 2021 ONSC 6377, he directed argument on jurisdiction and on forum non conveniens , and heard the argument on November 22 and December 17, 2021. On January 4, 2022, Myers J. found that Ontario has jurisdiction over most of the defendants and that they had not established that New York was a more convenient forum for the claims. He summarized the outcome at paras. 6-8:

Vale Canada’s claims against Zurich and Riverstone are stayed pending the outcome of the UK arbitration. The claims by RSA against Zurich and Riverstone are not subject to the arbitration agreement and are not stayed.

This court does not have jurisdiction to entertain the claims made against North River Insurance Company. In all other respects the motions are dismissed.

For the reasons set out below, I find that this court has jurisdiction over all of the other moving defendants in these actions and that the moving defendants have not established that New York is a more convenient forum for the claims advanced by RSA and Vale Canada in these actions.

[5] However, Myers J. did not set a procedural schedule. A case conference for that purpose before him is set for June 20, 2022.

[6] Vale and several insurers appealed and these appeals are to be heard by this court on September 14 and 15, 2022.

[7] Vale moved in the New York proceeding to dismiss Traveler’s complaint and other cross-claims against Vale, based on the principle of forum non conveniens . The argument was heard on October 16, 2021, and Vale’s motion and a similar motion by RSA were dismissed. The reasons of Borrok J.S.C., dated May 10, 2022, stated:

Dismissal based on forum non conveniens pursuant to CPLR §§ 327 and 3211(a)(4) is not appropriate ( Islamic Republic of Iran v. Pahlavi , 62 N.Y.2d 474, 479 [1984]). Simply put, the movants have failed to sustain their burden in displacing the Plaintiff’s choice of forum. As this Court has previously discussed, the critical issue is whether based on the totality of the circumstances New York is an inconvenient forum and whether another forum is available which best serves the ends of justice ( Atlantic Mut. Ins. Co. v. Cadillac Fairview US, Inc., 125 AD.2d 181 , 184 [1st Dept 1986]). This is a dispute involving insurance policies procured in New York, underwritten in New York, issued in New York, delivered to Inco Limited’s New York Office (which is the address identified on almost every single policy at issue [NYSCEF Doc. No. 155]), where notice of claims were to be provided in New York and whether coverage exists under those policies. The Canada court in the later filed actions dismissed the claims against North River because it is not subject to jurisdiction in Canada. Wausau also specifically negotiated to exclude Canada risks such that to make them litigate there is particularly inappropriate. Thus, it can not be said that Canada presents the more comprehensive actions. The Commercial Division in New York regularly adjudicates insurance coverage disputes where the events underlying the coverage issue occurred elsewhere, and this Court is often called to interpret foreign law. Indeed, this is part of this Court’s jurisdictional mandate. Stated differently, the burden on the Court is small. Given the proximity between Canada and New York, it simply can not be said that the burden on the Defendants is significant.

[8] The decision of Borrok J.S.C. has been appealed and the appeal will not be heard until the fall, I am advised. However, in the meantime his decision set what Vale has described as an “aggressive” document production and discovery schedule. Vale has advised that it will be seeking a stay of Borrok J.S.C.’s procedural order pending appeal.

(2) ANALYSIS

[9] Under s. 12.1.3 of this court’s Practice Direction, in order to expedite these appeals, I must be “satisfied that the urgency of the matter requires an earlier hearing date”. Because there are parallel proceedings underway in New York and Ontario, I requested and received written and oral submissions on the applicable principles of judicial comity that might play a role in the decision to expedite the appeal.

[10] The critical issue is which of Ontario or New York is, on all the facts, the more convenient forum in which to try the case, based on the usual principles, in which comity plays a role.

[11] As this court observed in James Bay Resources Ltd. v. Mak Mera Nigeria Ltd., 2015 ONCA 781, 128 O.R. (3d) 198, at paras. 11-13, following Teck Cominco Metals Ltd. v Lloyd’s Underwriters, 2009 SCC 11, [2009] 1 S.C.R. 321, at paras. 21, 29, comity is not a stand-alone factor but is part of the case-specific assessment of forum non conveniens . Vale relies particularly on Teck Cominco, where the Supreme Court rejected the argument that the assumption of jurisdiction by a U.S. District Court was dispositive, holding instead, at para. 31, that this was only one factor to be considered. See also Club Resorts Ltd. v Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572.

[12] For Vale, “[t]he driving factor for expedition of these appeals is the lack of the progression of the underlying Ontario Actions, which should proceed in tandem with New York pending a final determination on jurisdiction”. Vale adds that: “To date, despite numerous requests and corresponding insurer representations, the insurers have not agreed to a timetable in Ontario which will proceed in lockstep with New York”, despite Vale’s agreement that “any such steps would not amount to attornment”. Vale also points to several possible complicating factors that could delay the Ontario proceedings, including the future involvement, if any, of North River Insurance, and Allstate Insurance Group’s attempt to extricate itself from the proceedings.

[13] At bottom, Vale fears that the flow of judicial events might render moot the appeals to this court, by the passage of time alone, or as a result of the more rapid and robust development of the record in the New York Court, or both. Vale fears that the race will go to the swifter court, which might turn out to be New York.

[14] Not much, if anything, should turn on which action was started first (New York), or which jurisdiction first issued a decision on forum non conveniens (Ontario). The Supreme Court admonishes in Teck Cominco, at paras. 29-30, that this form of competition between jurisdictions is wrong and unprincipled. The issue of which court should decide the litigation should be determined on true forum non conveniens principles:

Finally, policy considerations do not support making a foreign court’s prior assertion of jurisdiction an overriding and determinative factor in the forum non conveniens analysis. To adopt this approach would be to encourage a first-to-file system, where each party would rush to commence proceedings in the jurisdiction which it thinks will be most favourable to it and try to delay the proceedings in the other jurisdiction in order to secure a prior assertion in their preferred jurisdiction. Technicalities, such as how long it takes a particular judge to assert jurisdiction, might be determinative of the outcome. In short, considerations that have little or nothing to do with where an action is most conveniently or appropriately heard, would carry the day. Such a result is undesirable and inconsistent with the language and purpose of s. 11 [of the applicable legislation], discussed above.

Also, the extent to which approaches to the exercise of jurisdiction differ on an international level also weighs in favour of rejecting Teck’s approach. A distinction should be made between situations that involve a uniform and shared approach to the exercise of jurisdiction (e.g. interprovincial conflicts) and those, such as the present, that do not. In the latter, blind acceptance of a foreign court’s prior assertion of jurisdiction carries with it the risk of declining jurisdiction in favour of a jurisdiction that is not more appropriate. A holistic approach, in which the avoidance of a multiplicity of proceedings is one factor among others to be considered, better serves the purpose of fair resolution of the forum non conveniens issue with due comity to foreign courts.

[15] Another, more graphic, way of putting the point is that courts should avoid facilitating an “unseemly race by each party to trial and judgment in the forum of its choice”: McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del. 1970).

[16] The Supreme Court’s admonition in Teck Cominco that the race should not automatically go to the swift requires me to address Vale’s worry about the accusation of “gamesmanship” made by Borrok J.S.C. in his decision. With respect, this might not be a fair assessment of Vale’s actions. Vale points out that it was Traveler’s unilateral decision to step away from the stand-still agreement that gave it the advantage of first strike in New York. As such, Traveler’s forum-selection move alone should not be dispositive of the analysis.

[17] The forum non conveniens argument will fall to be determined not by lower court judgments on either side of the border, but by the respective appeal courts in both jurisdictions.

[18] That said, there is no urgency to the appeal that would justify expediting it by several weeks. Doing so would only embroil this court in an “unseemly race”.

“P. Lauwers J.A.”

APPENDIX: Procedural Chronology*

Date	Procedural Step
June 25, 2021	Travelers Insurance filed complaint against Vale in New York Supreme Court.
June 29, 2021	Vale Canada files first Statement of Claim (against Travelers Insurance), in response to New York action filed by Travelers.
July 21, 2021	Royal & Sun Alliance Insurance file Statement of Claim against Vale and other insurers to ascertain extent of their responsibility vis-à-vis other insurers of Vale.
July 22, 2021	Vale files second Statement of Claim, expanding to include more of their insurers (first Statement of Claim has been subsumed into this action according to Myers J.).
August 10, 2021	Allstate Insurance serves reply and cross-claim in New York.
August 16, 2021	Vale brings Notice of Motion in New York for dismissal of Travelers Complaint on the basis of forum non conveniens.
September 14, 2021	Vale brings Notice of Motion in New York for dismissal/ stay of the Allstate Insurance crossclaims, on the basis of forum non conveniens.
October 4, 2021	Notice of Motion by insurers, challenging Ontario’s jurisdiction.
October 20, 2021	Endorsement of Myers J. consolidating the ten insurer jurisdiction motions into one hearing.
January 4, 2022	Endorsement of Myers J. deciding on the Jurisdiction motion of the Insurers – 2022 ONSC 12.
February 2-3, 2022	Notices of Appeal filed in Court of Appeal for Ontario, from Myers J. motion Decision.
March 30, 2022	Case Management call with Lauwers J.A. – to order documents for the joint appeals.
May 5, 2022	Case Management call with Lauwers J.A. – allowing Vale to file a single factum.
May 10, 2022	New York Supreme Court issued decision in the forum non conveniens motion, finding New York to be the appropriate forum.
May 11, 2022	Case management call with Lauwers J.A. – to inform of New York decision and request by Vale for expedited appeal.
May 13, 2022	Case Management call with Lauwers J.A. – court request for submissions on comity and on reasons for expediting the appeal.
May 31, 2022	Case Management call with Lauwers J.A. – submissions on comity/expediting the appeal.
June 20, 2022	Parties meeting with Myers J. (presumably to set out timeline).
June 27, 2022	Answers filed in New York Court.
July 8, 2022	Document Demands (New York).
July 12, 2022	Status Conference (New York).
Jul 25, 2022	Response to Document Demands (New York).
September 14	Appeals of Myers J. motion decision scheduled in Court of Appeal for Ontario.
October 28, 2022	Document Production (New York).
October 30, 2022	Fact Discovery (New York).
December 15, 2022	Depositions (New York).
February 28, 2023	Expert Discovery (New York).
March 15, 2023	Note of Issue (New York) – Dispositive Motions 45 days later.

• New York procedural steps in dark blue.

[1] A chronology of the proceedings in Ontario and New York is attached as an appendix.