Court File and Parties

COURT FILE NO.: Divisional Court 283/03 02-CL-4652

DATE: July 14, 2003

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

ABN AMRO BANK N.V., et al.

Plaintiffs

• and -

BCE INC.

Defendants

Counsel: Daniel MacDonald and David Kent, for the Plaintiffs Thomas Heintzman, Q.C. and Darryl Ferguson, for the Defendants

HEARD: June 17, 2003

ENDORSEMENT

Senior Justice Benotto

[1] This is a motion for leave to appeal the decision of Mr. Justice Farley wherein he dismissed the Defendant’s motion to stay or dismiss the action on the basis that:

1. The Plaintiffs claims are the exclusive jurisdiction of the courts in Quebec or New York, and
2. The courts of Quebec, and not Ontario, are the forum conveniens for the motion.

[2] The Plaintiffs seek to recover 1.19 billion dollars U.S. loaned to them by Teleglobe Inc., a company with its head office in Quebec. The Plaintiffs made the loan to Teleglobe pursuit to loan documents negotiated and delivered in Quebec. The documents state that they are subject to the law in Quebec and New York and the courts of Quebec and New York have jurisdiction over the parties to the contract. The statement of claim alleges that BCE was the “true contracting party and the alter ego of Teleglobe.”

[3] The Defendants allege that:

1. The Plaintiffs are bound by what they have claimed in their Statement of Claim, in particular, the alter ego claim.
2. The exclusive jurisdiction clause should have been applied.
3. The Quebec law is applicable to this matter.
4. The Quebec law can more appropriately deal with the issues.
5. Ontario is not the forum conveniens.

[4] Justice Farley addressed each of these points in his reasons. He found that the Defendant did not meet the burden of establishing that Ontario lacks jurisdiction or another jurisdiction is more appropriate. In doing so, he carefully analyzed the positions of each party. While the Defendant takes issues with each of Justice Farley’s conclusions, he did not misapprehend the facts, nor did he misapply the law.

[5] The Defendant says that he did not apply the correct principles: namely, those laid down by Z.I. Pompey Industrie v. E.C.U. Line N.V., 2003 SCC 27; Released May 1, 2003; File No. 28472.

[6] That decision was released by the Supreme Court of Canada after Justice Farley’s. However, on close analysis, it is clear that he did follow those principles. Pompey provides that:

Forum selection clauses are common components of international commercial transactions, and are particularly common in bills of lading. They have, in short, “been applied for ages in the industry and by the courts:” Decary J.A. in Jian Sheng, supra at para. 7. These clauses are generally to be encouraged by the courts as they created certainty and security in transaction, derivatives of order and fairness, which are critical components of private international law: La Forest J. in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 at pp. 1096-97; Holt Cargo Systems In.c v. ABC Containerline N.V. (Trustees of) [2001] 3 S.C.R. 907, 2001 SCC 90, at para. 71-72. The “strong cause” test remains relevant and effective and no social, moral or economic changes justify the departure advanced by the Court of Appeal. In the context of international commerce, order and fairness have been achieved at least in part by application of the “strong cause” test. This test rightly imposes the burden on the plaintiff to satisfy the court that there is good reason it should not be bound by the forum selection clause. It is essential that courts give full weight to the desirability of holding contracting parties to their agreements. There is no reason to consider forum selection clauses to be no-responsibility clauses in disguise. In any event, the “strong clause” test provides sufficient leeway for judges to take improper motives into consideration in relevant cases and prevent defendants from relaying on forum selection clauses to gain an unfair procedural advantage.

[7] This case makes it clear that the Plaintiff’s burden arises once it is determined that the jurisdiction clause binds the parties. Justice Farley did not find that the clause was binding. He therefore did not err on this issue.

[8] On the issue of forum non conveniens, I agree with Justice Farley’s approach. Pompey provides:

There is a similarity between the factors which are taken into account when considering an application for a stay based on a forum selection clause and those factors which are weighed by a court considering whether to stay proceedings in “ordinary” cases applying the forum non conveniens doctrine: .... The latter inquiry is well settled in Canada: Amchem Products Inc. v. British Columbia (Workers Compensation Board) ... In the latter inquiry, the burden is normally on the defendant to show why a stay should be granted, but the presence of a forum selection clause in the form is, in my view, sufficiently important to warrant a different test, one where the starting point is that parties should be held to their bargain, and where the plaintiff has the burden of showing why a stay should not be granted. I am not convinced that a unified approach to forum non conveniens, where a choice of jurisdiction clause constitutes but one factor to be considered, is preferable.

In my view, a separate approach to applications for a stay of proceedings involving forum selection clauses in bills of lading ensures that these considerations are properly taken into account.

[9] The case makes it clear that stay motions are to be treated differently. Justice Farley analyzed all the factors and concluded that Ontario was not forum non conveniens and that it was not clear that Quebec is the more appropriate forum. He did not misapprehend the facts. He considered the facts, applied the relevant law and came to a conclusion.

[10] There are no conflicting decisions and there is no reason to doubt the correctness of his order. I do not agree that there is serious debate on the issue. The motion for leave to appeal is dismissed.

[11] If the parties cannot agree on costs, the may exchange and send me written submissions within 30 days.

Benotto J.

Released: July 15, 2003