Canada: ICLG Guide To Shipping Law 2013 - Canada Chapter


1.1 In the event of a collision, grounding or other major casualty, what are the key provisions that will impact upon the liability and response of interested parties? In particular, the relevant law / conventions in force in relation to:

i) Collision

Canada has adopted the Convention on the International Regulations for Preventing Collisions at Sea, 1972 with Canadian modifications, by the Collision Regulations, CRC c.1416, enacted pursuant to the Canada Shipping Act, 2001, S.C. 2001, c.26 ("CSA"), s.29(1).

Canada has also adopted the principles of proportionate fault for losses caused by two or more ships in collision, generally similar to the Collision Convention, 1910 by Canadian domestic legislation in the Marine Liability Act, S.C. 2001, c.6("MLA"), s.17.

CSA, s.148 imposes a duty to assist ships involved in a collision.

The Navigable Waters Protection Act, RSC 1985, c N-22 ("NWPA") has a primary objective of keeping Canadian waterways navigable and would apply to collisions or other casualties that occur in navigable waters. The owner or person in charge of a ship or other object that is obstructing navigation must mark the obstruction and notify the Canadian government, which may order, inter alia, that the obstruction be removed, destroyed, or sold (NWPA, ss.15-17).

The Shipping Casualties Reporting Regulations SOR/85-514 enacted pursuant to the CSA require the reporting of shipping casualties, which are broadly defined to include accidents and dangerous occurrences which could have resulted in a casualty. The Master or other person responsible for the ship must report without delay – and within 24 hours file a written report – to the Canadian government.

ii) Pollution

The primary international maritime pollution conventions having the force of law in Canada are:

  • The International Convention on Civil Liability for Oil Pollution Damage, 1992, as amended by the Resolution of 2000 ("Civil Liability Convention"), pursuant to MLA, s.48.
  • The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 as amended by the Resolution of 2000 ("Fund Convention"), pursuant to MLA, s.57.
  • The Protocol of 2003 to the Fund Convention as amended by the Resolution of 2000 ("Supplementary Fund Protocol"), pursuant to MLA, s.63.
  • International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 ("Bunkers Convention"), pursuant to MLA, s.69.
  • The United Nations Convention on the Law of the Sea, 1982 came into force in Canada in 2003.

The primary Canadian federal legislation imposing penalties, sanctions and reporting requirements for marine pollution is:

  • The Migratory Birds Convention Act, S.C. 1994, c.22. Permitting the deposit (release) of a substance harmful to migratory birds to waters that may be used by migratory birds, or a place from where it may enter such waters, is an offence (ss. 5, 13). The maximum penalty per offence for individuals is a $1,000,000 fine and 3 years' imprisonment; and, for vessels over 5,000 tonnes, a $500,000 fine.
  • The Fisheries Act (2012), RSC 1985, c. F-14. This prohibits the deposit into water frequented by fish of any substance deleterious to fish. The maximum penalty per offence is a $1,000,000 fine and 3 years imprisonment.
  • The CSA, 2001, (ss.165-184) Part 8 - Pollution Prevention and Response, inter alia, requires ship and oil handling facility operators to plan for and take steps to alleviate pollution and appoint response organizations. The Response Organizations and Oil Handling Facilities Regulation, SOR/95-405 pursuant to the CSA, inter alia, regulatesresponse organisations. The maximum penalty per offence under CSA, Part 8 is a $1,000,000 fine and 18 months' imprisonment.
  • The Canadian Environmental Protection Act, 1999, SC 1999, c 33. This Act, inter alia, regulates and prohibits the unauthorised disposing of pollutants in water. The maximum penalty for an offence by an individual is a $2,000,000 fine and 3 years' imprisonment; by a large revenue company, a $12,000,000 fine; and, by a ship over 7,500 tonnes, a $12,000,000 fine.

If the marine pollution also affects land, then the laws of Canada's relevant province or territory may apply, which vary and may impose reporting and response obligations and legal liabilities. For brevity, these are not included here.

iii) Salvage / general average

The International Convention on Salvage, 1989 has force of law in Canada pursuant to CSA, s.142(1). When adopting the convention, Canada reserved that it does not apply to maritime cultural property.

General average claims are recognised. Canadian courts would give great deference to UK court decisions about general average. Unusually, Canadian law recognises claims for general average contributions as "quasi-maritime liens", which are in rem claims giving the right to arrest the ship even after sale to a new beneficial owner; but, the law does not give them the same high priority ranking as a traditional maritime lien. See Federal Courts Act, R.S.S. 1985, CF-7 ss.22(2)(q) and 43(3).

iv) Wreck removal

Wrecks and wreck removal are governed by Part 7 (CSA, ss.153-164), which require a person finding a wreck to report it to the Receiver of Wreck, who may give directions regarding its delivery, safe keeping, destruction or sale. Canada is not a party to any international convention on wreck removal.

The NWPA applies to a wrecked or abandoned vessel that is obstructing navigable waters. NWPA, ss.15-18 allow the Canadian government to direct, inter alia, the removal and sale of the wreck and to recover expenses from the owner, master or person in charge of the wreck or any person whose fault caused the wreck.

(v) Limitation of liability

The Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the Protocol of 1996 ("LLMC") has the force of law in Canada pursuant to MLA, s.26(1), subject to Canada excluding the application of the LLMC to the shipowner's right to limit liability for claims for the raising, removal, destruction or rendering harmless of a ship that has been sunk, wrecked, stranded, or abandoned including anything that has been aboard that ship.

For ships less than 300 gross tons:

  1. the maximum liability for loss of life or personal injury to passengers is the greater of 2,000,000 SDR, or 175,000 SDR multiplied by the number of passengers the ship is authorised to carry or actually carries (MLA, s.28(1)); and
  2. the maximum liability for claims other than loss of life or personal injury to passengers described in (a) above is $1,000,000 for claims of loss of life or personal injury plus $500,000 in respect of any other claims (MLA, s.29).

Canada has adopted the Athens Convention Relating to the Carriage of Passengers and Their Luggage by Sea, 1974 as amended by Protocol of 1990 ("Athens Convention"). For details see question 3.1 below.

1.2 What are the authorities' powers of investigation / casualty response in the event of a collision, grounding or other major casualty?

The Canadian Transportation Accident and Safety Board Act, SC 1989, c.3 and the Transportation Safety Board Regulations, SOR/92-446 enacted pursuant to it, authorise Canadian Transportation Safety Board ("CTSB") investigators, inter alia,to interview witnesses, seize documents, examine the ship and documents, attend the location of the accident and attend any laboratory tests when there has been a reportable marine accident which is broadly defined to include situations where there is only the risk of collision or contact with the bottom. A report must be made by the Master or another responsible person to the CTSB in writing within 30 days of the incident.

Authorities other than the CTSB have powers of investigation depending on the circumstances, such as death, personal injury, and pollution. These may include the Coroner's office, the Royal Canadian Mounted Police or other local police forces (criminal investigation), federal Pollution Prevention Officers, Fisheries and Gaming Officers, Transport Canada Steamship Inspectors (for CSA violations) and Workers Compensation investigators.


2.1 What are the international conventions and national laws relevant to marine cargo claims?

The Hague-Visby Rules apply by force of law to shipments originating from Canada, pursuant to domestic Canadian legislation under MLA, s.43.

For inbound shipments to Canada, freedom of contract is allowed. The liability regime may be chosen by the contract or the law of the place of origin of the shipment, as determined by conflict of laws rules.

For carriage by water between places in Canada, Hague-Visby applies unless there is no bill of lading and the contract stipulates that Hague-Visby does not apply - pursuant to MLA, s.43(2). See Mercury Launch & Tug Ltd. et al v. Wells Fargo Equipment Finance Company et al, 2013 FCA 96.

2.2 What are the key principles applicable to cargo claims brought against the carrier?

Carriers may be held liable for damage to cargo on the principles of bailment, breach of contract, and negligence. When applicable, the Hague-Visby Rules may allow the carrier to limit its liability to the higher of two SDR per kilogram or 666.67 SDR per package. The rules also stipulate a one year suit time limit for cargo claims.

2.3 In what circumstances may the carrier establish claims against the shipper relating to misdeclaration of cargo?

When the Hague-Visby Rules apply, a carrier may establish a claim against the shipper where the shipper knowingly misstates the nature or value of the goods or when the shipper fails to disclose the dangerous nature of the goods being shipped by the carrier. Such claims may also be brought under the common law principles of breach of contract or tort.


3.1 What are the key provisions applicable to the resolution of maritime passenger claims?

Canada has adopted the Athens Convention, which has the force of law in Canada pursuant to MLA, s.37(1). There are some exceptions to the applicability of the Athens Convention, such as adventure tourism activities (MLA, s.37.1(1)).

For ships less than 300 gross tons:

  1. the maximum liability for loss of life or personal injury to passengers is the greater of 2,000,000 SDR or 175,000 SDR multiplied by the number of passengers the ship is authorised to carry or actually carries (MLA, s.28(1)); and
  2. the maximum liability for claims other than loss of life or personal injury to passengers described in (a) above is $1,000,000 for claims of loss of life or personal injury plus $500,000 in respect of any other claims (MLA, s.29).


4.1 What are the options available to a party seeking to obtain security for a maritime claim against a vessel owner and the applicable procedure?

Canada is not a party to any arrest convention.

Arrest of a ship to secure a claim is done by starting an in rem action in the Federal Court, then filing an Affidavit to Lead Warrant which: describes the claimant and the nature of the claim; states that the claim has not been satisfied; describes the ship including its name; and, for sistership arrest, the grounds to believe that the ship being arrested has the same beneficial owner as the wrongdoing ship. The Arrest Warrant and Statement of Claim are then served on the ship, after which time the ship cannot be moved without the consent of all parties or a Court Order.

Sisterships can be arrested. Federal Courts Rule SOR/98-106, 478 requires each such ship to be named as a defendant in the statement of claim.

The Federal Courts Rules do not authorise the court to accept a letter of guarantee from a P&I Club. However, the usual practice is to accept a P&I Club letter by agreement between the parties, despite the statutory right of the claimant to insist on a bail bond from a Canadian surety company or a domestic bank "guaranty" under Federal Courts Rule 486(1).

A Mareva injunction can be obtained attaching funds or other assets of the defendant including debts due. The claimant must establish that it has a strong prima facie case and that there is a genuine risk that the defendant will avoid payment by dissipating assets unless the injunction is granted.

Where the substantive claim is being litigated or arbitrated outside of Canada, or there is a non-Canadian jurisdiction clause, then proceedings may be commenced before Canadian courts to obtain security, and the Canadian proceedings later stayed.

The claimant is generally not required to provide counter security when arresting a ship, or obtaining a Mareva injunction. However, it is normally required when obtaining a Mareva injunction that the claimant give an undertaking to the court to pay any damages flowing from the injunction if the injunction is granted.

4.2 Where security is sought from a party other than the vessel owner (or demise charterer) for a maritime claim, including exercise of liens over cargo, what options are available?

A Mareva injunction may be sought against assets of the potential judgment debtor. See question 4.1 above for comments about Mareva injunctions.

A carrier may exercise a possessory lien over cargo pursuant to CSA, s.248. This allows the carrier, upon giving notice to the owner of the goods and any third party to whom possession of the goods is given, to preserve the carrier's lien. In addition to this statutory right, carriers, warehousemen and other bailees of goods generally have the right to maintain possessory liens for amounts due to them respecting the goods. In practice, if the lien is asserted, security is often posted by an interested party in order to release the goods and allow the claimant's possible future judgment to be paid from that security.


5.1 What steps can be taken (and when) to preserve or obtain access to evidence in relation to maritime claims including any available procedures for the preservation of physical evidence, examination of witnesses or pre-action disclosure?

A Court Order directing the preservation and access to evidence, or the giving of statements from non-party witnesses in maritime claims may be sought immediately after the incident by filing a motion in an action started in the Federal Court. Generally, equivalent procedures exist in the courts of the provinces or territories.

5.2 What are the general disclosure obligations in court proceedings?

Canadian courts have relatively broad rights of discovery. For example, the Federal Courts Rules require parties to disclose all documents within their knowledge that tend to adversely affect the party's case or to support another party's case. The concept of documents is broadly defined to include any electronic information.

In addition, the Federal Courts Rules allow the right of examination for discovery in which each party may question a representative of the opposing parties, under oath, about any issues that may be relevant to the action. This right is quite broad.


6.1 Describe the typical procedure and time-scale applicable to maritime claims conducted through: i) national courts (including any specialised maritime or commercial courts); ii) arbitration (including specialist arbitral bodies); and iii) mediation / alternative dispute resolution.

A typical action in the Federal Court of Canada is started by filing a statement of claim. The defendants are served within 2 months, after which they file statements of defence. Typically, the pleadings are closed in 6 months, and discovery of documents and discovery of witnesses takes place approximately 18 months after starting the action. Typically, a trial is held within 3 years after the action starts. These times vary, depending on the urgency, complexity, and diligence of the parties.

Mediation and methods of alternative dispute resolution are encouraged by Canadian courts. Often the parties are directed to mediate before the court will set a trial date. The time frame for court mediation is about 2 months.

6.2 Highlight any notable pros and cons related to Canada that any potential party should bear in mind?

Canada is a fast, inexpensive jurisdiction in which to arrest ships to obtain security for claims including those being litigated or arbitrated on the merits in other jurisdictions. Arrest is a simple procedure and it is not necessary to prove that there is a strong prima facie case or any other requirements for a Mareva injunction. Counter security is not required. Claims for wrongful arrest are rare and would only be awarded if the arrest is done in bad faith.

Procedures are relatively simple, for example, lawyers do not require a power of attorney to be able to act, and documents can generally be provided by email rather than original documents for most preliminary court proceedings including arrest.


7.1 Summarise the key provisions and applicable procedures affecting the recognition and enforcement of foreign judgments.

Canada's common law provinces and territories generally recognise foreign judgments based on common law principles. In most cases a foreign judgment creditor may enforce the judgment by starting an action in Canada or, in circumstances where reciprocal judgments are legislatively allowed, the foreign judgment may simply be registered pursuant to that legislation.

Canada is a party to the Convention between Canada and the United Kingdom of Great Britain and Northern Ireland Providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters - Canada-United Kingdom Civil and Commercial Judgments Convention Act, R.S.C., 1985, c. C-30. This allows reciprocal enforcement of judgments between most Canadian common law provinces and a small number of other reciprocating states, for example, parts of Australia, USA, Germany and Austria.

In certain maritime matters, foreign judgments may be registered as judgments of the Federal Court, where appropriate, upon filing a certified copy of the foreign judgment and an affidavit stating, inter alia, that the foreign judgment has not been satisfied and that it is final and cannot be appealed (Federal Courts Rule 329). Judgments for oil pollution damage under the Civil Liability Convention, the Fund Convention, the Supplementary Fund Protocol, and the Bunkers Convention may be registered in the Federal Court pursuant to MLA, ss.80-89.

7.2 Summarise the key provisions and applicable procedures affecting the recognition and enforcement of arbitration awards.

The New York Convention has the force of law in Canada pursuant to section 3 of the United Nations Foreign Arbitral Awards Convention Act, R.S.C. 1985, c.16, (2nd Supp). Also, the Commercial Arbitration Act, R.S.C. 1985, c.17 (2nd Supp) adopts into Canadian law the UNCITRAL Model Law on International Commercial Arbitration 1985.

Canadian courts lean toward enforcing arbitration clauses, and staying actions where it is reasonable to do so.


8.1 Describe any other issues not considered above that may be worthy of note, together with any current trends or likely future developments that may be of interest.

Canadian arctic sea routes are opening up rapidly to commercial shipping as a result of decreased arctic ice coverage.

This article first appeared in the first edition of The International Comparative Legal Guide to: Shipping; published by Global Legal Group Ltd, London (

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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