Overview of the Landmark Ruling
The Supreme Court of Canada has permitted a group of Eritrean workers to pursue a claim in BC alleging violations of customary international law against a Canadian mining company operating in Eritrea.
In Nevsun Resources Ltd. v. Araya, the defendant, Nevsun Resources Ltd. ("Nevsun"), brought a motion to strike the claims of the Eritrean plaintiffs based on two legal theories: first, that the plaintiffs' claim was barred by the act of state doctrine, which precludes domestic courts from assessing sovereign acts of a foreign government; and second, that the plaintiffs' claims based on customary international law had no reasonable prospect of success because breach of customary international law is not a cause of action in Canadian common law.
While seven of nine judges agreed that the act of state doctrine did not apply and therefore could not be the basis on which the plaintiffs' claims were struck, a narrow five-judge majority concluded that it was not "plain and obvious" that the claims for breach of customary international law would not succeed at trial. In so doing, the majority concluded that customary international law is part of Canadian common law and that it is permissible to bring claims alleging breaches of customary international law.
This is the first time in Canadian legal history that the Supreme Court of Canada has concluded that all of customary international law forms part of Canadian common law. As the dissent of Justices Brown and Rowe points out, this represents a significant departure from previous treatment of customary international law in Canadian common law. The Court's application of customary international law to corporations is also a significant change. Previously, customary international law was seen as applicable only to state actors and not to private actors such as corporations.
Although the case does not decide the plaintiffs' claims for breach of customary international law on the merits, it may result in more actions being brought against Canadian companies operating in countries notorious for human rights concerns by alleging breaches of customary international law. These cases may be difficult to litigate, given the novelty of the cause of action and lack of precedent (for the time being) for judges hearing these claims on their merits at trial. It remains to be seen how Canadian courts will deal with claims for breach of customary international law on their merits.
This case arises from the construction of the Bisha mine in Eritrea. The mine is owned by a corporation which Nevsun in turn owns. Nevsun exercises effective control over the Bisha mine corporation and holds the power to appoint the majority of board members, including the chair of the Bisha mining corporation, who was also the CEO of Nevsun. The Bisha mine corporation used Eritrean subcontractors to build the mine, including two for-profit entities run by high-ranking members of the Eritrean military and ruling political party.
The plaintiffs are a group of Eritrean nationals who were conscripted into Eritrea's mandatory national military service and worked for the two Eritrean subcontractors. They claimed they were forced to work on construction of the Bisha mine long after their military service term was supposed to end. They also claimed they were subject to degrading and inhumane treatment, including deprivation, physical assault, threats, and torture, in order to control them and force them to continue working on the mine's construction.
Supreme Court of British Columbia Decision
The trial level reasons addressed five pre-trial applications brought by Nevsun. Three of those applications were not at issue before the Supreme Court. For more information on the rulings, please see our previous post here.
At issue before the Supreme Court were two applications to strike the plaintiffs' claims. Nevsun argued that the plaintiffs' claims should be struck because (1) BC courts had no jurisdiction to determine the legality of the actions of a foreign state under the common law "act of state" doctrine; and (2) certain novel tort claims related to international human rights abuses should be struck as they had not been recognized in Canada. The applications judge ruled in favour of the plaintiffs on both issues. The applications judge concluded that the "act of state" doctrine as advanced by Nevsun had not been recognized in Canadian law, so it could not be a basis on which to strike the plaintiffs' claims. The judge also held that it was possible that novel tort claims related to international human rights abuses could exist in Canadian law, and therefore the actions should not be struck on that basis either.
It is important to note that since these were pre-trial applications to strike, the test applied was whether it was "plain and obvious" the plaintiffs' claims would fail. This test represents a very low bar for the plaintiffs to clear (correspondingly, it is a very high bar for the defendants to meet on the application). On a motion to strike, the court must assume all the facts pleaded by the plaintiffs are true. Even if the plaintiffs succeed on opposing applications to strike, it does not definitively establish that the novel torts claimed actually exist in Canadian law or that the plaintiffs will succeed at proving their claims. It simply gives the plaintiffs an opportunity to advance these when the case goes to trial.
British Columbia Court of Appeal Decision
Nevsun appealed three issues to the British Columbia Court of Appeal: jurisdiction, whether the "act of state" doctrine applied and therefore barred the plaintiffs' claims, and whether the novel tort claims existed in Canadian law. In a unanimous decision, the British Columbia Court of Appeal upheld the application judge's decision on all three issues. The Court agreed that: (1) BC was the appropriate forum to hear the claims; (2) that the "act of state" doctrine did not apply to the claims; and (3) the novel tort claims advanced could exist in Canadian law.
Reasons of the Supreme Court of Canada
Only the applications to strike on the basis of the "act of state" doctrine and the novelty of the breach of international law claims were appealed to the Supreme Court of Canada.
On the issue of whether the claims were barred by the "act of state" doctrine, seven judges of the Supreme Court of Canada agreed with the application judge's reasons. They concluded that the doctrine, which as advanced would prevent courts from ruling on whether the actions of a foreign state contravene international law, did not exist as a bar to adjudication of the plaintiffs' claims. Justices Côté and Moldaver, dissenting, concluded that the act of state doctrine applied and barred the plaintiffs' claims.
On the issue of whether it was "plain and obvious" that the claims for breach of international law would not succeed, Justice Abella, writing for a five-judge majority, concluded that it was not "plain and obvious" that the claims would not succeed. In her reasons, Abella J. concluded that breaches of customary international law could found a valid cause of action under Canadian common law. In their dissent, Justices Brown and Rowe concluded that "breach of customary international law" is not a valid cause of action in Canada and it was plain and obvious that those claims would not succeed. Justices Côté and Moldaver concurred with the dissenting reasons of Justices Brown and Rowe.
What is Customary International Law?
The plaintiffs relied on customary international law as the source of their claims for forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity. Customary international law is essentially a body of unwritten rules created by common international practices. In order for a practice to be considered an enforceable norm of customary international law (also called jus cogens), there are two requirements: (1) that the practice have general, widespread, representative and consistent adoption among states and (2) that the practice must be seen as a binding legal right or obligation from which no derogation is permitted, as opposed to mere usage or habit (also called opinio juris). Historically, it was understood as creating obligations by which states, but not private actors, had to abide.
The majority and dissenting opinions agree that slavery, torture, cruel, inhuman and degrading treatment, and crimes against humanity are enforceable norms of customary international law and that no state can legally engage in those practices. Where the majority parts ways with the dissenting opinions is with respect to the effect of those enforceable norms in Canadian common law, as distinct from courts of international law. In particular, the majority and dissenting opinions disagree about whether norms of customary international law create causes of action under Canadian law if they have been breached.
The Majority Opinion: Rights Require Remedies
Three main points arise from the majority opinion: (1) all enforceable norms of customary international law have formed and continue to form part of the Canadian common law; (2) remedies for violations of customary international law are not limited to actions against states and should include actions against private actors, including corporations; and (3) there could be specific novel torts for breaches of customary international law that are distinct from existing torts.
First, rather than maintaining a distinction between "prohibitive" and "mandatory" norms of customary international law, the majority held that all norms of customary international law form part of and are adopted into Canadian common law. Having adopted all norms of customary international law into domestic law, the majority reasoned that Canadian courts would have the power—absent legislation occupying the field on this issue—to craft private law remedies for violation of the international norms rather than being limited to striking down or altering laws.
Second, the majority decision recounted the historical development and current state of international human rights law, leading it to extend the application of customary international law to private actors in addition to states. It stressed that human rights law has a unique human-centric nature, as opposed to most international law which governs state-to-state relations. Although the majority conceded that no other nation has recognized a private right of action against corporations, it stated that no nation had excluded such action either. It reasoned that some violations of customary international law could result in remedies against not only states, but also "private actors", including corporations, in order for them to be effective.
Finally, the majority considered whether the novel tort claims could exist in Canadian law or whether they were already adequately covered by existing categories of claims, such as battery, unlawful confinement, and unjust enrichment. In concluding that these novel torts could exist, the majority stated that violations of international human rights laws have a distinct character from existing domestic torts. These abuses have a special public nature to them and violations of the underlying norms "shocks the conscience of humanity". As such, they are not merely amalgams of existing tort claims and relying solely on domestic torts may not do justice in recognizing the harm.
Although the majority decision does not set out the existence of these novel torts, it provides the underlying framework to allow plaintiffs to advance such claims in the future and provides a foundation on how to prove claims related to international human rights abuses.
The Dissent on Customary International Law: Overreach and Uncertainty
Four judges dissented on the issues related to adoption of customary international law into Canadian common law, with Justices Moldaver and Côté agreeing with the reasons of Justices Brown and Rowe on this issue.
The disagreements between the dissent and the majority fall into three main categories.
- Judicial creep:
Justices Brown and Rowe expressed concern that adopting and
integrating mandatory norms of customary international law into the
common law was a significant judicial intrusion into the
legislative sphere. They pointed out that there is a difference
between prohibitive rules—which allow courts to set aside
executive actions and laws that violate customary international
law—and mandatory rules, which, if adopted into Canadian law
as the majority suggested, would allow the court to "devise a
regulatory scheme out of whole cloth". They stated that
customary international law should be constrained and limited to
the interpretive context. Such law should only be used to ensure
that domestic laws and executive action do not conflict with
international human rights law. Indeed, that is the use to which
customary international law was put in Canadian common law prior to
this decision. Courts were limited to applying the assumption that
government and legislatures did not intend to violate customary
international law and interpreting laws in harmony with
international obligations. Breach of customary international law
did not stand on its own as a cause of
- The creation of novel private
rights: Justices Brown and Rowe stated that while
customary international law certainly includes rules against human
rights abuses, there is no enforceable norm recognized by any
nation that extends this to create a private right to sue
corporations. They concluded that such a remedy cannot be accepted
international practice. Further, they opine that permitting claims
for breach of customary international law to be brought against
private actors—when the state of international law itself was
uncertain on whether the novel tort claims pleaded by the
plaintiffs even existed—would create significant uncertainty
in Canadian domestic law. The dissent expressed doubt that
customary international law could create such a private right of
action when even the Canadian Charter of Rights of
- Pre-existing torts: The dissent applied the test for recognition of new tort claims in Canada and concluded they should not be recognized because they are already covered by existing domestic torts. For more information on the law in this area, please see our previous article on the Ontario Court of Appeal decision in Jones v. Tsige. Justices Brown and Rowe reasoned that these claims have a criminal law character which are not suited for private law remedies and that existing torts can take into account the specific nature of human rights abuses through increased damages and punitive awards.
Why This Case Matters
Although the majority decision does not definitively establish the existence of torts based on international human rights violations in Canadian courts, the reasons represent a significant leap in judicial thinking on the responsibilities and liability of Canadians corporations who operate internationally in jurisdictions where human rights abuses may occur. These reasons signal that the judiciary is taking notice of the evolution of corporate social responsibility from voluntary self-regulation to state-enforced regulatory schemes as advocated by international organizations such as the United Nations.
Importantly, corporations and other private actors may now be subject to legal claims in Canada rooted in customary international law. While the plaintiffs' ultimate likelihood of success in those claims was not considered in this case, the existence of a private law duty to conform with customary international norms introduces an additional layer of legal uncertainty and risk to corporations headquartered in Canada.
The strength of the dissenting reasons in this case may offer some guidance as the law develops. The major concern of the dissenting judges is that the expansive approach taken by the majority is too significant of a leap and will result in too much uncertainty in the scope of liability for Canadian corporations operating abroad. Since the majority left it open to the legislature to pass laws regulating the existence and scope of private law actions based on breaches of customary international law, provincial and federal legislatures may very well do that in order to encourage international businesses to maintain their headquarters in Canada. Without legislation in this area, it could become very difficult for Canadian corporations to accurately assess the risk and potential liabilities arising from being incorporated in Canada but operating in other countries in the short-term while Canadian courts grapple with the nature and scope of liability under customary international law.
It is certain that we will see more decisions throughout Canadian provincial courts, at both the pleadings stage and in later stages of litigation, concerning the scope of claims for breach of customary international law and the evidence required to prove them. It will be up to Canadian courts to define how this cause of action is pursued since these claims will now survive a motion to strike.
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