Araya v Nevsun Resources Ltd., 2017 BCCA 401
A group of Eritrean refugees are one step closer to trial in a Canadian court case alleging serious human rights abuses against a Canadian mining company, after the British Columbia Court of Appeal dismissed a strike-out application. The decision is the first time that a Canadian appellate court has allowed a tort claim for breaches of international law peremptory norms – such as the prohibition of slavery – to proceed.
In November 2014, a group of Eritrean refugees brought proceedings against Nevsun Resouces Ltd (Nevsun), a Canadian mining company.
Nevsun owns 60% of the company that owns and operates the Bisha mine located in Eritrea. The remaining 40% is owned by the Eritrean government.
Through its subsidiary, Nevsun is alleged to have engaged the Eritrean military and corporations controlled by the military to construct the mine. The plaintiffs allege that they were conscripted to Eritrea’s National Service Program and forced to work at the mine against their will. They allege workers were forced to work in extreme heat conditions, suffered beatings as punishments and were provided with insufficient food and inadequate housing. The plaintiffs contend that Nevsun was complicit in the use of forced labour, slavery, torture, inhumane or degrading treatment and crimes against humanity.
The plaintiffs seek damages against Nevsun pursuant to:
- private law torts, including conversion, battery, unlawful containment, negligence, unlawful conspiracy and unjust enrichment; and
- in a more novel argument, breaches of customary international law (CIL) in the form of peremptory norms (jus cogens), including the prohibition on forced labour, slavery, torture, inhumane and degrading treatment and crimes against humanity. These peremptory norms are fundamental principles of international law from which no derogation is ever permitted.
In 2016, Nevsun brought three applications to prevent the case proceeding to a hearing:
- Forum application - Nevsun sought to stay the proceeding on the ground that Eritrea rather than British Columbia was the appropriate forum for the proceeding. Nevsun contended that Eritrea is the location where the alleged wrongs took place, most witnesses are located in Eritrea and the proper law to be applied is Eritrean. The plaintiffs opposed this application on the basis that there was a real risk the Eritrean legal system would not provide a fair process.
- Act of state application - Nevsun sought for the proceeding to be dismissed pursuant to the act of state doctrine, which precludes a domestic court from adjudicating on the legality or validity of legislation of or acts done by a foreign state. Nevsun contended that the wrongs alleged against it were derivative to actions of the state, as Nevsun was alleged to have aided, abetted, condoned and failed to prevent conduct on the part of Eritrea and its military.
- CIL application - Nevsun sought to have the causes of action based on CIL struck out as they were bound to fail given:
- there is no right in Canada to a civil remedy for acts of torture committed outside Canada; and
- CIL does not apply to corporations since corporations are not directly recognised as actors in international law.
The plaintiffs argued that the role of international law in Canada's common law is an open question.
Nevsun’s applications were dismissed by the chambers judge. Nevsun then appealed to the Court of Appeal.
The Court of Appeal dismissed Nevsun’s applications.
The Court recognised the significant difficulties of a trial in British Columbia, including the cost and inconvenience of transporting witnesses. However, these difficulties were not considered to “go to the root of the fairness of the trial process” in the same way that the plaintiffs’ objections did. In particular, the Court highlighted that:
- the plaintiffs may be considered to be traitors in Eritrea and could be prevented from returning;
- expert evidence indicated that the military refused to cooperate in the judicial process; and
- there is no consistent evidence law or means for foreign documents to be adduced in Eritrean courts.
Despite the practical difficulties of a trial in British Columbia, the Court did not consider that Nevsun had discharged its onus of proof to show Eritrea was the proper venue. The Court held that the chamber’s judge was right to prefer the jurisdiction in which the plaintiffs can assert their claims in a fair and impartial proceeding since justice seems unlikely to be done in Eritrea.
Act of state application
After a discussion of the status of the act of state doctrine and the U.K. decision of Belhaj v. Straw  UKSC 2014/0264, the Court held that the doctrine is part of the Canadian common law despite never having been directly applied. The Court recognised that the content of the doctrine is uncertain, with multiple formulations of the doctrine being proposed in the Belhaj judgment.
The Court held that the act of state doctrine did not apply in this instance regardless of the formulation. The key point was that the plaintiffs’ claims do not purport to challenge the legality or validity of Eritrea’s legislation or laws; the plaintiffs are only seeking compensation for Nevsun’s complicity in those acts. Additionally, the seriousness of the acts meant that the public policy exception (where the wrongs alleged cannot be justified by legislation or policy) would apply.
To succeed in striking out the plaintiffs' claims under CIL, Nevsun had to show that these claims were "bound to fail".
In previous cases, Canadian courts had declined to recognise a private cause of action for breaches of peremptory norms of international law. However, the Court distinguished these previous cases on the basis that they involved claims against a sovereign state, where the notion that states must not be subjected to each other’s jurisdiction was relevant.
The Court acknowledged that the plaintiffs face significant legal obstacles in pursuing claims under CIL. However, it did not consider that that the plaintiffs' claims are "bound to fail".
The Court noted that international law was “in flux” and that transnational law (relating to actions or events that transcend national boundaries) is continuing to develop. Significantly, the Court stated that "an incremental first step" towards the development of a private law remedy for breaches of international law could be appropriate in this instance given that no state is a party, Eritrea is protected by state immunity, and the prohibition against torture is universally accepted.
The Court of Appeal’s decision may yet be subject to a Supreme Court appeal. Nonetheless, this decision marks an important shift in the judiciary’s approach to corporate accountability that could dramatically impact Canadian entities operating abroad.
The decision was particularly notable for the Court of Appeal’s willingness to actively participate in the development of transnational law. As the Court highlighted in the opening paragraph of the judgment, the significance of this case lay in the two paths available:
The overarching question in this case is whether Canadian courts, which have thus far not grappled with the development of what is now called ‘transnational law’’ might also begin to participate in the change described; or whether we are to remain on the traditional path of judicial abstention from the adjudication of matters touching on the conduct of foreign states in their own territories – even where that conduct consists of violations of peremptory norms of international law, or jus cogens.
The Court opted for the latter approach and in doing so took a major step towards improving access to justice for overseas victims of corporate human rights abuses. The decision complements other initiatives currently underway in Canada to improve corporate accountability, such as the recent creation of an ombudsperson to monitor human rights abuses by Canadian mining companies operating overseas.
Given the current political focus on “modern slavery” in the supply chains of our own companies, the Nevsun case will undoubtedly be watched closely by human rights lawyers and advocates in Australia. In contrast to Canada, the Australian courts have traditionally taken a more conservative approach to the development of transnational law and particularly the incorporation of CIL into our domestic law. If the Eritrean plaintiffs ultimately succeed at trial, however, this case could be a catalyst for further developments on this issue in Australia.
The full text of the decision can be found here.