Supreme Court of Canada Rules Nevsun Can Be Sued in Canada for Events in Eritrea

On February 28, 2020, the Supreme Court of Canada released its decision in Nevsun Resources Ltd. v Araya, holding that the company could be sued in Canadian courts for alleged human rights abuses at its operations in Eritrea.

Background

Nevsun Resources Ltd. (“Nevsun”), a publicly traded British Columbia corporation, built and operated the Bisha mine in Eritrea. The mine was developed through a venture with the Eritrean government.

Three Eritrean workers started proceedings against Nevsun, alleging that they were conscripted to work in harsh conditions at the mine as part of the Eritrean government’s National Service Program.

In their claim, the workers sought damages from Nevsun for breach of customary international law prohibitions against forced labour slavery; cruel, inhuman or degrading treatment; and crimes against humanity. They also sought damages for breach of domestic torts, including conversion; battery; unlawful confinement; conspiracy; and negligence.

Nevsun brought a motion to strike the pleadings on the basis that the case was non-justiciable under the act of state doctrine, which precludes domestic courts from sitting in judgement on the sovereign acts of a foreign government. Nevsun also took the position that the claims based on customary international law should be struck because they have no reasonable chance of success.

The chambers judge dismissed Nevsun’s motion to strike, and this decision was upheld at the British Columbia Court of Appeal. Nevsun then appealed to the Supreme Court of Canada.

The Majority’s Reasons

In a split 5/4 decision, the Court dismissed the appeal. The majority held that, in contrast to other jurisdictions, the act of state doctrine and its underlying principles do not form part of Canadian common law and are not a bar to the Eritrean workers’ claims. Furthermore, Nevsun had not established that that the claims based on customary international law had no reasonable likelihood of success. The claims can therefore proceed in the courts of British Columbia.

In reaching this conclusion, the majority noted that although the act of state doctrine has been reaffirmed and reconstructed in other jurisdictions, Canadian common law has developed its own approach to the underlying principles. In particular, while Canadian courts assess foreign laws through a lens of deference, they retain discretion to decline enforcement where it would be contrary to public policy – such as violating customary international law.

Customary international law can be seen as the common law of the international legal system, evolving over time based on changing practice and acceptance. Human rights are a prominent feature of customary international law and are reflected through a network of conventions and international norms. Some of these norms, such as the prohibition of slavery, are accepted to be of such fundamental importance that no derogation is allowed.

As Canada has a long-standing practice of automatically incorporating customary international law into domestic common law, the majority reasoned that it was not “plain and obvious” that Canadian law cannot recognize a direct remedy for their breach. It was also not “plain and obvious” that a corporation should enjoy a blanket exclusion from liability for violations of “universal norms” of international law, although the majority noted that it would be for a trial judge to determine whether the norms relied on in this case are of such a character.

Dissenting Reasons

The dissenting justices reached two separate conclusions about the issues.

In reasons that dissented in part, Justices Russell Brown and Malcolm Rowe agreed that the act of state doctrine did not apply in Canada, but disagreed that customary international law was automatically a part of Canadian law. They wrote that it should not be incorporated into Canadian law because it is not the court’s role to do so – rather, that responsibility belongs to Parliament.

Justices Suzanne Côté and Michael Moldaver, meanwhile, found that international human rights law does not apply between individuals and corporations and that Canadian courts should not hear cases where it is alleged that a foreign state acted contrary to international law. Doing either would overstep the limits of the court’s institutional power.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.