This was a cargo claim involving the shipment of 18,276 kg of silver ingots on a container yard to container yard (CY/CY) basis from Busan, Korea, to Vancouver, Canada, on the Georg Maersk, with on-carriage by rail to Montreal, pursuant to a multimodal transport bill of lading issued in Seoul by Woowon Sea & Air Co Ltd (Woowon). Clause 4 of the bill of lading provided:

The conduct evidenced by or contained in this Bill of Lading shall be governed by the laws, statutes and regulations where this Bill of Lading is issued except as may be otherwise provided for herein, and any action against the Carrier thereunder shall be brought before the court where the Carrier of any statutory protection or exemption or limitation of liability authorized by any applicable laws, statutes and regulations of any country [sic].

The vessel arrived in Vancouver on 7 January 2020. On 10 January 2020, the cargo was loaded onto a Canadian National Railway Co (CN) rail car destined for Montreal, where the container arrived on 16 January 2020. In the interim, on 6 January 2020, the maritime carrier AP Moller-Maersk A/S (Maersk) emailed the pick-up code to Binex Line Corp (Binex). That email was accessed by thieves who used the information to divert the cargo to a warehouse in LaSalle, Quebec, where it disappeared.

The intended consignee, Brink's Global Services Korea Ltd (Brink's) sued Woowon in the Canadian Federal Court. Woowon brought parallel proceedings against Brink's in the Seoul Southern District Court in South Korea, seeking an order that it was not liable for the stolen cargo. Woowon sought a stay of the Canadian proceedings in favour of the South Korean proceedings on the basis of the exclusive jurisdiction clause in the bill of lading. Brink's and Binex resisted Woowon's stay application.

Held: Woowon's stay application is dismissed.

The Marine Liability Act, SC 2001, c 6 (the MLA) provides for statutory liability issues involving shipping and carriage of goods, including apportionment of liability and limitations on liability. The issue is whether 46 of the MLA applies to the facts of the case. Section 46 exists to establish Canada’s jurisdiction in spite of a jurisdiction clause stipulating a foreign jurisdiction in cases where there is a contract for carriage of goods by water.

Woowon argues that s 46 only applies to carriage of goods by water, and that this was a case involving multimodal transport. Brink’s argues that only one requirement of s 46 must be met. In this case, it is the fact that the port of discharge was in Canada. Brink’s disagrees that the bill of lading in this case is not a contract for 'carriage of goods by water', but instead a 'multimodal transport bill of lading'. While 'carriage of goods by water' is not defined in the MLA, Brink’s notes that the definition is supplied by art 10 of the Hague-Visby Rules, which applies by virtue of s 43 of the MLA: 'The Hague-Visby Rules have the force of law in Canada in respect of contracts for the carriage of goods by water between different states as described in Article X of those Rules.'

Brink’s submits that the criteria of art 10 are satisfied, so the application of the Hague-Visby Rules to 'every carriage of goods between ports in two different States' should be read into the MLA to supply a definition for the words 'carriage of goods by water'.

Section 46(1)(a) of the MLA applies because the actual port of discharge on the carriage by water component of the multimodal bill of lading was Canada. The carriage of the goods was not limited by the bill of lading to only the water carriage component. While the MLA speaks only to carriage of goods by water, Woowon’s obligations under the bill of lading extend to the entire transport of the cargo.

Thus, prima facie, Brink’s is able to rely upon s 46 to pursue this claim in Canada. It also should be noted that s 46 lists three separate circumstances which give rise to the right to institute judicial proceedings in Canada. The three circumstances are disjunctive as noted by the 'or' between ss 46(1)(b) and (c). Therefore, having met the requirement of s 46(1)(a), this action is properly brought in Canada notwithstanding the jurisdiction clause in the bill of lading. Arguably, s 46(1)(b) is also satisfied as Woowon has an agency presence in Canada through the auspices of Binex which it has appointed its agent for the US and Canada.

Further, the Federal Court of Appeal has held that this provision allows a party to proceed in Canada for a cargo loss where there is a jurisdiction clause in favour of a place other than Canada: see Mitsui OSK Lines Ltd v Mazda Canada Inc 2008 FCA 219.

As far as the issue concerning 'carriage of goods by water' is concerned, one can refer to the Hague-Visby Rules to assist in understanding this concept. Section 43 of the MLA imports the Rules into the law of Canada. Article 10 specifies that those Rules apply to all contracts for the carriage of goods. All three of the provisions of art 10 are met in this case. First, the bill of lading specifies that the cargo will be carried in an ocean-going vessel and therefore the carriage will be by water. Second, the bill of lading was issued in Korea, a contracting State. Third, the carriage by water was from one contracting State, Korea, to another, Canada. It is illogical that a bill of lading should be parsed into separate pieces and that only one segment of the carriage is captured by s 46. Further support for this conclusion can be found in ZI Pompey Industrie v ECU-Line NV 2003 SCC 27 (CanLII), [2003] 1 SCR 450.

An application of the forum non conveniens doctrine, or the strong cause test laid down in The Eleftheria [1969] 1 Lloyd’s Rep 237, and restated by the Supreme Court in Pompey, do not support exercising the Court’s discretion under s 50(1) of the Federal Courts Act to grant a stay. Canada is the appropriate jurisdiction for this claim and the motion is therefore dismissed.

[For Woowon's unsuccessful appeal, see Brink's Global Services Korea Ltd v Woowon Sea & Air Co Ltd 2022 FC 1512 (CMI2034).]