The Cape Apricot, which was owned by Leo Ocean SA (the first defendant), hit a terminal trestle, which was owned and operated by the plaintiffs, at Roberts Bank, British Columbia. The damage caused by the incident exceeded USD 60,000,000. The plaintiffs filed an action in the Supreme Court of British Columbia and obtained a warrant for the vessel's arrest.

During negotiations for the release of the vessel, the first defendant offered to provide a Letter of Undertaking (LOU) as a security measure in exchange for the release of the vessel. The plaintiffs raised the possibility of arresting sister ships. A revised LOU which offered security in the amount of USD 26,000,000 was accepted by the plaintiffs. In this LOU, there was a provision stating that the plaintiffs were barred from arresting any other ships under the first defendant's name.

At trial it was argued by the plaintiffs that: first, the agreement to accept the LOU did not bind them, since the agreement to accept the LOU was vitiated by mistake and coercion; and secondly, the plaintiffs should have the right to arrest both the offending ship and its sister ships.

The first defendant denied any mistake or coercion sufficient to void the plaintiffs' acceptance of the LOU. Kawasaki Kisen Kaisha Ltd (the second defendant) further submitted that, according to s 43(8) of the Federal Courts Act, RSC 1985, c F-7, the plaintiffs had no right to arrest multiple ships.

Held: Motion dismissed.

There was a legally binding agreement between the plaintiffs and the defendants. There was no error during the negotiation of the LOU, and therefore no basis to set aside the agreement on the ground of mistake. The plaintiffs' arguments about economic duress were also ill-founded.

The issue regarding the possibility of arresting multiple ships involved interpretation of s 43(8) of the Federal Courts Act, RSC 1985, c F-7. Section 43(8) provides that 'The jurisdiction conferred on the Federal Court by section 22 may be exercised in rem against any ship that, at the time the action is brought, is owned by the beneficial owner of the ship that is the subject of the action'. The word 'any' is ambiguous. However, such ambiguity is not determinative to the plaintiffs' question. The word 'any' needs to be interpreted in the context in which it is used. By reference to the use of the singular 'ship', it was clearly that Parliament's intention was that only one ship is allowed to be arrested. Otherwise, Parliament could have used the words 'any ships' or 'any other ship'.

The right to arrest sister ships was addressed in the International Convention for the Unification of Certain Rules relating to Arrest of Sea-Going Ships 1952 (Arrest Convention 1952). Article 3.1 of the Arrest Convention 1952 provides that '… a claimant may arrest either the particular ship in respect of which the maritime claim arose, or any other ship which is owned by the person who was, at the time when the maritime claim arose, the owner of the particular ship'.

Therefore, although Canada is not a contracting State to the Arrest Convention 1952, if the Parliament of Canada had intended to introduce a fundamental change in the matter of multiple arrests of ships into the domestic statute, there would have been a clear expression of that intention.

Thus, the plaintiffs were not entitled to arrest a sister ship to the Cape Apricot once they had exercised their right to arrest the offending ship.