Anti-Suit Injunctions Restraining Litigation Outside Canada: The Amchem Decision

Posted on : December 31, 1997

In the 1993 case, Amchem Products Inc. v. B.C. (W.C.B.), [1993] 1993 CarswellBC 47, The Supreme Court of Canada dealt extensively with the issues surrounding the more aggressive anti-suit injunction remedy.

Operation of Anti-Suit Injunction

An anti-suit injunction operates in personam and restrains the litigant from launching or continuing litigation in a foreign jurisdiction in favor of the domestic jurisdiction. The injunction does not purport to restrain the foreign court itself from taking or maintaining jurisdiction.

The choice of the appropriate forum is, according to the Supreme Court of Canada,

“…to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of the others in a jurisdiction that is otherwise inappropriate” {Amchem, supra at p. 912}.

In most cases the party seeking the ant-suit injunction will first bring an application at the foreign (outside of Canada) court seeking a stay of the foreign proceeding before seeking an anti-suit Injunction. It is not, however, a condition precedent that the Defendant seek and be denied a stay of the foreign proceeding {Amchem, supra at para. 56; Hudon v. B.C. Geos Language Corp. (1997) 34 O.R. (3d) 14 at p. 21 (Ont. Dist. Ct.).}.

Requirement to Claim Permanent Injunction

As a general rule, an interlocutory injunction is available only in proceedings where a permanent injunction is claimed. In the case of an anti-suit injunction, this rule does not apply {Amchem, supra at para. 56; 930-931; Hudon, supra at p. 19}. Likewise, a permanent injunction is usually only obtainable after trial, with viva-voce evidence, but a permanent anti-suit injunction is obtainable upon motion with affidavit evidence {Amchem, supra at para. 56}.

Test for Anti-Suit Injunction

As a preliminary consideration, the court must inquire whether the party seeking the injunction has alleged that the domestic forum is the most appropriate forum and whether that forum is potentially an appropriate forum {Amchem, supra, at para. 57}. If there is no such allegation, then the injunction application will fail.

The Supreme Court of Canada has set forth a two-part test to be applied when determining whether an anti-suit Injunction should be granted:

1.       In conformity with the forum non conveniens test, is there another forum that is clearly more appropriate than the domestic forum? {Amchem, supra at para. 58}.

2.       Is it unjust to deprive the plaintiffs of a judicial or other advantage in the foreign jurisdiction, having regard to the extent that the party and the facts are connected to that forum? {Amchem, supra at para. 60}.

Part 1: Forum Non Conveniens

The first step “… is to determine whether the domestic forum is the natural forum, that is the forum that on the basis of relevant factors has the closest connection with the action and the parties… [T]he court must determine whether there is another forum that is clearly more appropriate” {Amchem, supra at para. 58}.

In order to determine which forum is the “natural forum” the court must weigh all factors relating to each party’s connection to the jurisdiction and the action’s connection to the jurisdiction. Such factors will include:

a.       the governing law;

b.       the location in which the parties carry on business;

c.       the location of the core of the action (or where the principal facts in dispute are concentrated);

d.       geographic factors suggesting a natural forum;

e.       the location in which the majority of witnesses reside;

f.        the location of key witnesses;

g.       avoidance of a multiplicity of proceedings;

In this regard see the following authorities: {Amchem, supra; 56ABB Power Generation Inc. v. CSX Transportation, [1996] O.J. No. 952 (Ont. Gen. Div.); SDI Simulation Group Inc. v. Chameleon Technologies Inc. (1994), 34 C.P.C. (3d) 346 at 351 (Ont. Gen. Div.); Ontario New Home Warranty Program v. General Electric Company, [1998] O.J. No. 173 (Ont. Gen. Div.)}.

The second part of the test is not reached unless the domestic court concludes that the foreign court has assumed jurisdiction “…on a basis that is inconsistent with principles relating to forum non conveniens and that the foreign court’s conclusion could not reasonably have been reached had it applied those principles,” {Amchem, supra, at para. 59}.

Part 2: Loss of Advantage

The second element of the test makes the inquiry, “… whether it is unjust to deprive the party seeking to litigate in the foreign jurisdiction of a juridical or other advantage, having regard to the extent that the party and the facts are connected to that forum…” {Amchem, supra at para. 60}. According to the Supreme Court in Amchem:

“A party can have no reasonable expectation of advantages available in a jurisdiction with which the party and the subject matter of the litigation has little or no connection. Any loss of advantage to the foreign plaintiff must be weighed as against the loss of advantage, if any, to the defendant in the foreign jurisdiction if the action is tried there rather than in the domestic forum.” {Amchem, supra at para. 60}.

Formerly, the court would determine whether allowing the Plaintiff to continue with the foreign proceedings would be “oppressive” or “vexatious” to the Defendant. Amchem directs courts to weigh the injustice that would result if the injunction were granted against the injustice that would result if the injunction was not granted {Amchem, supra at para 59}.

The pre-eminent type of loss resulting in injustice will be the loss of some juridicial advantage, rather than the loss of some other personal advantage. An example of the type of “other” loss, which might be weighed by the Court, is where an individual is required to litigate in a “…distant forum with which he or she has no connection.” {Amchem, supra at para. 60}. The Supreme Court explicitly declined to enumerate the possible sources of injustice, which would be considered, preferring to leave each case to be decided on its facts {Amchem, supra at para. 60}.

 

 

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