General MPP Carriers Ltd. v. SCL Bern AG et al., (2014) 456 F.T.R. 260 (FC)

• Judge: Strickland, J.
• Court: Federal Court (Canada)
• Case Date: June 10, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 456 F.T.R. 260 (FC);2014 FC 571

General MPP Carriers v. SCL Bern AG (2014), 456 F.T.R. 260 (FC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] F.T.R. TBEd. JL.007

General MPP Carriers Ltd. (plaintiff) v. SCL Bern AG, SCL Reederei AG, and the Owners and all others interested in the Ship "SCL Bern" (defendants)

(T-1331-14; 2014 FC 571; 2014 CF 571)

Indexed As: General MPP Carriers Ltd. v. SCL Bern AG et al.

Federal Court

Strickland, J.

June 14, 2014.

Summary:

The defendant SCL Bern AG (SCL Bern) was incorporated pursuant to the laws of Switzerland and was the registered owner of the M.V. "SCL Bern" (the Vessel). The defendant SCL Reederei AG (SCL Reederei) and the plaintiff MPP Carriers Ltd. (MPP) entered into a Shareholders' Agreement, which stated that those parties held 100% of the shares in SCL Bern. It also included provisions concerning a right of first refusal and prohibition on disposal of the shares. MPP alleged that notice under the Shareholders' Agreement was given triggering the share sale provisions, but payment was not received. MPP issued a Statement of Claim out of the Federal Court naming SCL Reederei and SCL Bern as in personam defendants and the Vessel as the in rem defendant. The Statement of Claim claimed that the defendants failed to pay MPP the amount owed for its ownership in SCL Bern in accordance with the Shareholders' Agreement and sought damages of USD $3,750,000. The Vessel was arrested. The defendants moved to strike out the Statement of Claim and to set aside the warrant of arrest issued against the Vessel on the basis that the court lacked jurisdiction to hear the dispute.

The Federal Court granted the motion. The court concluded that the heart of this matter was a shareholder's dispute and it fell outside the court's jurisdiction.

Admiralty - Topic 8041.1

Practice - Actions in rem - General - Jurisdiction - [See Practice - Topic 2241 ].

Courts - Topic 4024

Federal Court of Canada - Jurisdiction - Federal Court - Navigation and shipping - [See Practice - Topic 2241 ].

Courts - Topic 4026

Federal Court of Canada - Jurisdiction - Federal Court - Maritime and admiralty matters - [See Practice - Topic 2241 ].

Practice - Topic 2241

Pleadings - Striking out pleadings - Grounds - Lack of jurisdiction - The defendant SCL Bern AG (SCL Bern) was incorporated pursuant to the laws of Switzerland and was the registered owner of the M.V. "SCL Bern" (the Vessel) - The defendant SCL Reederei AG (SCL Reederei) and the plaintiff MPP Carriers Ltd. (MPP) entered into a Shareholders' Agreement, which stated that those parties held 100% of the shares in SCL Bern - It also included provisions concerning a right of first refusal and prohibition on disposal of the shares - MPP alleged that notice under the Shareholders' Agreement was given triggering the share sale provisions, but payment was not received - MPP issued a Statement of Claim out of the Federal Court naming SCL Reederei and SCL Bern as in personam defendants and the Vessel as the in rem defendant - The Statement of Claim claimed that the defendants failed to pay MPP the amount owed for its ownership in SCL Bern in accordance with the Shareholders' Agreement and sought damages of USD $3,750,000 - MPP claimed that it had an ownership interest in the Vessel by virtue of a 40% ownership stake in SCL Bern - Alternatively, that a US$5,000,000 loan to SCL Bern and SCL Reederei was secured by way of a mortgage or charge on the Vessel in favour of MPP - The Vessel was arrested - The defendants moved to strike out the Statement of Claim and set aside the warrant of arrest issued against the Vessel on the basis that the court lacked jurisdiction to hear the dispute - The Federal Court granted the motion - The heart of this matter was a shareholder's dispute and it fell outside the court's jurisdiction - MPP's claim was not one for relief made or a remedy sought under or by virtue of Canadian maritime law or any other law of Canada relating to any matter coming within the class of subject of navigation and shipping pursuant to s. 22(1) of the Federal Courts Act - While MPP framed its claim pursuant to s. 22(2)(a) of the Act as one arising out of the ownership of the Vessel, the court did not agree with that characterization - MPP's share ownership in SCG Bern did not give an ownership interest in the assets of the company - As to MPP's claim under s. 22(2)(c), the pleadings were not supported by facts confirming the existence of a mortgage on the Vessel - As the s. 22 jurisdictional threshold had not been met, the exercise of that jurisdiction in rem, pursuant to s. 43(2), did not come into play - Even if it did, it was the Shareholders' Agreement and not the Vessel which was the subject of the dispute - The action in rem had to relate to the specific property contemplated in the contract at issue - The only property contemplated by the Shareholders' Agreement was the shares in SCL Bern - See paragraphs 31 to 76.

Cases Noticed:

North Saskatchewan Riverboat Co. et al. v. 573475 Alberta Ltd. et al. (1995), 96 F.T.R. 166 (T.D.), refd to. [para. 10].

Paramount Enterprises International Inc. v. Ship An Xin Jiang et al., [2001] 2 F.C. 551; 265 N.R. 354 (F.C.A.), refd to. [para. 10].

MIL Davie Inc. v. Société d'exploitation et de développement d'Hibernia ltée (1998), 226 N.R. 369 (F.C.A.), refd to. [para. 10].

Cameron v. Ciné St-Henri Inc., [1984] 1 F.C. 421 (T.D.), refd to. [para. 10].

Quebec and Ontario Transportation Co. v. Ship Incan St. Laurent and Incan Ships Ltd., [1980] 2 S.C.R. 242; 33 N.R. 528, consd. [para. 12].

Trawlercat Marine Inc. et al. v. Folden et al. (2002), 225 F.T.R. 251 (T.D. Protho.), consd. [para. 12].

JPMorgan Chase Bank et al. v. Mystras Maritime Corp. et al. (2010), 374 F.T.R. 316; 2010 FC 1053, consd. [para. 12].

Atlantic Yacht & Ship Inc. v. Sovereign Yachts (Canada) Inc. et al. (2003), 238 F.T.R. 247; 2003 FC 965, consd. [para. 12].

Ship St. Merriel, Re, [1963] 1 Lloyd's Rep. 63, refd to. [para. 15].

Logistec Corp. v. Ship Sneland, [1979] 1 F.C. 497 (T.D.), refd to. [para. 15].

Ship Acrux, Re, [1965] 1 Lloyd's Rep. 572, refd to. [para. 15].

Dragage Verreault Inc. v. Ship Atchafalaya, [2009] F.T.R. Uned. 643; 2009 FC 273, refd to. [para. 18].

Western Stevedoring Co. v. Ship Anadolu Guney (Cargo) et al. (1988), 23 F.T.R. 117 (T.D.), refd to. [para. 18].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2011] 3 S.C.R. 45; 419 N.R. 1; 308 B.C.A.C. 1; 521 W.A.C. 1; 2011 SCC 42, refd to. [para. 18].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 18].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Visx Inc. v. Nidek Co. et al., [1998] F.C.J. No. 871 (C.A.), refd to. [para. 18].

Apotex Inc. v. Governor-in-Council et al. (2007), 370 N.R. 336; 2007 FCA 374, refd to. [para. 18].

Miida Electronics Inc. v. Mitsui O.S.K. Lines Ltd. and ITO-International Terminal Operators Ltd., [1986] 1 S.C.R. 752; 68 N.R. 241, consd. [para. 20].

Marlex Petroleum Inc. v. Ship Har Rai and Shipping Corp. of India Ltd., [1984] 2 F.C. 345; 53 N.R. 1 (C.A.), refd to. [para. 20].

Kuhr v. Ship Friedrich Busse, [1982] F.C.J. No. 54 (T.D.), refd to. [para. 20].

Balodis v. Ship Prince George, [1984] F.C.J. No. 266 (T.D.), refd to. [para. 20].

Antares Shipping Corp. v. Ship Capricorn et al., [1980] 1 S.C.R. 553; 30 N.R. 104, consd. [para. 21].

Paull v. Munday (1979), 36 L.G.R.A. 303 (S. Aust. S.C.), refd to. [para. 21].

Nowegijick v. Minister of National Revenue et al., [1983] 1 S.C.R. 29; 46 N.R. 41, refd to. [para. 21].

Kremikovtzi Trade v. Phoenix Bulk Carriers Ltd. et al., [2007] 1 S.C.R. 588; 370 N.R. 317; 2007 SCC 13, reving. (2006), 345 N.R. 61; 2006 FCA 1, refd to. [para. 23].

Shibamoto & Co. and Ocean Fisheries Ltd. v. Western Fish Producers Inc. et al. (1989), 29 F.T.R. 311 (T.D.), dist. [para. 26].

Groupe Maritime Verreault Inc. v. Alcan Métal Primaire et al. (2011), 430 N.R. 124 (F.C.A.), refd to. [para. 26].

Textainer Equipment Management B.V. v. Baltic Shipping Co. et al. (1994), 84 F.T.R. 108 (T.D.), refd to. [para. 27].

Hodgson et al. v. Ermineskin Indian Band et al. (2000), 180 F.T.R. 285 (T.D.), affd. (2000), 267 N.R. 143 (F.C.A.), leave to appeal refused (2001), 276 N.R. 193 (S.C.C.), refd to. [para. 33].

Kona Concept Inc. v. Guimond Boats Ltd. (2005), 269 F.T.R. 317; 2005 FC 214, refd to. [para. 33].

Apotex Inc. v. Syntex Pharmaceuticals International Ltd. et al., [2005] F.T.R. Uned. A81; 44 C.P.R.(4th) 23 (F.C.), refd to. [para. 33].

Isen v. Simms (2005), 334 N.R. 233; 2005 FCA 161, revd. in part (2006), 353 N.R. 147; 2006 SCC 41, refd to. [para. 48].

Canadian Pacific Ltd. and Incan Ships Ltd. v. Quebec North Shore Paper Co. and Quebec and Ontario Transportation Co., [1977] 2 S.C.R. 1054; 9 N.R. 471, consd. [para. 51].

Monk Corp. v. Island Fertilizers Ltd., [1991] 1 S.C.R. 779; 123 N.R. 1, refd to. [para. 64].

Statutes Noticed:

Federal Courts Act, R.S.C. 1985, c. F-7, sect. 22(1), sect. 22(2)(a), sect. 22(2)(c), sect. 22(3)(a), sect. 22(3)(d), sect. 43 [para. 29].

Authors and Works Noticed:

Jackson, David, Enforcement of Maritime Claims (4th Ed. 2005), paras. 2.128, 2.129 [para. 15].

Tetley, William, Maritime Liens and Claims (2nd Ed. 1998), pp. 478, 479 [para. 15].

Counsel:

Marc D. Isaacs, for the plaintiff;

Michael C. Smith and Jean-Marie Fontaine, for the defendants.

Solicitors of Record:

Isaacs & Co., Toronto, Ontario, for the plaintiff;

Borden Ladner Gervais, s.e.n.c.r.l., s.r.l., Toronto, Ontario, for the defendants.

This motion was heard on June 10, 2014, at Toronto, Ontario, before Strickland, J., of the Federal Court, who delivered the following decision on June 14, 2014.