Kuwait Airways Corp. v. Iraq (Republic) et al., (2010) 407 N.R. 145 (SCC)

JudgeMcLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.
CourtSupreme Court (Canada)
Case DateMarch 22, 2010
JurisdictionCanada (Federal)
Citations(2010), 407 N.R. 145 (SCC);2010 SCC 40;325 DLR (4th) 236;[2010] EXP 3404;407 NR 145;[2010] 2 SCR 571;[2010] SCJ No 40 (QL)

Kuwait Airways Corp. v. Iraq (2010), 407 N.R. 145 (SCC)

MLB headnote and full text

[French language version follows English language version]

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

.........................

Temp. Cite: [2010] N.R. TBEd. OC.028

Kuwait Airways Corporation (appellant) v. Republic of Iraq and Bombardier Aerospace (respondents)

(33145; 2010 SCC 40; 2010 CSC 40)

Indexed As: Kuwait Airways Corp. v. Iraq (Republic) et al.

Supreme Court of Canada

McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ.

October 21, 2010.

Summary:

Kuwait Airways Corp. (KAC) sued the Iraqi national airline, Iraqi Airways Co. (IAC), in the United Kingdom Courts for damages for aircraft and equipment seized by IAC during the 1990-1991 Gulf War and not returned. The action was allowed. The United Kingdom courts ordered IAC to pay KAC over C$1 billion in damages. KAC then added the Republic of Iraq (Iraq) as a second defendant and sought costs of C$84 million against it. Steel, J., of the United Kingdom High Court of Justice, Queen's Bench Division, Commercial Court, in a decision reported [2008] EWHC 2039 (BAILII) (T.C.C.), allowed the application. Steel, J., found that Iraq had controlled, funded and supervised IAC's defence and that its acts fell under the commercial exception to the principle of state immunity under the State Immunity Act 1978 (U.K.). KAC then applied in the Quebec Superior Court for the recognition of Steel, J.'s decision. Iraq moved to dismiss KAC's application.

The Quebec Superior Court, in a decision reported [2008] R.J.Q. 2421; 2008 QCCS 4560, allowed Iraq's motion. KAC appealed.

The Quebec Court of Appeal, in a decision reported [2009] R.J.Q. 992; 2009 QCCA 728, dismissed the appeal. KAC appealed.

The Supreme Court of Canada allowed the appeal.

International Law - Topic 2200

Sovereignty - Incidents of - Immunity - General - The Supreme Court of Canada discussed the principle of state immunity and its exceptions under the State Immunity Act (Can.) - See paragraphs 13 to 18.

International Law - Topic 2202

Sovereignty - Incidents of - Immunity - Exceptions - Proceedings relating to commercial activity of foreign state - Acta gestionis - Kuwait Airways Corp. (KAC) sued the Iraqi national airline, Iraqi Airways Co. (IAC), in the United Kingdom Courts for damages for aircraft and equipment seized by IAC during the 1990-1991 Gulf War and not returned - The Republic of Iraq (Iraq) controlled, funded and supervised IAC's defence in the action - The action was allowed - KAC sought costs of C$84 million against Iraq - In 2008, Steel, J., of the United Kingdom High Court of Justice, Queen's Bench Division, Commercial Court, allowed the application - Steel, J., found that the proceedings had been marked by perjury and by tactics on the part of IAC and Iraq that were intended to deceive the British courts - He held that Iraq's acts in controlling IAC's defence were not sovereign acts, but instead fell within the commercial exception to state immunity under the State Immunity Act 1978 (U.K.) - KAC then applied in the Quebec Superior Court for the recognition of Steel, J.'s decision - Iraq moved to dismiss KAC's application - The Supreme Court of Canada, on appeal, dismissed Iraq's motion - After discussion of the commercial activity exception to state immunity and its applicability, the court ruled that Iraq could not rely on state immunity under the Canadian State Immunity Act - The nature of Iraq's acts in the United Kingdom litigation fell under the commercial exception to state immunity - The United Kingdom litigation concerned the retention of the aircraft seized - There was no connection between that commercial litigation and the initial sovereign act of seizing the aircraft - See paragraphs 24 to 35.

International Law - Topic 2209

Sovereignty - Incidents of - Immunity - When applicable - The Supreme Court of Canada held that an application for the recognition of a foreign judgment was a "proceeding" to which the state immunity provided for in s. 3 of the State Immunity Act (Can.) applied - See paragraphs 13 to 21.

International Law - Topic 2211

Sovereignty - Incidents of - Immunity - Application of legislation - The Supreme Court of Canada held that the State Immunity Act (Can.) applied to an application for the recognition of a foreign judgment - See paragraphs 11, 12, and 19 to 21.

International Law - Topic 2216

Sovereignty - Incidents of - Immunity - Practice - The Supreme Court of Canada held that, under the State Immunity Act (Can.), state immunity was presumed and, as a result, the burden of proof of establishing an exception to the state immunity rule fell on the one who invoked the exception - See paragraph 22.

Quebec Civil Law - Topic 9323

Conflict of laws - Procedure - Recognition and enforcement of foreign decisions - [See Quebec Civil Law - Topic 9418 ].

Quebec Civil Law - Topic 9418

Reform of the Civil Code - General - Pending proceedings - Proof and procedure - Article 170 of the Act respecting the implementation of the Civil Code (Que.) provided that the provisions of the new Code concerning the recognition and enforcement of foreign decisions did not apply to decisions already rendered when the new legislation came into force, or to proceedings pending at that time before foreign authorities - The applicant sought the recognition, in Quebec Superior Court, of a foreign judgment rendered in 2008 in respect of actions commenced after the coming into force of the Civil Code of Québec in 1994 - The Supreme Court of Canada held that arts. 3076 to 3168 of the Civil Code of Québec governed the application for recognition - See paragraphs 9 and 10.

Cases Noticed:

Reference Re Canada Labour Code and State Immunity Act (Can.), [1992] 2 S.C.R. 50; 137 N.R. 81, refd to. [para. 13].

Schreiber v. Canada (Attorney General), [2002] 3 S.C.R. 269; 292 N.R. 250; 164 O.A.C. 354; 2002 SCC 62, refd to. [para. 13].

Beals v. Saldanha et al., [2003] 3 S.C.R. 416; 314 N.R. 209; 182 O.A.C. 201; 2003 SCC 72, refd to. [para. 20].

Pro Swing Inc. v. Elta Golf Inc., [2006] 2 S.C.R. 612; 354 N.R. 201; 218 O.A.C. 339; 2006 SCC 52, refd to. [para. 20].

Canada Post Corp. v. Lépine, [2009] 1 S.C.R. 549; 387 N.R. 91; 2009 SCC 16, refd to. [para. 23].

Ship I Congreso del Partido, Re, [1983] 1 A.C. 244 (H.L.), refd to. [para. 29].

Kuwait Airways Corp. v. Iraqi Airways Co. et al., [1995] 3 All E.R. 694; 187 N.R. 192 (H.L.), refd to. [para. 29].

Saudi Arabia v. Nelson (1993), 507 U.S. 349 (Sup. Ct.), consd. [para. 29].

Statutes Noticed:

Civil Code of Québec, S.Q. 1991, c. 64, art. 3076 [para. 12]; art. 3155, art. 3158 [para. 20].

Implementation of the Civil Code, Act respecting the, S.Q. 1992, c. 57, art. 170 [para. 9].

State Immunity Act, R.S.C. 1985, c. S-18, sect. 2 [para. 17]; sect. 3 [para. 15]; sect. 5 [para. 17].

Authors and Works Noticed:

Arbour, J.-Maurice, and Parent, Geneviève, Droit international public (5th Ed. 2006), p. 332 [para. 13].

Castel, Jean-Gabriel, and Walker, Janet, Canadian Conflict of Laws (6th Ed. 2005) (2010 Looseleaf Update, Release 19), vol. 1, p. 10-15 [para. 22].

Emanuelli, Claude, Droit international privé québécois (2nd Ed. 2006), pp. 128, 154, 155 [para. 20].

Emanuelli, Claude, Droit international public: Contribution à l'étude du droit international selon une perspective canadienne (2nd Ed. 2004), pp. 288 [para. 13]; 334, 335 [paras. 13, 14].

Goldstein, Gérald, and Groffier, Ethel, Droit international privé, Théorie générale (1998), vol. 1, p. 378 [para. 20].

Larocque, François, La Loi sur l'immunité des États canadienne et la torture (2010), 55 McGill L.J. 81, generally [para. 24].

Counsel:

Yves Martineau, Patrick Girard, Laurent G. Fortier and Joseph Reynaud, for the appellant;

Marie-Josée Hogue, Patrick Ferland and Serge Gaudet, for the respondent, the Republic of Iraq;

No one appeared for the respondent, Bombardier Aerospace.

Solicitors of Record :

Stikeman Elliott, Montreal, Quebec, for the appellant;

Heenan Blaikie, Montreal, Quebec, for the respondent, the Republic of Iraq.

This appeal was heard on March 22, 2010, by McLachlin, C.J.C., Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. The following decision of the Supreme Court was delivered in both official languages by LeBel, J., on October 21, 2010.

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42 practice notes
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    • Canada (Federal) Supreme Court (Canada)
    • 18 Marzo 2014
    ...and State Immunity Act (Can.), [1992] 2 S.C.R. 50; 137 N.R. 81, refd to. [para. 39]. Kuwait Airways Corp. v. Iraq (Republic) et al., [2010] 2 S.C.R. 571; 407 N.R. 145; 2010 SCC 40, refd to. [para. Bouzari et al. v. Islamic Republic of Iran (2004), 220 O.A.C. 1; 71 O.R.(3d) 675 (C.A.), refd ......
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    ...States of America), Merits, Judgment, I.C.J. Reports 1986, p. 14; Re Canada Labour Code, [1992] 2 S.C.R. 50; Kuwait Airways Corp. v. Iraq, 2010 SCC 40, [2010] 2 S.C.R. 571; Bouzari v. Islamic Republic of Iran (2004), 71 O.R. (3d) 675; Suresh v. Canada (Minister of Citizenship and Immigratio......
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    ...SCC 54 ..................................................................................................179 Kuwait Airways Corp v Iraq, 2010 SCC 40, [2010] 2 SCR 571 .................................................................... 533–35 907 908 INTERNATIONAL LAW: DOCTRINE, PRACTICE, A......
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    ...265 Koubi v Mazda Canada Inc, 2012 BCCA 310 ......................................................321 Kuwait Airways Corp v Iraq, 2010 SCC 40 .........................................................314 Labour Relations Board of Saskatchewan v The Queen (1955), [1956] SCR 82, [1955] 5 DLR 6......
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28 cases
  • Kazemi Estate v. Islamic Republic of Iran, (2014) 463 N.R. 1 (SCC)
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    • 18 Marzo 2014
    ...and State Immunity Act (Can.), [1992] 2 S.C.R. 50; 137 N.R. 81, refd to. [para. 39]. Kuwait Airways Corp. v. Iraq (Republic) et al., [2010] 2 S.C.R. 571; 407 N.R. 145; 2010 SCC 40, refd to. [para. Bouzari et al. v. Islamic Republic of Iran (2004), 220 O.A.C. 1; 71 O.R.(3d) 675 (C.A.), refd ......
  • Kazemi Estate v. Islamic Republic of Iran, [2014] 3 SCR 176
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    • 10 Octubre 2014
    ...States of America), Merits, Judgment, I.C.J. Reports 1986, p. 14; Re Canada Labour Code, [1992] 2 S.C.R. 50; Kuwait Airways Corp. v. Iraq, 2010 SCC 40, [2010] 2 S.C.R. 571; Bouzari v. Islamic Republic of Iran (2004), 71 O.R. (3d) 675; Suresh v. Canada (Minister of Citizenship and Immigratio......
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    ...Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), I.C.J. (February 3, 2012); Kuwait Airways Corp. v. Iraq, 2010 SCC 40, [2010] 2 S.C.R. 571 ; Contino v. Leonelli-Contino, 2005 SCC 63 , [2005] 3 S.C.R. 217 ; Glykis v. Hydro-Québec, 2004 SCC 60 , [2004] ......
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    ...Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), I.C.J. (February 3, 2012); Kuwait Airways Corp. v. Iraq, 2010 SCC 40, [2010] 2 S.C.R. 571; Contino v. Leonelli‑Contino, 2005 SCC 63, [2005] 3 S.C.R. 217; Glykis v. Hydro‑Québec, 2004 SCC 60, [2004] 3 S.C.R. 285; ......
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4 firm's commentaries
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    • 25 Febrero 2013
    ...the appellants' argument that the motion judge failed to apply the decision of the Supreme Court in Kuwait Airways Corp. v. Iraq, 2010 SCC 40, [2010] 2 S.C.R. 571, which they claim suggested a common law exception to state immunity for acts of terrorism, kidnapping, torture and hostage-taki......
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    ...[1999] OJ No 3068 (SCJ) ............................................................................... 22 Kuwait Airways Corp v Iraq, 2010 SCC 40 ........................................................ 189 Lalli v Chawla (1997), 203 AR 27, 53 Alta LR (3d) 121, [1997] AJ No 457 (QB) ............
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