Lorac Transport Ltd. v. Iran, (1986) 69 N.R. 183 (FCA)

• Judge: Pratte, Urie and Hugessen, JJ.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 30, 1986
• Jurisdiction: Canada (Federal)
• Citations: (1986), 69 N.R. 183 (FCA)

Lorac Transport Ltd. v. Iran (1986), 69 N.R. 183 (FCA)

MLB headnote and full text

The Owners and all those interested in the Cargo Ex the Ship "Atra", Satkab Co., Ministry of Energy Islamic Republic of Iran (defendants-appellants) v. Lorac Transport Ltd. (plaintiff-respondent)

(A-576-84)

Indexed As: Lorac Transport Ltd. v. Iran

Federal Court of Appeal

Pratte, Urie and Hugessen, JJ.

June 30, 1986.

Summary:

Iran purchased a shipment of utility poles from a Canadian supplier. The poles were loaded on the plaintiff carrier's ship, but the carrier refused to sail for Iran because of the war in the Persian Gulf. No alternate destination was agreed upon, so the poles were off-loaded. The carrier brought an action against Iran for damages in the Federal Court of Canada, Trial Division. Iran moved for dismissal on the ground that the cargo was the property of Iran and was immune from the court's jurisdiction.

The Federal Court of Canada, Trial Division, dismissed the motion. Iran appealed.

The Federal Court of Appeal dismissed the appeal. The court held that the modern restrictive doctrine of sovereign immunity was inapplicable to an ordinary commercial transaction (acta gestionis) by a state.

International Law - Topic 2200

Sovereignty - Immunity - General - The Federal Court of Appeal held that absolute sovereign immunity no longer prevailed and that the modern restrictive doctrine of sovereign immunity applied only where the subject matter of a suit is truly of a public law nature as an integral part of the exercise of sovereign governmental functions (acta imperii) - Transactions of a commercial or trading nature (acta gestionis) were not protected by sovereign immunity - See paragraphs 10 to 19.

International Law - Topic 2202

Sovereignty - Acta gestionis - Iran purchased a shipment of utility poles from a Canadian supplier - The Federal Court of Appeal held that the transaction was of an ordinary commercial or trading nature (acta gestionis) and was not protected by Iran's sovereign immunity - See paragraphs 20 to 21.

Cases Noticed:

Compania Naviera Vascongado v. Steamship "Cristina", [1938] A.C. 485, consd. [para. 11].

Dessaulles v. Republic of Poland, [1944] S.C.R. 275, consd. [para. 12].

Philippine Admiral v. Wallem Shipping (Hong Kong) Ltd., [1977] A.C. 373, appld. [para. 13].

Trendtex Trading Corporation v. Central Bank of Nigeria, [1977] 1 Q.B. 529, appld. [para. 13].

I Congreso Del Partido, [1981] 2 All E.R. 1064, appld. [para. 13].

Flota Maritima Browning de Cuba S.A. v. Republic of Cuba, [1962] S.C.R. 598, consd. [para. 14].

La Republique Democratique du Congo v. Venne, [1971] S.C.R. 997, consd. [para. 14].

Zodiak International Products Inc. v. Polish People's Republic, 81 D.L.R. (3d) 656, appld. [para. 18].

Claim against the Empire of Iran, 45 I.L.R. 57, appld. [para. 20].

Statutes Noticed:

State Immunity Act, S.C. 1980-81-82-83, c. 95, sect. 7(2) [para. 23].

Authors and Works Noticed:

Driedger, Construction of Statutes (2nd Ed. 1983), pp. 185-203 [para. 24].

Counsel:

Robert Jette and Frederick A. Welsford, for the appellant;

Gerald M. Lawson and Christopher M. Correia, for the respondent.

Solicitors of Record:

Clark, Drummie & Company, Saint John, N.B., for the appellant;

Lawson & Lawson, Saint John, N.B., for the respondent.

This case was heard on June 4, 1986, at Fredericton, N.B., before Pratte, Urie and Hugessen, JJ., of the Federal Court of Appeal.

On June 30, 1986, Hugessen, J., delivered the following judgment for the Federal Court of Appeal.