The Canadian Conqueror,

CourtSupreme Court (Canada)
Date11 June 1962
Canada, Nova Scotia Admiralty District of the Exchequer Court.
Exchequer Court.
Supreme Court of Canada.

(Pottier D.J.A.)

(Cameron J.)

Flota Maritima Browning de Cuba S.A.
and
The Steamship Canadian Conqueror et Al. and the Republic of Cuba.

Jurisdiction Territorial Exemptions from Public ships and other property of foreign States Whether Cuban ships lying in Canadian port subject to proceedings in rem The law of Canada.

The Facts.This was a motion made by the Republic of Cuba to set aside the writ and warrant of arrest in an action against seven ships lying in the Port of Halifax (Nova Scotia), on the ground that these ships were public national property and the Court was therefore without jurisdiction to entertain such an action. Flota Maritima Browning de Cuba, a Cuban corporation belonging to citizens of the United States, had signed in 1958 a lease-purchase agreement with Banco Cubano del Commercio, another Cuban corporation, relating to the operation of a number of vessels. Eight of these vessels had not been in use for some time and were lying in the Port of Halifax, but they were equipped for passenger and freight service. Some months later Flota, claiming that the Cuban bank had usurped its rights under the contract, declared it a nullity and surrendered possession of the ships to an agent of the bank but reserved the right to claim damages for breach of contract. On 9 June 1959 the bank sold the ships to the Cuban Government. On 4 August 1960 Flota instituted proceedings in rem in the Nova Scotia Admiralty District of the Exchequer Court and was granted a warrant for the arrest of seven vessels which were still in Halifax. While the Republic of Cuba was not named as a defendant, the writ was directed to the owners and all others interested in the defendant vessels. Counsel for the Republic of Cuba entered an appearance under protest on the ground that the Court had no jurisdiction and moved to set aside the writ and the warrant on the grounds that the vessels were public national property of the Republic, which could not be impleaded, and that the plaintiff (Flota) had, in the lease-purchase agreement, expressly submitted itself and all questions relating to the said agreement to the jurisdiction of the competent courts of the Republic of Cuba.

Held (by the Nova Scotia Admiralty District of the Exchequer Court): that the application must be dismissed. The classical rule of the complete immunity of foreign States from the jurisdiction of the local courts in respect of their ships must now be taken to have been modified by the newer or restrictive theory of sovereign immunity based on the distinction between public acts of the State (jure imperii) and private or trading acts (jure gestionis). Having regard to the development of the law on the subject in other nations, it must be held that in Canada a ship engaged in commerce while owned by a foreign Government and in its possession and control was not immune from the jurisdiction of Canadian courts. The ships at bar were equipped for passenger and freight service and immunity must be denied because these were non-governmental functions. The fact that the lease-purchase agreement provided for the submission of all questions thereunder to the jurisdiction of a foreign court did not ipso facto oust the jurisdiction of the local court, although that court might decline jurisdiction if it found that the agreements were not unreasonable in the particular setting:

The Court stated the facts and said (in part):

I think it can be concluded that the original rule of complete immunity from judicial jurisdiction over a foreign Government has been modified by the distinction between foreign sovereigns acting in their sovereign capacity (jure imperii) from acts of a business type (jure gestionis). It is reported that the Restrictive Theory of Sovereign Immunity now exists in the United States, in Belgium, Italy, Egypt, Switzerland, France, Austria, Greece, Rumania, Peru, The Netherlands, and possibly Denmark. Some of the countries following the Absolute Theory of Sovereign Immunity, such as Brazil, Chile, Estonia, Germany, Hungary, Norway, Sweden are parties to the Brussels Convention[1] and thus have relinquished complete immunity.

There can hardly be any doubt that [with regard to] a vessel in the United States and in many other parts of the world, Sovereign Immunity cannot be claimed when said vessel is engaged in commerce, that is, matters jure gestionis. There is no case in England that I have been able to find that definitely settles the law one way or the other. The Frank Dale1 case in Canada does say that foreign vessels engaged in commerce can claim immunity. The difficulty, however, with this case is that it purports to find in an English case something, I respectfully submit, that is not there.

I read the CristinaELR2 case as showing great doubts for the exemption of foreign ships engaged in commerce and in some parts of it, I think it is casting shadows in opposition to that principle. I believe that if a case was tried in England today, in view of the Cristina case and the development of the law in other nations, it would be held that foreign ships engaged in commerce cannot claim immunity.

I do not think the Frank Dale1 case is binding upon me in view of my belief in what is really the law today.

It is stated in the case before me that the ships are not engaged in commerce. As a matter of fact, it is shown...

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