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Commentary: Canadian companies are increasingly at risk from lawsuits over human rights abuses of foreign subsidiaries
Author: Miles F. Pittman & Rick Williams, Borden Ladner Gervais LLP, on Mondaq, Published on: 30 March 2017
"Canada: Canadian Companies And The Effects Of Foreign Operations – Out Of Sight, Front Of Mind", 27 Mar 2017
Foreign litigants are increasingly using the Canadian court system to attempt to recover damages from Canadian parents or affiliates in cases where the claim arose from foreign operations entirely conducted by a foreign affiliate or subsidiary...[In] Garcia v Tahoe Resources...[t]he BC Court of Appeal...held that the correct [forum conveniens] test is whether...evidence discloses a real risk of an unfair trial process in the foreign court...The plaintiffs' claims...are novel because they focus on the Canadian parent's public statements regarding its commitment to corporate social responsibility, thus avoiding the corporate veil issue...the fact that the action is proceeding on the merits gives significant leverage to the Guatemalan plaintiffs to negotiate a settlement...[I]n Yaiguaje v. Chevron...the plaintiffs chose Canada [due to] its relatively low threshold for enforcement of foreign judgments]...[T]he test is that the subject-matter of the action must have a "real and substantial connection" to the jurisdiction where the action was brought; once that is shown, there are limited defences to the enforcement of the action...