Nevsun Resources Ltd. v. Araya

Supreme Court of Canada decision upholding lower courts’ dismissal of Nevsun Resources Ltd.’s motion to strike a claim by mine workers in Eritrea for damages for violations of customary international law by a Canadian corporation on the grounds that the ‘act of state’ doctrine prevents a domestic court from adjudicating on extra-territorial human rights obligations and that customary international law does not apply to private actors. The Court held that the ‘act of state’ doctrine does not apply as an all-encompassing doctrine in Canada and that international law has evolved so as not to preclude the possibility of direct liability of private corporations for violations of obligatory, definable, and universal norms. Even if the international human rights norms at issue are of a strictly inter-state character, courts must consider whether the common law should evolve so as to extend the scope of those norms to bind corporations.

Date of the Ruling: 
Feb 28 2020
Supreme Court
Type of Forum: 

Nevsun Resources Ltd. (Nevsun), a corporation incorporated in British Columbia that owns 60% of the Bisha Mining Share Company, appealed from the Court of Appeal’s agreement with the Chambers Judge to dismiss Nevsun’s motion to strike the pleadings. Nevsun was sued in a class action made up of more than 1,000 individuals who claimed they were forced to work at the Bisha Mining Share Company’s mine between 2008 and 2012. Through their military conscriptions, the Eritrean workers said they were forced, by severe punishment against themselves or their families for disobedience, into harsh and dangerous labor conditions in the Bisha mine. When not working, the workers were not allowed to leave without authorization.

The Eritrean workers sought damages for “breaches of domestic torts including conversion, battery, ‘unlawful confinement’ (false imprisonment), conspiracy and negligence… [as well as] breaches of customary international law prohibitions against forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity.” Nevsun moved to strike the claim as disclosing no reasonable cause of action, arguing that the ‘act of state’ doctrine, the lack of a prospect of success for claims based on customary international law, and the fact that international law does not bind private corporations made Araya’s claim non-justiciable in Canadian courts. The Chambers judge and the British Columbia Court of Appeal dismissed the motion to strike, and Nevsun was granted leave to appeal to the Supreme Court of Canada. In their decision, the Supreme Court ruled on whether or not the act of state doctrine is a part of Canadian common law, and whether breaches of customary international law by a private corporation can form the basis of a civil claim in British Columbia.

The Court first addressed the act of state doctrine, which prevents a court from adjudicating on the lawfulness of sovereign acts in a foreign state. The Court held that this doctrine is not a part of Canadian common law. The principles underlying the doctrine, conflict of laws and judicial restraint, are encompassed in Canadian jurisprudence elsewhere and not in an all-encompassing doctrine. Canadian courts will not make findings attempting to legally bind foreign states, but courts are free to look into foreign legal matters when is it necessary or incidental to resolve domestic legal matters properly before the court.

The Court next discussed the role of customary international law in Canada. The plaintiffs claimed that customary international law is part of Canadian common law, and therefore a breach of customary international law is actionable at common law. The Court held that it is not “plain and obvious” that the claim would not succeed. Customary international law is automatically incorporated into Canada’s domestic law through the doctrine of adoption unless there is conflicting legislation. The Court stated that the automatic incorporation is justified because, quoting Hape, “‘international custom, as the law of nations, is also the law of Canada.’”

The Court also stated that it is not “plain and obvious” that Nevsun is immune to customary international law because they are a corporation. As some norms of customary international law are solely interstate, and not applicable to corporations and private actors, the Court noted that the trial judge will need to determine which norms in this case are interstate, and whether the common law should evolve to extend these norms to bind corporations. However, the Court held that it is enough to conclude that the breaches in question, many of which are considered to be jus cogens or peremptory law, may apply to Nevsun.

Finally, the Court addressed whether the domestic common law can develop appropriate remedies for breaches of customary international law. It ruled that it is not “plain and obvious” that a civil remedy for corporate violations of customary international law cannot be developed. Additionally, while Nevsun argued that the harms claimed are covered by existing domestic torts, the Court held that the customary international law norms in question are inherently different from existing domestic torts and may require different remedies. The trial judge could therefore consider recognition of new torts or remedy breaches based on customary international law.

Enforcement of the Decision and Outcomes: 

Nevsun’s appeal was dismissed, and the case is ongoing.

Groups involved in the case: 
Significance of the Case: 

This represents a significant advance in Canadian jurisprudence that will be helpful in other countries in which courts have been reluctant to provide remedies to violations of international law that has not been directly incorporated.  The Supreme Court affirms in its decision that international human rights are “not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities.” This statement should be helpful in combatting arguments that social and economic rights can be treated by courts as mere aspirations rather than enforceable rights. The decision eloquently affirms the obligations of domestic courts to become active participants in the evolution of international human rights norms in response to current challenges related to transnational corporations and extra-territorial obligations. While the merits of the claim have yet to be determined, this decision sends a message to Canadian corporations that they can potentially be held liable for violating international customary law regardless of where the violations take place.

For their contributions, special thanks to ESCR-Net members: the Program on Human Rights and the Global Economy (PHRGE) at Northeastern University and the Social Rights Advocacy Centre.