Corporate Social Responsibility and forum non conveniens: Garcia v Tahoe Resources Inc

Canadian mining companies have been scrutinized for quite some time regarding some misbehaviour that has taken place in foreign countries. The most recent of these was the subject matter in Garcia v Tahoe Resources Inc, 2017 BCCA 39 [Garcia], which started in April of 2013. The story begins with a private security personnel, who was employed by a Canadian-owned mine in Guatemala and was said to be shot and injured by Garcia, along with six other protesters outside the Escobal mine.

Tahoe Resources, through its wholly owned subsidiaries, owns the mine. The plaintiffs in this case are the seven that were injured in Guatemala. They brought an action for damages against Tahoe Resources in British Columbia, which is where the company is incorporated.

Tahoe Resources conceded that the Supreme Court of British Columbia did, indeed, have jurisdiction over the claim, but they applied for an order to decline jurisdiction using the court’s discretion under the doctrine of forum non conveniens; they believed that Guatemala was the better forum for the plaintiffs to adjudicate their claim. The trial judge granted the order, mainly because it was believed that the plaintiffs could have a fair trial in Guatemala. On appeal, however, the plaintiffs argued that the judge erred in law in imposing the burden of proving that justice could not be obtained if the trial took place in Guatemala; instead, the plaintiffs believed that the correct test is if the evidence discloses a real risk of unfair trial process in the foreign court.

The following passage accurately summarizes the results at the appellant level, where Madam Justice Garson reversed the lower court’s decision:

In the analysis that follows, I consider, in light of new evidence, whether the Guatemalan criminal proceeding – in which the appellants have a derivative civil claim – is a more appropriate forum for the dispute. I conclude that it is not. Turning to the potential stand-alone civil suit in Guatemala, I discuss three factors: (1) the limitation period for bringing civil suits in Guatemala; (2) the Guatemalan discovery procedures for civil suits; and (3) the risk of unfairness in the Guatemalan justice system [Garcia, para 48].

I conclude that those three factors all weigh against finding that Guatemala is clearly the more appropriate forum for the action [Garcia, para 49].

The legal test regarding the risk of unfairness in a foreign judicial system is interesting. The proper application of forum non conveniens comes from Black v Breeden, 2012 SCC 19 [Black], in which it was noted that “[t]he forum non conveniens analysis does not require that all the factors point to a single forum or involve a simple numerical tallying up of the relevant factors. However, it does require that one forum ultimately emerge as clearly more appropriate” [Black, para 37].

Madam Justice Garson noted that the trial judge applied the incorrect test of whether the foreign court was “capable of providing the justice.” Instead, the correct test is whether there is a real risk of an unfair process in the Guatemalan court. Various factors were considered in determining whether this was the case. In particular, Justice Garson noted the following:

In my view, the judge erred in considering the issue of corruption and injustice in the Guatemalan judiciary as a secondary stage in the analysis with the burden on the appellants to rebut her prima facie determination that Guatemala was the more appropriate forum. In addition, the judge erred in defining the question as whether Guatemalan courts were “capable” of providing justice [Garcia, para 123].

What is surprising is that “[t]here is no binding authority on this Court concerning the correct question to ask when considering evidence of corruption and injustice in a defendant’s proposed alternate forum” [Garcia, para 124]. The judge went on to establish what that test should be: “Where a plaintiff presents evidence of corruption and injustice in the defendant’s proposed alternate forum, the court must ask whether the evidence shows a real risk that the alternate forum will not provide justice” [Garcia, para 124].

This is an interesting piece in our history of international law jurisprudence. Madam Justice Garson notes that the trial judge placed inadequate weight on the risk that the plaintiffs would not receive a fair trial in Guatemala. This consideration means that the risk of an unfair trial in another country has to be analyzed in detail within a forum non conveniens analysis.

She goes on to note that “[i]n reaching this conclusion, I make no general pronouncement on Guatemala’s legal system” [Garcia, para 124]. This statement brings to light some of the problems within international law and of determining jurisdiction. The concept of forum non conveniens practically begs judges to analyze—and most importantly, scrutinize—another country’s legal system to determine its adequacy to hear a trial fairly.

A Call for International Legal Reform

Is this fair? Should Canadian courts be allowed to decide if another country’s judicial system is up to par? Should the reverse also be true?

A more just avenue might be to consider establishing an international body that deals with determining the correct jurisdiction to hear a trial, or, alternatively, to get the international body to hear the trial itself. This avenue would give a neutral third party the opportunity to assess both jurisdictions as potential places to hear a trial, or the opportunity to have a trial heard by neither of the jurisdictions that are involved in the case. Having one jurisdiction decide whether another one is sufficient and whether it would provide for a just forum to adjudicate very serious accusations cannot be done without a built-in bias.

An alternative solution needs to be considered. The fact that there is no binding authority on what questions to ask when considering evidence of corruption and injustice in another jurisdiction means that this area of the law has yet to develop. This leaves courts at a standstill because there is no guidance on which for them to rely. A lack of guidance in an area of law that can have rippling effects to, not just lives half way around the world, but also relationships between countries for years to come, means that a separate international body might need to get involved. This body would be responsible for determining rules and guidelines in determining which forum is best between two jurisdictions, and for injecting a neutral perspective into the situation.

Cases such as Garcia bring to surface the need for more direction within the international law sphere. Whether it comes from well-established international bodies or through a few countries coming together to create a working group in determining the best approach, the need for change is imminent. This alternative would allow for the development of international law more adequately and with a greater chance of achieving justice for all as a result.