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An order staying an action based on forum non conveniens can be lifted if subsequent developments
warrant. Such an order is not final like
an order dismissing the action. Where
the governing law is a key factor on the motion for a stay, a plaintiff should
have that issue fully adjudicated as part of the motion, rather than let the
court rely on the position taken by the defendant, which may change after the motion,
as it suits the defendant.
In Kaynes v. B.P. 2016 ONCA 601, a group of Canadian shareholders of British
Petroleum (“B.P.”) sued B.P. in Ontario, alleging B.P. had misled them about its
operational safety programs in its public disclosure prior to the Deep Horizons
oil spill in the Gulf of Mexico in 2010, and about clean up activities
afterward. These shareholders had
bought their shares on the New York Stock Exchange. B.P.
moved for, and obtained on appeal, an order staying the action on the
grounds that Ontario was forum non conveniens. (The Ontario court found it did have
jurisdiction). The court’s grounds for
the stay were the facts that there was another class action seeking similar
relief in the U.S., and that a U.S. statute asserted exclusive jurisdiction
over claims such as those brought by the plaintiff.
Kaynes then brought a class
action in the U.S. based on the Ontario
Securities Act. Later, the U.S. court dismissed Kaynes’ class action, partly because it could not be
included in a U.S. class action because it was based on Ontario law. (Kaynes
was not barred from bringing an individual action in the U.S.) Kaynes
then moved to have the stay of the Ontario proceedings lifted. In deciding whether the plaintiff had
sufficient grounds, the Ontario Court of Appeal considered not just the fact
that his U.S. class action proceeding had been dismissed. The Court also gave weight to the fact that
B.P. now accepted that the plaintiff’s claim is governed by Ontario law, namely
the Ontario Securities Act. If Kaynes’ claim was governed by U.S.
law (as B.P. had previously asserted) then under U.S. law the U.S. court would
have exclusive jurisdiction over the claim.
There are two comment-worthy
features of this ruling. One is that we
now have an appellate ruling from Ontario confirming that a stay granted on
grounds of forum non conveniens is not necessarily
permanent and the court has inherent jurisdiction to lift the stay “where circumstances later develop that make it unjust to continue
the stay” (para. 11).
The other feature
relates to the fact that the ruling turned in part on the question of whether
Kaynes’ claim would be governed by U.S. law in the U.S. proceeding. The
law to be applied is certainly one of the factors in a forum non conveniens analysis.
This factor carried extra importance here because the U.S. court would
have, under American law, exclusive jurisdiction over the claim if it was
governed by U.S. law. However, when granting
the stay, the court accepted as fact U.S. law applied without analysis and
without any court having ruled on this issue.
Kaynes maintained throughout that
Ontario law governed. B.P. said, at the
time of its motion to stay the Ontario proceeding, that U.S. law governs, and
subsequently obtained the stay of proceedings.
Later, B.P. flip-flopped, which led to Kaynes’ claim (as a class action)
being dismissed in the U.S. A court
hearing a forum non conveniens motion
needs to carefully determine the applicable law.
