In this issue:
1. Firm and Industry News
2. Five Recent Decisions of Interest
a) Defence of Inevitable Accident
b) License of Vessel is Clear Evidence of
c) Application for Arbitration Denied -
d) Airline Subject to $100 Damages for Delay
e) IATA Agent was a Trustee for Air India
3. Canadian Court Upholds Montreal Convention
4. The Chilling Future of Shipbuilding in Canada
1. Firm and Industry News
- December 2nd, Montreal: Grunt Club Annual
- December 3-7, Hawaii: Joint Meeting U.S.
Maritime Law Association, Canadian Maritime Law Association, Maritime
Law Association of Australia and New Zealand
- January 13th, 2012, Toronto: Fernandes Hearn
LLP Annual Maritime and Transportation Conference
- January 14-15, 2012, New Orleans: Conference
of Freight Counsel
- January 20th, 2012, Chicago: Transportation
Lawyers Association Chicago Regional Seminar
- January 20th, 2012, Toronto: Marine Club
- February 8-9, 2012, Miami: Trucking Industry
Defence Association Advanced Seminar
- April 19 - 22, 2012, Athens: Institute of
Air & Space Law Conference on Aviation Law and Insurance
- May 23 & 24, 2012, Banff Springs: Semi-Annual Meeting Canadian Board of Marine Underwriters
Rui Fernandes and Martin Abadi will
be in the Federal Court of Appeal on December 13th, 2011 responding
to the appeal and pursuing the cross appeal of the decision
of Justice Heneghan in Buhlman v. Buckley, 2011 FC 73.
[The decision is reported in our July 2011 newsletter]
Gordon Hearn and Christopher Afonso were recently successful in resisting a motion for summary judgment
brought by an opponent in an Ontario Superior Court proceeding.
The dispute concerns issues arising from a cross-border logistics
and distribution arrangement. Ruling that there were "numerous
genuine issues requiring a trial" the matter will now proceed
James Lea recently appeared on a motion
for summary judgment in the Ontario Superior Court on behalf
of an insurer of a fleet of trucks. At issue was the interesting
question - cited as "novel" by the Court - as to whether
insurers can effectively remove specific drivers from coverage
by notice to the placing broker or whether notice is required
to be provided to the insured fleet operator. The Court ruled
that a trial was necessary to resolve the issue.
2. FIVE RECENT
DECISIONS OF INTEREST
A) Defence of Inevitable Accident
Wolverine Motor Works Shipyard LLC v. Canadian
Naval Memorial Trust  N.S.S.C. 308 (CanLII).
The de-commissioned war-time Corvette "Sackville"
was moored to its berth next to the Maritime Museum of the Atlantic.
The "Sackville" had no power (i.e., it was a "dead
ship"). The sailing / motor vessel "Larinda" was
tied up next to the "Sackville." At the height of Hurricane
Juan, the "Sackville's" lines either parted or paid out
allowing it to strike the "Larinda", holing it and causing
it to sink. After being raised, the "Larinda" was sold
for salvage. The owners of the "Larinda" sued for its
almost total loss. The question for the court was whether the Trust
took all reasonable measures in the circumstances to secure the
"Sackville" in anticipation of the hurricane. The court
held that the claimant failed to prove that the mooring arrangement
used to secure the "Sackville" was inadequate. The defendant
took all reasonable and necessary precautions in the face of the
pending hurricane and hence was not negligent.
Interestingly, the Trust had rested its defence on
the doctrine of "inevitable accident." The Trust's position
was that it was aware of the approach of Juan and did everything
it could to secure the "Sackville" but her moorings broke
nevertheless at the height of the storm.
The court never did directly state that the defence
of inevitable accident applied. It did so implicitly by concluding:
"It is clear that the defendant, as the institution
in charge of Sackville, owed the plaintiff a duty of care when
the two vessels were moored alongside one another (and vice
versa). I am not convinced that the Trust personnel failed
to meet their duty of care, however. I find the statement of the
law from the Star of the Isles to be helpful
In order to establish the defence of "inevitable accident,"
the defendant must show that there is "no evidence against
him of want of diligence or want of skill and positive evidence
in his favour to show that he has exercised both diligence and
skill in the discharge of his duties."
The court went on to say:
... Of the measure of diligence and skill demanded
in particular circumstances, where a technical qualification such
as seamanship is in question, it is for qualified experts to advise.
It is not open to the pursuer, through the medium of argument
addressed to Judges, to suggest that any particular action or
non?action on the part of the defender in such affairs as seamanship
may be assessed by such Judges as evidencing a failure in seamanship
or a failure in diligence. Such an argument must be supported
by expert evidence or have the assent of a nautical assessor.
 The defendant's representatives were cognizant
of the approaching hurricane, and turned their mind to preparing
for it. The personnel in charge of Sackville were experienced
seamen who monitored Sackville (and the moorings) in the days
and hours before the hurricane. Sackville's moorings were designed
with heavy weather in mind, since Sackville was a deadship without
a full crew and without working machinery or propulsion systems.
As such, the failure to put out additional lines in anticipation
of the hurricane was not in itself a failure of duty. There is
no evidence that the lines were in poor condition and the LOC
report and Mr. Simpson, in his evidence, suggested that the lines
broke due to sudden shock rather than chafing. Nor is it reasonable
to suggest that Sackville ought to have been moved to the dockyard
at the last minute. Hurricane Juan was a storm of unforeseen intensity,
and I am satisfied that Sackville's keepers could not have anticipated
the severity of the combined forces of wind, tide, surge and waves
that the ship would be exposed to."
B) License of Vessel is Clear Evidence of Title
Carlson v. Carlson  BCPC 228 (Canlii)
This case was about who was the true owner of the
vessel "Diablo". The vessel was, at the time of the hearing,
in the possession of the defendant, who had a licence for it issued
to her by Transport Canada. The claimant was the father of the defendant's
deceased husband, and claimed that he had at all times been and
remained the owner of the vessel. The claimant purchased the vessel
from its manufacturer. The issue was whether or not the claimant
gave the vessel to the defendant's deceased husband, the claimant's
The court reviewed the evidence that was available
(some of it hearsay and some of it circumstantial) about the purchase
of the vessel, the oral testimony by the father that he had not
gifted the vessel to his son but simply allowed the license to be
issued in the son's name, details of the use of the vessel by the
son and father, and details of payments for repairs by the father.
The father stated that the license was issued in the son's name
because the claimant was often absent on business, his son was more
likely to be operating the vessel, and the claimant thought that
it would be easier if his son was ever stopped or inspected by the
authorities if the vessel were licensed in his name.
The court reviewed the Small Vessel Regulations under the Canada Shipping Act, as they existed in 2002 and
stated, "although the vessel license is not determinative of
title, it is clear evidence of title."
The court concluded that the vessel belonged to the
son. Determinative of the issue was that the license was in the
son's sole name.
C) Application for Arbitration Denied - Brought
Star Tropical Import & Export Limited v.
International Project Management Consortium Ltd., 2011 ONSC
This case related to contracts entered into in Canada
concerning two shipments of sugar from Brazil to a port in Ghana.
The contracts were negotiated in Canada between two Canadian companies
having offices in southern Ontario. The plaintiff was located in
Brampton. The defendant company had an office located in Scarborough.
The first contract related to 12,500 metric tons of white refined
sugar, which contract was entered into in November of 2006. A second
contract relating to 8,250 metric tons of sugar was entered into
on April 17, 2007. Problems developed with respect to both contracts.
In October of 2007, the plaintiff commenced the action in Toronto
against the defendant company and its chief executive officer, the
defendant Paul Arun Singh. More than three years later, an application
was brought before the court by the defendants seeking a stay of
the action, in order to permit an arbitration to take place, in
accordance with arbitration clauses in each contract. The plaintiff
company resisted the application and sought to have the action determined
by the Superior Court of Justice in Ontario.
The court examined whether the arbitration clauses
triggered an international arbitration. It looked at Ontario's International
Commercial Arbitration Act (the "ICCA"), which applies
to disputes falling within the purview of that statute. The court
also looked at the Ontario Arbitration Act, 1991, which relates
to any arbitration not subject to the ICCA.
The court looked at section 3 of the ICCA which states:
(3) An arbitration is international if:
(a) the parties to an arbitration agreement have, at the time
of the conclusion of that agreement, their places of business
in different States; or
(b) one of the following places is situated outside the State
in which the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to,
the arbitration agreement,
(ii) any place where a substantial part of the obligations
of the commercial relationship is to be performed or the place
with which the subject-matter of the dispute is most closely connected;
(c) the parties have expressly agreed that the subject-matter
of the arbitration agreement relates to more than one country.
[Emphasis added by the court]
Based upon the review of the facts in this case, the
court was satisfied that the disputes concerning both contracts
in this action were not subject to the ICCA but rather the Arbitration Act 1991.
The court then looked at s. 7 of the Arbitration Act
1991 which provides:
7.(1) If a party to an arbitration agreement commences
a proceeding in respect of a matter to be submitted to arbitration
under the agreement, the court in which the proceeding is commenced
shall, on the motion of another party to the arbitration agreement,
stay the proceeding.
(2) However, the court may refuse to stay the proceeding in any
of the following cases:
1. A party entered into the arbitration agreement while under
a legal incapacity.
2. The arbitration agreement is invalid.
3. The subject-matter of the dispute is not capable of being the
subject of arbitration under Ontario law.
4. The motion was brought with undue delay.
5. The matter is a proper one for default or summary judgment.
[Emphasis added by the court]
The court refused to stay the litigation for a number
of reasons including the involvement of a defendant, who was not
a party to any arbitration agreement; the terms of the earlier orders
extending time and restoring the plaintiff's action; the delay by
the defendants in bringing this motion and the failure to seek to
promptly exercise any possible parallel rights to launch an arbitration,
notwithstanding the existing litigation.
D) Airline Subject to $100 Damages for Delay in
Monast c. Sunwing Airlines Inc., 
QCCQ 8565 (CanLII)
The claimant Paul Monast claimed the sum of $425 and
for various expenses incurred as a result of a delay in a vacation
flight to Santiago from Montreal. The flight was to leave at 9 a.m.
It left at 9:45 p.m. the same day.
Mr. Monast paid $745 + $240 taxes for his flight and
hotel for a stay of two weeks. Sunwing Airlines operates charter
flights that are subject to change as prescribed in the contract.
The plaintiff claimed the sum of $395 representing
the loss of a day's holiday, and the repayment of the $30 paid for
the reservation of a seat, which specific seat he never obtained.
The court held that this was a case of a consumer
contract governed by the provisions of the Quebec Civil Code and Law on Consumer Protection Act (RSQ c. P-40.1) requiring
a carrier to fulfill its contractual obligations, unless there was
proof of force majeure or a fortuitous event.
The court concluded that the defendant had not proven
a case of force majeure or unforeseeable circumstances that delayed
the flight. There was a reference on the invoice "The Flight
schedules are always subject to change violated Article 10 of the
Consumer Protection Act (RSQ c. P-40.1) which prohibits clauses
that exempts merchants from contractual obligations.
The court, found, however, that the claim was exaggerated,
given that the applicant had paid $715 for 14 nights. The court
arbitrarily fixed at the sum of $100 damages to the plaintiff Paul
Monast, which also included $30 in reimbursement for seat reservations
The court ordered the defendant Sunwing Airlines Inc.
to pay the plaintiff the sum of $100 with interest at the legal
rate as of January 11, 2010, with each party bearing its own costs.
E) IATA Agent Was a Trustee for Air India
Richards v. Air India Ltd., 2011 BCSC 1171
The plaintiff, Ceylinco Investments Ltd., operating
as Chalais Travel & Tours, carried on a travel agency business
from approximately 2002 until May 2008. The plaintiff, Wesley Richards,
was the sole shareholder of Ceylinco. Ceylinco was approved by the
International Air Transport Association ("IATA") as an
accredited agency in April 2002. On April 8, 2002, Ceylinco entered
into an IATA Passenger Sales Agency Agreement (the "agency
agreement"). IATA is an international association comprised
of airline companies. Pursuant to its terms, the agency agreement
governed the relationship between Ceylinco and all of the member
airlines of IATA. At all relevant times, Air India Ltd. was an IATA
member airline. Ceylinco's travel agency business was almost exclusively
limited to providing services for individuals traveling to India.
As a result, most of the airline tickets sold by Ceylinco were for
flights on Air India and connector airlines.
This action arose from a dispute between Air India
and Ceylinco over certain tickets issued by Ceylinco for Air India
flights. Air India said that Ceylinco failed to pay for 62 tickets,
with a value of $117,791.17, which tickets were used for flights
by passengers (the "Disputed Tickets").
In order to protect itself against potential losses,
Air India required its agents to designate it as the beneficiary
on an irrevocable standby Letter of Credit. The amount of the Letter
of Credit required by Air India varied depending on the nature of
the authority given to the agent by Air India. On November 1, 2007,
Ceylinco entered into an agreement (the "net fares agreement")
that required it to provide a $100,000 Letter of Credit (the "LOC")
for the benefit of Air India. The LOC was provided by the State
Bank of India. When Ceylinco did not respond to Air India's requests
for payment for the Disputed Tickets, Air India negotiated the LOC.
Air India counterclaimed for the additional $17,791.17, which it
said Ceylinco still owed for unpaid tickets.
The court heard the testimony of Wesley Richards and
of Shyam Sundar, Air India's regional finance manager. Where there
was a discrepancy of evidence between the two, the court preferred
the evidence of the Air India witness. The court also reviewed the
terms of the agency agreement and the net fares agreement.
The court concluded that Ceylinco was a trustee for
Air India in respect of monies received by Ceylinco for the sale
of airline tickets. At all relevant times Ceylinco was bound by
the terms of the agency agreement and required to follow the procedures
in the IATA agent's handbook. None of the provisions of the agency
agreement or resolutions in the handbook restricted the time period
within which Air India could advance its claims for breach of trust.
Those claims were brought well within the limitation periods in
British Columbia. Ceylinco failed to pay for all of the Disputed
Tickets. Ceylinco failed to account for the sales of tickets and
was in breach of trust for failure to pay for the Disputed Tickets.
It acted dishonestly when it issued tickets and purported to void
those tickets without cancelling the reservations and retaining
the tickets. Mr. Richards, although a stranger to the trust, was
found personally liable for providing knowing assistance to Ceylinco
in its breaches of trust. Air India was entitled to retain the $100,000
received when it negotiated the LOC. In addition, it was entitled
to recover the balance owing of $17,791.71 from Ceylinco and Mr.
3. Canadian Court Upholds The Montreal Convention In The Face Of Conflicting Local Rules
Ms. Rita Lemieux was embarking on an international
flight leaving from Stanfield International Airport in Halifax.
It was August 11, 2005 and the weather reports showed a storm was
coming in. The plane was being boarded directly from the airport's
tarmac when Ms. Lemieux slipped and was allegedly injured.
Ms. Lemieux brought a suit against the airport and
the air carrier, Air Canada, for the injuries she claimed she suffered
that day (*1). However, Ms. Lemieux commenced her lawsuit five and
a half years after the incident. Air Canada brought a preliminary
motion to dismiss Ms. Lemieux's case in the opening stages of the
action on the basis of time-bar.
Air Canada argued that the terms of the current international
convention governing air travel, commonly referred to as the Montreal
Convention (*2), meant that Ms. Lemieux must commence her suit
within 2 years of the incident. Therefore, Air Canada argued, Ms.
Lemieux's action was "time-barred" and could be dismissed
without the need for a trial. In other words, Air Canada sought
to prevent Ms. Lemieux's action from ever "getting off the
Ms. Lemieux countered that the local court did not
have to strictly apply the terms of the Montreal Convention.
Ms. Lemieux reasoned that the local laws in Nova Scotia allowed
the court to ignore any limitation period as long as the court thought
it was fair and equitable to do so.
In fact, Ms. Lemieux argued that Air Canada was, in
a sense, out of time to raise the time-bar defence. The Limitation
of Actions Act allows potential defendants to bring an application
to the court for an order to declare a potential claimant's action
"time-barred", but, if the potential defendant does not
do this, then the court retains the right to ignore any "time-bar"
defence, if the court feels it would be fair and equitable to do
so. There was no dispute that Air Canada failed to get a preemptive
order barring Ms. Lemieux's claim. Ms. Lemieux reasoned, therefore,
that given her injuries and her circumstances, it would fair and
equitable to allow her action to continue.
The parties agreed that the Montreal Convention applied. The only question was whether Nova Scotia's Limitation
of Actions Act could modify the Montreal Convention by
importing its rule that time-bars could be ignored where there was
no preemptive order and where it could be fair to do so. Or, as
the judge put it, "Does the Convention oust local law?"
(*3) The court's answer: an emphatic "no":
The Montreal Convention is a complete Code on
the subject of airline liability and the plaintiff has not brought
her action within the two year limitation period set out in the
Convention. That provision is a substantive one and ousts the
jurisdiction of domestic courts in Nova Scotia (and elsewhere)
to apply their own law to the limitation period. [*4]
The court reviewed the existing judgments in Canada
and around the world, and found a consistent pattern in upholding
the terms of the Montreal Convention in the face of contrary
local rules. As stated by the House of Lords (the "Supreme
Court" of England), the reason for that pattern is international
consistency and stability in the air transportation sector:
To permit exceptions, whereby a passenger could
sue outwith the Convention for losses sustained in the course
of international carriage by air, would distort the whole system,
even in cases for which the Convention did not create any liability
on the part of the carrier. Thus the purpose is to ensure that,
in all questions relating to the carrier's liability, it is the
provisions of the Convention which apply and that the passenger
does not have access to any other remedies, whether under the
common law or otherwise, which may be available within the particular
country where he chooses to raise his action. (*5)
Ms. Lemieux provided examples of cases in Nova Scotia
where courts found it fair and reasonable to extend the limitation
period, but did not provide any air transportation cases on point.
Ms. Lemieux did point to an extension of a limitation period in
a railway case, but the court found that case inapplicable. (It
was not stated as a reason, but, unlike the Carriage by Air Act,
Canadian railway legislation is not, in substance, the importation
of an international treaty, and so the need for international conformity
does not exist in that context).
The judge ultimately rejected Ms. Lemieux's arguments
and reasoned that the Montreal Convention's terms had to
stand on their own. It would be an impermissible encroachment on
an international system for the court to ignore or modify any of
the terms of the Montreal Convention:
"It would be entirely contrary to that purpose
to allow different limitation periods to be set by domestic law
of all the states, provinces, counties, etc., in each country
which is a signatory. That would result in a lack of harmony and
unity in the application of the Convention which it was designed
to create." (*6)
As a result, Ms. Lemieux's case was dismissed.
*1 Lemieux v. Halifax International Airport Authority, 2011
NSSC 396 (CanLII) ("Lemieux")
*2 The full title of the Montreal Convention is the Convention for
the Unification of Certain Rules for International Carriage by Air,
and is ratified into Canadian law by the Carriage by Air Act, R.S.C.,
1985, c. C-26.
*3 Lemieux at para. 7
*4 Lemieux at para. 24
*5 Lemieux at para. 15, citing Sidhu and others v. British Airways,
 AC 430 at 447
*6 Lemieux at para. 22
4. THE CHILLING FUTURE OF SHIPBUILDING IN CANADA
It is a curious feature of our times that we are able
to state unequivocally that the future of the Canadian shipbuilding
industry is cold, bleak and barren, while, at the same time, the
shipbuilding industry triumphantly celebrates the start of a period
of massive economic productivity that is forecasted to continue
for more than twenty years.
The non sequitur above has a simple explanation:
The National Shipbuilding Procurement Strategy
On October 19, 2011, the Secretariat of the National
Shipbuilding Procurement Strategy ("NSPS") announced the
result of the Request for Proposals to rebuild the fleets of the
Royal Canadian Navy and the Canadian Coast Guard, which represents
the largest procurement sourcing arrangement in Canadian history.
Irving Shipbuilding Inc., the Nova Scotia-based operation
that has built over 80% of Canada's current surface combat fleet,
was selected to build the combat vessel work package (21 vessels).
Seaspan Marine Corporation, which owns and operates Vancouver Shipyards
Co. Ltd., was selected to build the non-combat vessel work package
(7 vessels). The total value of both packages is $33 billion and
will span 20 to 30 years. (*2)
Not yet awarded, the NSPS process includes small ship
construction (116 vessels) of an estimated value of $2 billion,
which will be set aside for competitive procurement amongst Canadian
shipyards other than the yards selected to build the larger vessels.
Additionally, regular maintenance and repair, valued at $500 million
annually, will be open to all shipyards through normal procurement
It is still too early to know exactly how many jobs
will be created and when and where they will be located because
the designs for the ships are yet to be finalized and the contracts
are yet to be put in place with the shipyards, which will require
the use of a significant number of sub-contractors. (*4) Moreover,
despite the fact that a considerable portion of the large shipbuilding
will be done by the two selected yards noted above, it is estimated
that over half of the value of the shipbuilding contracts could
flow to the broader marine industry. According to the NSPS website:
The distribution of work is likely to include other
shipyards as well as firms in related industries that manufacture
equipment used on the ships or that provide services essential
to the project. Many of these undoubtedly will be small and medium-sized
] outside of the regions where the two selected
yards are located.
Between the two major contracts ($33 billion); the
not yet awarded small ship construction contract ($2 billion); and
the regular maintenance and repair work ($500 million annually),
shipbuilding and its related industries share unprecedented optimism
as they look forward to decades of productivity and growth. The
byproducts of the investments should include, amongst other things,
significant improvements to existing shipbuilding infrastructure
and the development of a larger, better-trained workforce. It is
foreseeable that related sectors, such as the steel industry, marine
equipment, technology manufacturers, and the commercial shipping
industry, will benefit from the massive investment
Naturally, with the Government of Canada investing
more than $30 billion of its taxpayers' dollars during these difficult
economic times, the obvious question to ask is "why?"
The Canada First Defence Strategy
The Canada First Defence Strategy ("CFDS")
is the military recruitment and improvement strategy of the Canadian
government to improve the overall effectiveness of the Canadian
Forces. The strategy aims to enforce Arctic sovereignty alongside
the Royal Canadian Mounted Police and the Coast Guard. In the words
of National Defence and Canadian Forces: (*6)
Starting in 2006, the Government of Canada began laying
the foundation for a more integrated, adaptive and capable force
by recognizing that the military is a vital national institution
essential to the security and prosperity of Canada and by making
initial but significant investments to address critical gaps in
personnel and equipment. The Canada First Defence Strategy translates
this vision of a first-class, modern military into a comprehensive
20-year investment plan.
In Canada's Arctic region, changing weather patterns
are altering the environment, making it more accessible to sea traffic
and economic activity. Retreating ice cover has opened the way for
increased shipping, tourism and resource exploration, and new transportation
routes are being considered, including the Northwest Passage. (*7)
While this promises a substantial economic benefit for Canada, it
also has "important implications for Canadian sovereignty and
security and a potential requirement for additional military support."
Simply put, the Arctic represents a new frontier with
the potential for enormous development and, ultimately, may be the
future of Canada's continued success. As the Arctic's importance
grows, Canada's claim to the vast, relatively unpopulated area (for
reference, Canada's Arctic territory is greater in size than India)
will encounter greater and more frequent challenges. In early response,
it appears that the Canadian government has adopted an Arctic sovereignty
strategy, via the CFDS, that can be described in a single word:
The National Shipbuilding Procurement Strategy represents
an important step in the Canadian government's implementation of
the CDFS and, to that end, Canada's Arctic presence. The combat
package awarded to Irving Shipbuilding Inc. includes the Royal Canadian
Navy's Arctic Offshore Patrol ships and the Canadian Surface Combatants
ships. The non-combat package awarded to Seaspan Marine Corporation
includes the Navy's joint support ships, the Canadian Coast Guard's
offshore science vessels and the new polar icebreaker. (*9) In fact,
the Arctic Offshore Patrol Ships and the Science Vessels, including
the polar icebreaker, are scheduled to be the first ships to enter
The Arctic Offshore patrol, icebreaking ships will
conduct armed surveillance in Canada's waters, including in the
Arctic and will also provide icebreaking services to others. (*11)
The centrepiece of Canada's northern strategy will be the construction
of the Coast Guard science ship, the CCGS John G. Diefenbaker flagship
polar icebreaker. Once it's completed in 2017, the polar icebreaker
CCGS John G. Diefenbaker will be the largest, most powerful vessel
Canada has ever owned. (*12) Regarding its capabilities: (*13)
The new icebreaker will provide the Canadian Coast
Guard with increased coverage in the Canadian Arctic and adjacent
waters and will be able to operate during three seasons in the
Arctic, over a larger area and in more difficult ice conditions
than is currently possible.
Once these ships are completed, the Government of
Canada will have a vastly expanded capacity to exert presence and,
thereby, sovereignty over our Arctic territory.
With increased Arctic activity and expanding Arctic
trade routes, it is only natural that private/commercial activity
will increase in the area. Commercial parties should be aware that
Arctic shipping in Canada is governed by several pieces of legislation.
Principally these are the Arctic Waters Pollution Prevention
Act, the Canada Shipping Act 2001, the Marine Liability
Act, the Marine Transportation Security Act, the Coasting
Trade Act, and the Canada Labour Code as well as their
respective regulations. (*14) These acts were created to "enhance
safety and to protect life, health, property and the marine environment."
For example, ships must be designed, built, and equipped
to resist ice loads and to handle Arctic weather and operating conditions.
Canadian construction standards for ice class ships are found in
the Arctic Shipping Pollution Prevention Regulations, under
which is the responsibility of ship builders and owners to ensure
that their ships are built to proper standards. (*16)
Arctic ship owners, as well as any other party with
commercial or legal interests in Arctic shipping, be it insurers,
shippers, operators, or otherwise, should familiarize themselves
with the legislation and potential legal issues thereunder as this
massive area of economic opportunity continues to open up with the
Government of Canada and its new Arctic fleet boldly clearing the
path for private enterprise into this frontier of possibility.
*1 "Results of the National Shipbuilding
Procurement Strategy" Government of Canada News Centre website
(October 19, 2011): http://news.gc.ca/web/article-eng.do?mthd=tp&crtr.page=1&nid=629989.
*2 Ibid; "Irving Shipbuilding Stands Ready to Build Canada's
Next Generation Federal Combat Fleet", Irving Shipbuilding
Inc. News Release website (October 19, 2011): http://www.irvingshipbuilding.com/irving-shipbuilding-news.aspx#October19
*3 "National Shipbuilding Procurement Strategy - Storyline,"
Public Works and Government Services Canada website (October 19,
supra, note 1.
*4 "Backgrounder: NSPS - Economic Benefits", Public Works
and Government Services Canada website (September 26, 2011):
*6 "Canada First Defence Strategy - Introduction," National
Defence and the Canadian Forces website (August 5, 2011):
*7 "Canada First Defence Strategy - Strategic Environment,"
National Defence and the Canadian Forces website (August 5, 2011):
*9 Supra, note 1.
*11 "NSPS - The Ships to be Built" Public Works and Government
Services Canada website (September 19, 2011): ("NSPS Ships"); "The CCGS John G. Diefenbaker National
Icebreaker Project" Fisheries and Oceans Canada (October 7,
2011): ("CCGS Diefenbaker").
*12 CCGS Diefenbaker, Ibid.
*13 CCGS Diefenbaker, supra, note 11.
*14 Arctic Waters Pollution Prevention Act (R.S., 1985, c. A-12);
Canada Shipping Act 2001, (S.C. 2001, c. 26); Marine Liability Act,
(S.C. 2001, c. 6);
Marine Transportation Security Act, (S.C. 1994, c. 40); Coasting
Trading Act, (S.C. 1992, c. 31); Canada Labour Code, (R.S.C., 1985,
c. L-2); and THE regulations thereunder each act.
*15 "Arctic Shipping" Transport Canada website (August
19, 2010): http://www.tc.gc.ca/eng/marinesafety/debs-arctic-menu-303.htm.
*16 Ibid; Arctic Shipping Pollution Prevention
Regulations (C.R.C., c. 353).
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