Federal Appeal


Plaintiffs could not arrest more than one ship

At marine terminal facility owned by plaintiffs, defendant’s vessel struck and damaged part of trestle that led from shore to berth. Berth became unstable until repairs were affected and parts were replaced. Plaintiffs commenced action in Supreme Court of British Columbia and arrested vessel. Parties negotiated release of vessel from arrest. Defendant issued letter of understanding (LOU) of US $26 million and in consideration of LOU plaintiffs were to agree to release vessel from arrest and to refrain from arresting any other ship defendant owned. Plaintiffs decided that clause in LOU that prevented them from arresting sister ship of vessel was not acceptable. British Columbia Supreme Court judge found that there was legally binding agreement plaintiffs entered into pursuant to which they agreed to waive right to arrest sister ships in consideration of security being provided by defendant. Judge found there was no basis to set aside agreement on ground of mistake. Judge found that, pursuant to s. 43(8) of Federal Courts Act (Can.), plaintiffs could not arrest both vessel and sister ship. Plaintiffs appealed. Appeal dismissed. Judge correctly concluded that there was no mistake that could vitiate agreement. Plaintiffs knew of uncertainties of arresting more than one ship and agreed to terms of LOU fully aware of divergent opinions on issue. Pursuant to Act, plaintiffs could not arrest more than one ship. Plaintiffs could proceed either under s. 43(2) of Act to secure arrest of offending vessel or under s. 43(8) of Act to secure arrest of sister ship. Plaintiffs elected to proceed under s. 43(2) of Act and were barred from seeking arrest under s. 43(8) of Act. By enacting s. 43(8) of Act, Parliament intended to confer on plaintiffs in Canada right to arrest sister ship in lieu of offending ship. Parliament did not intend for Federal Court to exercise jurisdiction in rem under both s. 43(2) and (8) of Act for same claim.

Westshore Terminals Limited Partnership v. Leo Ocean S.A. (Oct. 15, 2014, F.C.A., Marc Nadon J.A., Eleanor R. Dawson J.A., and Johanne Trudel J.A., File No. A-101-14) Decision at 238 A.C.W.S. (3d) 281 was affirmed.  245 A.C.W.S. (3d) 496.

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