Gavin Magrath, Magrath’s International Legal Counsel, Toronto, Canada

Re: Elroumi v. Shenzhen Top China Imp & Exp Co., Ltd China, 2018 FC 633

A recent decision of the Federal Court of Canada centered on the question of whether the Court had specific jurisdiction over a claim for cargo damage against a local trucker who completed delivery from the Port of Montreal to the consignee.

The Cargo had originated in China, traveled by sea to Vancouver and then by rail to Montreal. The “house bill” indicated the shipper and consignee (Elroumi) directly, for carriage to Vancouver; the carrier’s ocean bill indicated the sending and receiving freight forwarders (King Freight and Jet-Sea) as shipper and consignee, also indicating Hong Kong as port of loading Vancouver as port of discharge and Montreal as port of delivery.

Damage was noted on clearing customs, and local trucker Entrepot Canchi was hired to complete deliver to Elroumi. Elroumi apparently claimed against cargo insurers and made a partial recovery. Nearly three years later – not knowing where the locus of damages had been – Elroumi brought a claim against the vendor, the cargo insurer, the local trucker Entrepot Canchi, and the freight forwarder Jet-Sea. The ocean carrier (CMA-CGM) was not initially named as a defendant, but subsequently added by Entrepot Canchi’s third party claim.

The Federal Court of Canada is a statutory court of specific jurisdiction: matters not specifically reserved to the Federal Court are heard in the Provincial Courts, which have general jurisdiction over all legal claims. The Federal Court has specific jurisdiction over maritime and admiralty matters under s.22(2)(f) of the Federal Courts Act, which grants jurisdiction over:

(f) any claim arising out of an agreement relating to the carriage of goods on a ship under a through bill of lading, or in respect of which a through bill of lading is intended to be issued, for loss or damage to goods occurring at any time or place during transit; […]

Madam Justice Gagné noted that this jurisdiction over disputes arising out of carriage of goods under a bill of lading generally extends to on-carriage covered by a through bill of lading (see e.g. Matsuura Machiner Corp v Hapag Lloyd AG, 1997 CanLII 4905 (FCA). In exceptional cases this will  extend to Terminal Operators (see ITO-Int’l Terminal Operators v Miida Electronics1986 CanLII 91 (SCC), [1986] 1 SCR 752). 

Had the plaintiff named the ocean carriers, who had responsibility for the Cargo throughout the period of carriage indicated by the bills of lading, alleging damage either during the ocean voyage to Vancouver or the rail carriage to Montreal, then the matter would have been clearly within the carrier’s responsibility under the bill of lading and consequently within Court’s jurisdiction.

However, the plaintiff named the local truck carrier, whose contract for carriage was local in nature and did not arise out of carriage by sea under an international bill of lading. The Federal Court had no jurisdiction to hear this claim, which would have been properly brought before the Courts of Quebec.

Having lacked the jurisdiction to hear the plaintiff’s claim, the court also lacked jurisdiction to hear the third party claims brought by Entrepot Chanchi against CMA-CGM.

Accordingly, Jusice Gagné granted the motions brought by Entrepot Canchi and CMA-CGM, striking both the main claim against the trucker and the trucker’s third party claim against the ocean carrier. Interestingly, the Court chose to award only a token in costs: $500 from the plaintiff to each of the successful moving parties.