GLOBAL MINING UPDATE
APRIL 1999
Quebec court decides to dismiss proceedings
Tailings dam collapse to be litigated in Guyana
Recherches Internationales Québec v. Cambior inc. [1998] Q.J.No. 2554, a decision of Justice Maughan of
the Québec Superior Court (Class Action), District of Montreal, August 14, 1998.
A judge of the Québec Superior Court has dismissed proceedings brought by a public
interest group against a Canadian mining company following the spill of cyanidecontaminated tailings at a subsidiary’s mine site. The judge found that while the courts of
Québec had joint jurisdiction with the courts of Guyana, neither the victims nor their action
had any real connection with Québec and, as such, Guyana is the more appropriate forum
for the action.
THE SPILL
On the night of August 18 - 19, 1995, the tailings dam at the Omai Mine failed. The
collapse released approximately 2.3 billion litres of mine tailings into the Essequibo River,
the main waterway of Guyana. The liquid contained cyanide, heavy metals and other
pollutants.
The mine is owned by Omai Gold Mines Limited (Omai), a company incorporated in
Guyana. Cambior Inc. (Cambior) owns 65% of Omai, with the other shareholders being
Golden Star Resources Limited and the Government of Guyana.
It has been claimed that up to 23,000 people living in the Essequibo region have been
adversely affected by the spill, primarily through the contamination of the Essequibo River,
which resulted in the cyanide contamination of the aquatic wildlife on which the residents
subsist. The Essequibo River is the victims’ principal transportation route and their source
of water for drinking and bathing.
THE CLASS ACTION
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A public interest group, Recherches Internationales Québec (RIQ), filed a motion in the
Québec Superior Court seeking authorization to institute a class action on behalf of the
victims. RIQ argued that Cambior and Omai were “one and the same” and that, in effect,
Omai was nothing more than a legal shell through which Cambior acted in Guyana.
Consequently, RIQ maintained, Cambior should be fully liable for the spill. RIQ sought
damages of $69,000,000 ($3,000 for each of the 23,000 victims), orders requiring the
cessation of any ongoing discharges into the Essequibo River, and the remediation of all
environmental damage caused by the spill.
Cambior filed a Declinatory Exception contesting the jurisdiction of the Québec Superior
Court to try the case. Cambior argued that RIQ’s motion did not disclose on its face that
the Superior Court of Québec had jurisdiction over the subject matter and, alternatively, if
the Court did have jurisdiction, the Court should decline to exercise that jurisdiction on the
basis that the Courts of Guyana are in a better position to decide the issues. Cambior was
ultimately successful on the latter argument.
THE DECISION
Jurisdiction of Québec Courts
Cambior argued that RIQ should have sued Omai, not Cambior. Cambior argued that Omai
was a separate and distinct company and that, among other things, Omai was responsible for
the design, construction and operation of the mine. RIQ, on the other hand, put forward
evidence that Cambior did, in fact, exercise effective control over Omai.
Justice Maughan stated that it would be premature to draw preliminary conclusions
regarding Cambior’s liability, as principal, for the acts of Omai, as agent. Justice Maughan
decided that Québec Courts did have jurisdiction to decide the class action proceedings.
The question was then whether the Court should decline to exercise jurisdiction in favour of
the Courts of Guyana.
Forum Non Conveniens
From time to time, a Court will decline to hear a case if it considers that the courts in
another jurisdiction are in a better position to decide the matter. Cambior asked the Québec
Court to apply this doctrine of forum non conveniens and to let the matter be decided by the
Courts of Guyana. Cambior did have to promise that, if the Court dismissed RIQ’s motion
and the victims started proceedings in Guyana, Cambior would not argue in Guyana that the
case should be heard by the Québec Courts.
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In deciding whether to decline to hear the case, the Court looked at whether Québec or
Guyana was the “natural forum” to hear the case; in other words, which jurisdiction had
“the most and real substantial connection” with the action?
After warning that the Court would not make its decision by “adding up on a scorecard the
factors which weigh in favour of or against each party”, Justice Maughan analyzed a number
of factors including the following:
The residence of the parties and the witnesses: Although both Cambior and RIQ have
a presence in Québec, the 23,000 Guyanese victims of the spill, including the three
“designated members” bringing the class action, are all residents of Guyana. Justice
Maughan noted that “Québec is hardly the home forum of the victims of the spill. Guyana
is.” Similarly, the location of the witnesses favoured the selection of Guyana as the
appropriate form.
The location of the elements of proof: The Essequibo River, the plans and documents
relating to the construction of the mine and the tailings dam, the medical records of the
victims, government records relating to the mine and the spill and the mine itself are all
located in Guyana. Further, a Guyanese judge would be better able to assess the social and
economic consequences of the discharge of the effluent into the Essequibo River.
The place where fault occurred: Although, as RIQ argued, the decisions which Cambior
made with respect to the design, construction and operation of the mine and tailings pond
occurred in Québec, Omai managed and operated the mine on a daily basis in Guyana and,
more importantly, the collapse of the dam occurred in Guyana.
The location of the defendant’s assets: Since Cambior has assets in both Québec and
Guyana, the judge decided that “the victims should have little difficulty in executing a
successful judgement” against the assets in either jurisdiction.
The law applicable to the litigation: Both Cambior and RIQ conceded that the law of
Guyana applied even if the damages suffered by the victims in Guyana may have resulted
from the decisions made by Cambior in Québec. Clearly, a Guyanese court would be in a
better position to consider the matter under Guyanese law.
The advantages to the plaintiffs of suing in Québec: If the matter was heard in Québec,
the plaintiffs would have been able to bring a class action proceeding, which has a number
of advantages over the types of action available to the plaintiffs in Guyana. For example, in
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a Québec class action, it is not necessary to prove that each of the 23,000 plaintiffs suffered
damage caused by Cambior. Instead, the court could order what is called “collective
recovery”.
The interests of justice: RIQ claimed that the victims would be denied justice if the case
was heard in Guyana. The judge described the testimony of one of RIQ’s witnesses as
indicating that, “Guyana is little more than a judicial backwater such that a refusal by the
Court to exercise its jurisdiction by referring the case to the courts of Guyana would likely
result in a violation of the victims’ human rights and denial of justice.”
Cambior presented a number of witnesses to refute RIQ’s claims. In the end, Justice
Maughan held that RIQ had failed to bring forward any conclusive and objective evidence to
substantiate its claims that the justice system in Guyana was so deficient that the plaintiffs
would be denied justice if the case proceeded in Guyana.
CONCLUSION AND COMMENTARY
Justice Maughan decided that the Guyanese victims “have no legitimate claim to the
advantages of the Québec forum and its class action legislation” and that the “ties which
bind the victims to Québec are tenuous, at best”. Having decided that the High Court of
Guyana was in a better position than the Superior Court of Québec to decide the issues, the
Court granted Cambior’s Declinatory Exception bringing the present case to an end.
This case illustrates that Canadian Courts are prepared to cede jurisdiction to the courts in
the country where an accident or incident occurred if those courts are the “natural forum”
to determine the matter. Of course, whether a court will decline to exercise jurisdiction
depends on the facts of the particular case; the plaintiffs may have a greater chance of
success where they can prove that the justice system in that other country is so deficient that
there is risk that the plaintiffs will be denied a fair hearing.