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B.C. trial court won’t hear human rights lawsuit filed by Guatemalans against Tahoe Resources

The British Columbia Supreme Court has declined to hear a lawsuit filed in June 2014 by seven Guatemalans who sought damages for injuries they claim to have suffered at the hands of security personnel at a mine owned by a subsidiary of TSX-listed Canadian mining company Tahoe Resources Inc.

Apart from its listing on the TSX and its registration in B.C., Tahoe had no business activities in Canada. Corporate headquarters was located in Reno, Nevada.

“Events in Guatemala, injuries suffered in Guatemala, have nothing to do with activities undertaken in the province of British Columbia,” said Karen Carteri of McMillan LLP, who represented the company, in her argument to the court.

The court agreed, ruling that Guatemala was the more appropriate forum for the determination of the case.

The decision is an important development for Canadian companies and others operating abroad who have assets in Canada given the Supreme Court of Canada’s ruling in Chevron Corp. v. Yaiguaje in September. In that case, the Supreme Court held that Ontario courts had jurisdiction over Chevron Canada, a subsidiary of Chevron Corp., in proceedings to determine the enforceability of an Ecuadorian judgment.

The ruling was widely seen as creating a significant increase in litigation risk for Canadian companies or companies with assets in Canada who faced suits based on events abroad. The SCC made its findings despite the fact that Chevron was not a party to the Ecuadorian case and was only a seventh-level indirect subsidiary of Chevron Corp. Because the case turned on the issue of enforcement and the sizable assets in Canada, the SCC concluded, there was no need for the plaintiffs to establish that the foreign court had a “real and substantial connection” either with the litigants or the underlying dispute in Ecuador.”

The BC case, by contrast, was a direct claim in Canada for damages based solely on the underlying events abroad, giving the BCSC a logical basis for concluding that such a connection was required.