Case - Canada - Araya v. Nevsun

Araya v. Nevsun

Summary of facts

In 2014, three Eritreans launched an action in the British Columbia Supreme Court against Canadian mining company Nevsun Resources Limited. The plaintiffs claim that Nevsun expressly or implicitly approved the widespread use of forced labour by its local contractor, Segen Construction Company, at the Bisha mine in Eritrea. Eritrea is a single-party state with a notoriously repressive government. The Bisha mine is a joint venture between the government and Nevsun’s Eritrean subsidiary, Bisha Mining Share Company. The company is the majority owner. Segen is wholly owned by the Eritrean government.

The plaintiffs allege that they endured appalling working and living conditions, and were subjected to severe punishment for perceived disobedience. They claim that they were conscripted by the Eritrean government and forced to work at the Bisha mine. After the original plaintiffs filed their suit, 80 additional plaintiffs filed claims in a total of 10 separate actions. In 2018 the Chinese company Zijin Mining Group and its Canadian subsidiary acquired Nevsun Resources.

Timeline

2020 Supreme Court of Canada

Jurisdiction

Yes

Applicable Law

Customary international law as part of Canadian law

Legal issues

In 2018 Nevsun was granted leave to appeal before the Supreme Court of Canada.
In a January 2019 hearing, Nevsun challenged the appeal court’s ruling on the “act of state” doctrine and the plaintiffs’ use of international law. The company did not challenge the appeal court’s decision regarding forum non conveniens.

Ruling / Outcome

In March 2020, the Supreme Court of Canada ruled that the plaintiffs’ case could proceed. The court determined that the “act of state” doctrine does not form part of Canadian common law and is not an impediment to the plaintiffs’ claim. The court also ruled that companies may be sued in Canada for violations of customary international law, a significant development in Canadian law.
Settlement: The parties reached a settlement in October 2020.

2016 Supreme Court of British Columbia

Jurisdiction

Yes

Applicable Law

Customary international law; Canadian common law; British Columbia law

Legal issues

The plaintiffs sued Nevsun for conversion, battery, unlawful confinement, negligence, conspiracy and the negligent infliction of mental distress.
The plaintiffs argue that the company is responsible for forced labour; torture; slavery; cruel, inhuman or degrading treatment; and crimes against humanity, all of which are violations of customary international law norms.

Ruling / Outcome

Nevsun sought to have the case dismissed on several grounds including forum non conveniens. The company also relied on the “act of state” doctrine, which prohibits courts from ruling on the acts of foreign states. This doctrine had never been applied by Canadian courts. Nevsun argued that in order to make a determination about its behaviour, a Canadian court must first rule on the legality of the Eritrean government’s conduct, which the “act of state” doctrine prohibits. Nevsun further argued that the plaintiffs’ claims in customary international law must also fail as international law governs the acts and omissions of states, not companies.
In October 2016, Nevsun’s motion to dismiss the case was denied on all grounds by the Supreme Court of British Columbia. This lower court decision was upheld on appeal in November 2017.

Court case