



COURT OF APPEAL FOR ONTARIO

CITATION: Forbes Energy Group Inc. v.
    Parsian Energy Rad Gas, 2019 ONCA 372

DATE: 20190507

DOCKET: C65957

Doherty, Rouleau and Brown JJ.A.

BETWEEN

Forbes Energy Group Inc.

Plaintiff (Appellant)

and

Parsian Energy Rad Gas,
Pergas Oil & Gas
    DMCC
and
Frontier Corporate Holdings Ltd.

Defendants (Respondents)

Robert Staley and Jason Berall, for the appellant

Martin Mendelzon, for the respondents

Heard: May 1, 2019

On appeal from the order of Justice Sandra Nishikawa of
    the Superior Court of Justice, dated August 29, 2018, with reasons reported at
    2018 ONSC 5103.

REASONS FOR DECISION


[1]

At issue on this appeal is whether the motion
    judge erred in staying the Ontario action commenced by the appellant, Forbes
    Energy Group Inc. (Forbes), on the basis of
forum non conveniens
. In
    that action, Forbes seeks a declaration that it is under no obligation to make
    certain payments to the respondents, Pergas Oil & Gas DMCC (DMCC),
    Parsian Energy Rad Gas (Parsian) and Frontier Corporate Holdings Ltd.
    (Frontier), under the Term Sheet entered into by the parties regarding an
    upstream oil and gas rights transaction in Iran.

[2]

The Term Sheet contains the following clause:
    This term sheet shall be governed by and construed in accordance with the laws
    of England and the Parties agree to attorn to the courts of England (hereafter
    the Clause).

[3]

In December 2016, DMCC and Parsian demanded that
    Forbes make certain payments under the Term Sheet. Forbes disputed its
    obligation to do so and commenced this action in Ontario for a declaration that
    it was under no obligation to make the payments, together with other relief.

[4]

Relying on the Clause, DMCC and Frontier moved
    to stay the action in favour of the courts of England. The motion judge granted
    a stay. Although she found that Ontario courts had jurisdiction over the
    subject-matter of the dispute, she declined jurisdiction on the basis that
    Forbes had failed to demonstrate strong cause that the Clause should not be
    enforced:
Douez v. Facebook, Inc.
, 2017 SCC 33,
    [2017] 1 S.C.R. 751, at para. 29;
Novatrax International Inc. v.
    Hägele Landtechnick GmbH
, 2016 ONCA 771, 132 O.R. (3d)
    481, at para. 5. Applying the strong cause test and the factors relevant to the
forum non conveniens
analysis, she held that
    England is the more appropriate forum than Ontario. The motion judge stayed the
    action. Forbes appeals.

[5]

On this appeal, the parties agree that the strong cause test only
    applies to forum selection clauses that by their terms grant exclusive
    jurisdiction to a foreign jurisdiction. Forbes submits that the motion judge
    made no finding that the Clause was an exclusive jurisdiction clause. The
    respondents counter that she did.

[6]

We are unable to read the reasons of the motion judge as containing any
    finding that the Clause amounted to an exclusive jurisdiction clause. In light
    of the jurisprudence referred to by the parties, we are not persuaded that the
    language used in the Clause amounts to an exclusive jurisdiction clause. That
    being the case, in light of the parties consensus on the applicable legal principles,
    we conclude that the motion judge erred in using the strong cause test.

[7]

Given that conclusion, we accept Forbes submission that this court
    should conduct a fresh
forum non conveniens
analysis in which the
    respondents must demonstrate that England clearly is the more appropriate
    forum:

Club Resorts Ltd. v. Van Breda
, 2012 SCC 17, [2012] 1
    S.C.R. 572, at para. 108.

[8]

While the Clause remains a factor in the
forum non conveniens
analysis, it does not have determinative weight but must be considered together
    with all the other factors set out in para. 26 of
Young v. Tyco
    International of Canada Ltd.
, 2008 ONCA 709, 92 O.R. (3d) 161. Examining those
    factors:


(i)

there was no evidence that the Term Sheet was signed in either England
    or Ontario;


(ii)

we agree with the motion judge that: (a) there does not appear to be a
    strong connection between the subject matter of the Term Sheet and England; and
    (b) since the witnesses are scattered around the world, there is no one
    location that would be more convenient for all of the witnesses;


(iii)

although the Term Sheet provides that the law of England is the
    governing law, it is a common occurrence for an Ontario court to apply foreign
    law:
A1 Pressure Sensitive Products Inc. v. Bostik, Inc.
, 2009 ONCA
    206, at para. 4;


(iv)

there is no suggestion of the loss of a legitimate juridical advantage;
    and


(v)

on the record before us, there is nothing to suggest that the
    respondents contemplate bringing an action concerning the Term Sheet in
    England, thereby triggering Forbes obligation under the Clause to attorn to
    the jurisdiction of the English courts.

[9]

Taken together, the evidence does not persuade us that the respondents
    have demonstrated that England is a clearly more appropriate forum in which to
    litigate the parties dispute. Consequently, we are not prepared to decline the
    exercise of jurisdiction by the Ontario courts to hear the action.

[10]

For
    those reasons, we allow the appeal and set aside the stay granted by the motion
    judge. Forbes is entitled to its costs of the appeal fixed at $10,000,
    inclusive of disbursements and H.S.T. In accordance with the agreement of the
    parties, Forbes is also entitled to its costs of the motion below in the amount
    of $13,140.53, inclusive of disbursements and H.S.T.

Doherty J.A.

Paul Rouleau J.A.

David Brown J.A.


