Aug 7, 2014

Originally published on March 9, 2010 on the Alexander Holburn Beaudin + Lang LLP Aviation Law Blog: http://aviationlawblog.ahbl.ca/

Author: Alexander Holburn Beaudin + Lang LLP

Honeywell Inc. leased an engine to Expedition Helicopters Inc. for use in its Astar 350 helicopter. The engine failed and the aircraft crashed. Expedition is located in Ontario and it sued Honeywell in Ontario. Honeywell brought a motion to stay the action on the grounds that the Engine Lease Agreement contained a forum selection clause which stated that the Courts of Phoenix, Arizona, would have exclusive jurisdiction over any actions arising in connection with the engine lease. Gauthier, J. of the Ontario Superior Court of Justice dismissed Honeywell’s motion and allowed the action to proceed in Ontario (Expedition Helicopters Ltd. v. Honeywell Inc.).

The language of the forum selection clause in the engine lease was clear and unambiguous. While the Court acknowledged the importance of holding contracting parties to their agreements, it followed the decision of the Court of Appeal for Ontario in Mobile Mini Inc. v. Centre Line Equipment Rentals Ltd.:

“Although a forum selection clause will play a dominant role in deciding the appropriate forum, it is not determinative of that issue.”

A motion to stay a proceeding on the basis of a forum selection clause, which designates another jurisdiction as the appropriate forum, will be granted unless the plaintiff shows “strong cause” for not enforcing the clause. Expedition argued that all of the evidence and witnesses necessary to prove its case existed in Ontario.

Interestingly, in a separate action commenced in South Carolina by the estate of a passenger killed in the accident, Honeywell had argued that Canada was a “far more appropriate and convenient forum for litigating the wrongful death action”.

Gauthier, J. noted Honeywell’s inconsistent position on jurisdiction and concluded that Honeywell’s motion “suggested an attempt at procedural advantage” as opposed to a genuine desire to have a trial in Arizona.