A Warning For Canadian Corporations With Foreign Subsidiaries

On July 22, 2013, the Ontario Superior Court of Justice handed down its highly anticipated decision in Choc v Hudbay Minerals Inc., 2013 ONSC 1414. Hudbay serves as a significant warning for Canadian corporations operating in foreign countries that they could potentially face civil liability in Canada for wrongs committed in foreign countries.

Background

In Hudbay, a group of indigenous peoples from Guatemala sued Hudbay Minerals Inc., a Canadian corporation, and its Guatemalan subsidiary, Compaňia Guatemalteca De Niquel (CGN), for alleged human rights abuses at a Guatemalan mining project owned through CGN. The Plaintiffs brought their claims in Ontario, not Guatemala.

Hudbay applied to strike the claims on the basis that the claims improperly relied on "piercing the corporate veil" or ignoring the separate corporate personalities of Hudbay, a Canadian corporation, and CGN, its Guatemalan subsidiary. Hudbay further argued that the Plaintiffs were seeking to