Executive Summary: Key Legal and Evidentiary Issues

• Pembina Pipeline applied to strike out the Notice of Civil Claim (NOCC) on the basis that it disclosed no reasonable claim.

• Steelhead alleged improper use of its confidential LNG project information by ARC and others, implicating Pembina indirectly.

• The judge found that Steelhead’s pleadings against Pembina improperly used blanket allegations without separating roles or facts.

• Claims of joint tortfeasor liability were inadequately pleaded and lacked material facts supporting a common unlawful purpose.

• Pembina’s shareholder and operator status was insufficient to ground liability without allegations of independent wrongdoing.

• The court struck out claims against Pembina but granted Steelhead leave to amend the NOCC within 45 days.

Facts and outcome of the case

Steelhead LNG Limited Partnership and Steelhead LNG Corp. brought a civil action against ARC Resources Ltd., Pembina Pipeline Corporation, Cedar LNG Partners LP, Cedar LNG Partners (GP) Ltd., and Marty L. Proctor. The plaintiffs claimed that the defendants improperly benefitted from Steelhead’s confidential information related to liquified natural gas (LNG) technology and project planning.

Steelhead’s case centered on its prior dealings with Seven Generations Energy Ltd. (7G), to whom it had disclosed confidential LNG-related information. When 7G merged with ARC in 2021, Steelhead alleged that ARC continued to use that confidential information unlawfully. The core allegation was that ARC used this information to gain commercial advantage in the Cedar LNG Project, an LNG export terminal under development near Kitamaat Village, British Columbia.

ARC and Cedar LNG Partners (partly owned by the Haisla Nation and Pembina) entered into long-term agreements in April 2024 to use the project’s full capacity. Steelhead claimed these agreements were only possible due to ARC's misuse of its confidential data. As a result, Steelhead alleged various legal wrongs including breach of confidence, unjust enrichment, knowing receipt of trust property, and inducing breach of contract.

Pembina Pipeline Corporation, one of the defendants, applied to have the claims against it struck out under Rule 9-5(1)(a) of the Supreme Court Civil Rules. Pembina argued that the pleadings disclosed no reasonable claim against it and that Steelhead had made imprecise, blanket allegations by lumping Pembina together with Cedar, despite their distinct legal roles. Pembina further asserted that it was not directly involved in the misconduct and should not be held liable simply due to its status as a shareholder or project operator.

The court agreed with Pembina. It held that Steelhead failed to properly plead how Pembina, specifically, committed any actionable wrong. The judge noted that Pembina’s alleged liability as a joint tortfeasor with Cedar lacked necessary factual support. While Steelhead claimed that Pembina and Cedar acted in concert, it did not adequately allege that this concerted action was in furtherance of a wrongful purpose.

As a result, the court struck out Steelhead’s claims against Pembina but granted Steelhead leave to amend its NOCC within 45 days to address the deficiencies. Pembina was awarded its legal costs for the application, regardless of the final outcome of the case. No damages were awarded at this procedural stage.