Executive Summary: Key Legal and Evidentiary Issues

• The defendant sought to stay proceedings based on a forum selection clause favoring the courts of Virginia, USA.

• Plaintiffs argued the clause was unenforceable due to prior agreement on different terms and lack of acceptance.

• Dispute centered on conflicting terms and conditions between Aegir's service contract and J.D. Irving's procurement terms.

• Aegir failed to show a mutually agreed-upon contract containing the Virginia jurisdiction clause.

• The court found no evidence of signature or express acceptance by the plaintiffs of Aegir’s terms.

• Costs were awarded to the plaintiffs after dismissal of the defendant’s motion for stay.

Facts and outcome of the case

The plaintiffs—Atlantic Merlin Shipping Limited, Atlantic Merlin Limited Partnership, and Atlantic Towing Limited—initiated a claim in the Federal Court of Canada following the failure of a bow thruster on the vessel Atlantic Merlin. The plaintiffs alleged that repair work performed by Aegir-Marine Americas LLC, assisted by D.F. Barnes Services Ltd., was negligently executed and caused further damage to the vessel. They sought over $3.9 million in damages. The incident took place in St. John’s, Newfoundland and Labrador, and involved marine mechanical repair services contracted in April 2023.

Aegir-Marine responded not by defending the claim on its merits, but by filing a motion to stay the action. It relied on a forum selection clause embedded in its “On-Site Maintenance & Repair Service Terms,” which designated the courts of the Commonwealth of Virginia, USA, as having exclusive jurisdiction. Aegir argued that this clause was incorporated into its contract with the plaintiffs through emails and supporting documents.

The plaintiffs objected, stating that no binding agreement incorporating Aegir’s jurisdiction clause existed. They relied on Aegir’s 2018 pre-qualification with J.D. Irving, which required adherence to JDI’s terms and conditions—including a jurisdiction clause specifying New Brunswick, Canada. The plaintiffs emphasized that no one had signed or expressly agreed to Aegir’s service terms, nor did Aegir have the contractual authority to unilaterally impose its own terms.

The court found in favor of the plaintiffs, holding that Aegir had not established that its forum selection clause was valid, enforceable, or mutually agreed upon. The evidence showed the clause required signatures which were absent, and there was no “meeting of the minds” confirming Virginia as the jurisdiction. The court ruled that Aegir’s motion failed at the first step of the legal test for enforcing a forum selection clause and dismissed the motion entirely.

In conclusion, the plaintiffs prevailed in resisting the motion to stay the proceedings. The court awarded them costs fixed in the middle of Column III of Tariff B, as per the Federal Courts Rules. No damages were awarded at this procedural stage.