Pacific Atlantic Pipeline Construction Inc. v. Coastal Gaslink Ltd. [2024]

Pacific Atlantic Pipeline Construction Inc. v.
Coastal Gaslink Ltd. [2024]
2024 ABCA 74 (Can. Alta. C.A. Mar. 5, 2024) [Canada]

Type of Case: Applicant appealed denial of interlocutory injunction against standby Beneficiary.

Topics: Appeal; Arbitration; Autonomy (Independence) Principle; Contract Formation; Fraud; Good Faith; Injunction; Standard of Proof; Standby LC

Parties:
• Appellant/Contractor/Applicant – Pacific Atlantic Pipeline Construction Inc.
• Respondent/Principal/Beneficiary – Coastal Gaslink Ltd.
• Second Appellant/Contractor Owner – Bonatti, S.p.A.
• Issuer – HSBC Bank Canada

Underlying Transaction: Construction of liquid natural gas pipeline.

LC: Standby LC for CAD 117,162,384. Choice of law and practice rules not mentioned.

Decision: The Court of Appeal of Alberta, Crighton, Pentelechuk and Antonio, JJ., affirmed.

Rationale: Judgment affirmed where no reviewable error in trial application of higher standard of proof regarding interlocutory injunction on letter of credit demand by applicant against beneficiary; strong prima facie case standard applies regardless of whether action is taken against bank or LC beneficiary, or whether claim is fraud or breach of express forbearance agreement.