DCW Updates
DCW Monthly: December 2024
We’re thrilled to share the newest edition of DCW’s premium monthly content. This month’s highlights include: * Five
DCW Feature
Pacific Atlantic Pipeline Construction Inc. v. Coastal Gaslink Ltd. [2024]
Canada's Court of Appeal of Alberta affirmed trial judgment, dismissing LC Applicant's appeal and terminating short term interim injunction.
![Pacific Atlantic Pipeline Construction Inc. v. Coastal Gaslink Ltd. [2024]](/content/images/size/w30/2024/08/pacific-atlantic-pipeline-case-summary-dcw.jpeg)
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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.
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.
Factual Summary:
At the request of its customer, Pacific Atlantic Pipeline Construction Inc. (Contractor/Applicant), HSBC Bank Canada (Issuer) issued a CAD 117,162,384 standby letter of credit in favour of Coastal Gaslink Ltd. (Principal/Beneficiary). Contractor/Applicant, a wholly owned subsidiary of Bonatti, S.p.A. (Contractor Owner), was engaged by Principal/Beneficiary in 2012 to construct certain sections of a liquid natural gas pipeline in British Columbia (the Contract). The standby LC was obtained to support performance by Contractor/Applicant.
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