SCC Rules on Teck Cominco's Stay of Proceedings Request

More than three years of litigation over where a coverage dispute between Teck Cominco Metals Ltd. and its insurers should take place culminated in a recent decision of the Supreme Court of Canada denying Teck Cominco's request for a stay of proceedings in British Columbia because of concurrent coverage litigation in Washington State.

In Teck Cominco Metals Ltd. v. Lloyd's Underwriters, 2009 SCC 11, Teck Cominco asserts that it has available to it up to $779 million of insurance coverage arising from actual or anticipated environmental liability claims. This includes an ongoing action filed in the US District Court by numerous private citizens and the State of Washington seeking to hold Teck liable under a US statute (the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675) for environmental property damage allegedly caused by contamination of the Upper Columbia River and Lake Roosevelt in Washington State arising from the operation of Teck Cominco's lead and zinc smelter in Trail, BC.

The extent of the damages being claimed against Teck Cominco in the Washington State environmental proceeding is unknown. After the insurers failed to persuade a United States District Court judge that a coverage action brought by Teck Cominco in Washington should be stayed on forum conveniens grounds, Teck asked the BC Supreme Court to stay the insurers' action there on the basis of comity given the Washington court's assumption of jurisdiction. The judge declined to do so, holding that the prior assertion of jurisdiction by the US District Court was an important but not determinative factor, and that other factors favoured permitting the insurers' action in British Columbia to proceed. The BC Court of Appeal and the Supreme Court upheld the chambers judge.

The respondents Lloyd's Underwriters were represented by Graeme Mew and Anna Casemore of Toronto's Nicholl Paskell-Mede LLP and by Owen Jones of Gowling Lafleur Henderson LLP's Vancouver office.

Lombard General Insurance Company of Canada was represented by James H. MacMaster and Christopher A. Rhone of Vancouver's Branch MacMaster LLP and by Michael J. Sobkin of Gatineau, Québec.
Gary M. Nijman of Alexander Holburn Beaudin and Lang LLP in Vancouver appeared for Seaton Insurance.

The appellant Teck Cominco Metals Ltd. was represented by Gordon C. Weatherill, QC, Craig A.B. Ferris and Lisa A. Peters, all of Lawson Lundell LLP in Vancouver.