Lessons from the Bennett Affair

Lessons from the Bennett Affair

Cally Jordan*

The Bennett insider trading saga has
spanned two jurisdictions and has dragged on
for over five. years. Based on an account of the
particular difficulties encountered in the Ben-
nett cases and a description of highly complex
securities markets being regulated by a patch-
work of regulatory enactments of questionable
legality, the author contends that there has
been a legacy of legislative abdication and a
disappointing judicial response towards secu-
rities matters in Canada.

Bennett est une affaire de d61it d’initi6 qui
dure depuis d6jt cinq ans et chevauche deux
provinces. A partir d’une analyse des difficul-
t6s soulev6es dans les causes Bennett et une
description de la complexitd de nos march6s
boursiers, qui sont r6glement6s par une pano-
plie de techniques dont la 16galit6 demeure
douteuse, l’auteure pr6tend que la question des
valeurs mobili~res au Canada a depuis long-
temps 6 n6glig6e par le 16gislateur et que la
r6action des tribunaux est tout aussi d6cevante.

* Associate Professor, Faculty of Law, McGill University; of counsel, Goodman Phillips & Vine-
berg. The author wishes to thank Graham Ganer and Mary-Ann St. James for their assistance in
the preparation of this article.
McGill Law Journal 1993
Revue de droit de McGill
To be cited as: (1993) 38 McGill L.J. 1071
Mode de r6f6rence: (1993) 38 R.D. McGill 1071

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Synopsis

Introduction
I.
II. The Proceedings

The Facts

A. Testimony before the British Columbia Securities Commission
B. Testimony before the Ontario Securities Commission

I. The Lessons to be Learned from the Bennett Proceedings

A. A Legacy of Legislative Abdication
B. Breakdown of Moral Suasion
C. A Disappointing Judicial Response
D. Multiplicity of Proceedings

1. Criminal Sanction
2.
3.

Civil Liability
Administrative Sanction

Conclusion
Appendix

“Unlike almost everyone else, many economists
reckon insider dealing is rather a good thing.”
– “Inside Out” The Economist (22 May 1993) 86.

Introduction

The Bennett insider trading saga has now dragged on for almost five years.’
It is an embarrassment, but an instructive one. It is instructive in that it throws
into sharp relief the conundrums facing securities regulation in Canada today.
It is an embarrassment to the extent that the affair is still far from being resolved
to the satisfaction of any of those concerned. 2 It is symptomatic of a regulatory
regime in crisis.

1R. v. Bennett (12 May 1989), Vancouver B06477C2 (B.C. Prov. Ct.), Craig J.; Ontario (Secu-
rities Commission) v. Bennett (1990), 72 O.R. (2d) 77, 66 D.L.R. (4th) 756 (H.C.J.), aff’d (1991),
1 O.R. (3d) 576, 77 D.L.R. (4th) 576 (C.A.) [hereinafter Ont. (S.C.) v. Bennett cited to O.R.]; Ben-
nett v. British Columbia (Securities Commission) (1991), 82 D.L.R. (4th) 129 (B.C.S.C.), aff’d
(1992) 69 B.C.L.R. (2d) 171, [1992] 5 W.W.R. 481, 94 D.L.R. (4th) 339 (C.A.) [hereinafter Ben-
nett v. B.C.(S.C.) cited to B.C.L.R.], leave to appeal to S.C.C. refused [1992] 6 W.W.R. lvii; Ben-
nett v. British Columbia (Superintendent of Brokers) (2 February 1993), Vancouver CA016670,
CA016671 and CA016672 (B.C.C.A.), Lambert LA.
2The cynical would point out that the lawyers are doing nicely, thank you very much. See P.

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The Ontario Securities Acd is badly in need of reform. As the OSA serves
as a model for securities legislation in other provinces,4 legislative deadlock
results. The constitutional logjam over federal/provincial jurisdiction in securi-
ties matters is far from resolved.’ Criminal prosecutions, at least for insider trad-
ing, seem doomed to failure. And, the courts have shown themselves reluctant
to redress the situation.

What has brought about such a sorry state of affairs? Extraordinarily rapid
change. Change which has outstripped the legislature’s ability to deal with it and
left the administrative agencies, the regulators, struggling to catch up with the
very inadequate means at their disposal. Money, securities, the stuff of securities
trading, have been reduced to electronic impulses, dematerialized. Transactions
are concluded across borders around the world in a twinkling of the eye, inev-
itably raising the question of who has jurisdiction to supervise them.’

Internationalization of the markets. Securities markets are no longer the
preserve of a few cozy local clubs, following their own unwritten (or minima-
listic) rules and minding their own business. The practices observed and forces
at work in the major international markets impose themselves on smaller
domestic and regional markets. To the extent that such influences provoke har-
monization and homogenization in the industry, they also herald the breakdown
of consensus and informal methods of constraint, resulting in fragmentation and
a moral crisis, if you will.

Regulatory arbitrage. The combination of instantaneous communications
across borders and the differences of regulatory regimes, both substantively and
as to their jurisdictional reach, opens up the possibility of regulatory arbitrage.
The response of regulators has been fairly ad hoc, by way of more or less

Lush, “Bennetts, Doman Can Appeal Hearing” The [Toronto] Globe and Mail (3 February 1993)
B3: “The marathon series of legal proceedings, fought by some of the most high profile lawyers
in Vancouver, undoubtedly has eaten up most of the profits from the Doman trading.” The Globe
and Mail reports that William Bennett gained $1,296,000 by selling before the halt in trading. See
P. Lush, “Bennetts to Face BCSC” The [Toronto] Globe and Mail (11 January 1993) B3.

3R.S.O. 1980, c. 466, now R.S.O. 1990, c. S.5 [hereinafter OSA].
4Quebec being the notable exception, having gone its own way in 1982.
5See, for example, “IDA Backs Provincial Regulation for Most Bank-Owned Brokers” The
Financial Post (22 June 1993) 3, summarizing the jurisdiction dispute over bank-owned brokers.
6Testimony introduced in the British Columbia Provincial Court proceedings, supra note 1 at
34-35, as to the actual trade by Russell Bennett through his British Columbia broker over The
Toronto Stock Exchange indicated how quickly the transaction took place:

Q. So also you told him that you could sell a hundred and ninety thousand [shares] at
eleven and three-eights?
[Broker]A. Yes, and that I could do it that instant.
Q. That’s it, you could do it virtually instantaneously with your machine, right?
A. Right.
Q. And when you told him after checking that you could sell a hundred and ninety
thousand he said to you, ‘Okay, sell it.’
A. He said, ‘Sell a hundred and ninety thousand.’
Q. Yes, and you did?
A. I did.
Q. All you had to do was push a button and it’s done and that’s what you did?
A. Yes.

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informal cooperation stopping short of legislative initiatives. In some instances,
these measures are highly effective;7 once challenged, however, gaping holes
and brick walls appear.

I. The Facts

The allegations of tipping and insider trading8 in the Bennett affair arise
from events occurring over the course of 1988. Doman Industries Limited
(“DIL”), a British Columbia company, was engaged primarily in the logging
and lumber business. DIL was controlled and managed by Herb Doman and
traded over The Toronto Stock Exchange.9

In early 1988, Louisiana-Pacific Corporation (“LP”), a major American
company, began to negotiate with Herb Doman, first with a view to forming a
joint venture, then to acquiring all or a controlling interest in DIL. A public
announcement to this effect was made on September 20, 1988. As a result, the
price of a DIL B shares jumped from 7:Y at the beginning of September 1988
to 11 /2 at the beginning of November 1988 and monthly trading volume during
this period nearly tripled.

Russell Bennett and his brother, William Bennett, had been accumulating
shares in DL since the fall of 1987. Over the course of October 1987 and June,
July, August and September 1988, William Bennett purchased a total of 329,300
DIL shares for himself and his family. Russell Bennett purchased DIL shares in
October, November and December 1987 and January, June, July and September
1988 for a total of 190,000 shares. Herb Doman, president of DIL, and Russell
Bennett were acquaintances, “enjoying a mutual interest in horses.”1

On November 4, 1988, in a conversation lasting a few minutes between
9:52 a.m. and 10:07 a.m., LP informed Herb Doman that LP would not go
through with the transaction. At 10:09 a.m., a telephone call lasting until 10:14
a.m. was placed from DIL’s offices to the offices of Russell Bennett. Russell
Bennett sold his holding in DIL on November 4, 1988 for over $2.1 million; the
trade took place over The Toronto Stock Exchange at 10:17 a.m. William Ben-
nett sold his 329,300 shares in DIL on November 4, 1988 for over $3.7 million;
the trade took place over The Toronto Stock Exchange at 10:21 a.m. Trading in

7The efforts of the Canadian Securities Administrators, regrouping provincial regulators, are
notable. The National Policy Statements which they produce and adopt, for example National Pol-
icy No.1, on Clearance of National Issues, have facilitated the operation of a national market.

The essence of insider trading involves the use of confidential information that will,
when made public, have a significant effect on the price of securities to which it relates,
by a person who obtains the information as a result of a relationship, usually with the
issuer, which provides him with access to it. In view of the easy transmissibility of
information, a statutory prohibition invariably encompasses not only direct use by trad-
ing, but also indirect use through procuring or advising others to trade or simply pass-
ing on the information without a proper business justification for doing so.

P. Anisman “Takeover Bid Issues and Insider Trading Legislation” in Basic Securities Law
(Toronto: Law Society of Upper Canada, Department of Education, 1991) F-1 at F-59.

9See Bennett v. B.C.(S.C.) (S.C.), supra note 1 at 143.
10 R. v. Bennett (B.C. Prov. Ct.), supra note I at 13.

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DIL shares was halted on The Toronto Stock Exchange an hour later at 11:19
a.m. The stock plummeted to $7.40 when trading resumed on November 7,
1988. Trading volume had dropped from 3,653,120 in October 1988 to 168,740
in December 1988.

The British Columbia Securities Commission and the Ontario Securities
Commission began a joint investigation of the transactions, three days later on
November 7, 1988.1

H. The Proceedings

Proceedings in the Bennett matter as of the writing of this note (August
1993) are still ongoing. Criminal charges under the British Columbia Offence
Actlz against Herb Doman and the Bennetts were dismissed in B.C. Provincial
Court in May, 1989. Similar charges laid in Ontario under the Provincial
Offences Act 3 were withdrawn shortly after the B.C. charges were dismissed.
Since then, the last four years have been spent in the so far successful efforts
of the Bennetts and Herb Doman to avoid an administrative hearing by either
the British Columbia or.Ontario Securities Commission into the allegations of
tipping and insider trading. Efforts of the Ontario Securities Commission to
obtain testimony from the Bennetts in British Columbia ended in 1991 with the
refusal by the Ontario Court of Appeal to issue an order requesting the assist-
ance of the British Columbia Court. Challenges to the holding of an administra-
tive hearing by the British Columbia Securitie Commission have already been
taken to the Supreme Court. of Canada (where leave to appeal was refused in
August 1992″) and are now again pending before the British Columbia Court
of Appeal on different grounds.

A. Testimony before the British Columbia Securities Commission

In chambers, the British Columbia Supreme Court justice seized of the
original petitions by Doman and the Bennetts challenging the B.C. Securities
Commission hearing heard fifteen days of argument and rendered a seventy-
five-page decision. As the British Columbia Court of Appeal noted on appeal
from this decision in July 1992, “some of the issues have more merit than oth-
ers. And some might better be left to be raised with the Commission during the
hearing, or raised upon a review of the final decision of the Commission if the
decision is brought forward for review.” 5 The Court dismissed the challenges,
clearing the way for an administrative hearing to be held.

On January 11, 1993, some four years after the initial investigation had
been started, the hearing of the British Columbia Securities Commission finally
began. Two weeks of “legal wrangling” 6 preceded presentation of the Commis-

“The British Columbia Securities Commission also imposed a freeze order on funds in British
Columbia (which remained in place for nearly 3 years) and issued a temporary cease trade order.
‘2R.S.B.C. 1979, c. 305.
I3R.S.O. 1980, c. 400, now R.S.O. 1990, c. P.33.
‘4Supra note 1.
15Bennett v. B.C.(S.C.) (C.A.), supra note 1 at 178.
16″Hearing Starts on Doman, Bennett” The [Toronto] Globe and Mail (27 January 1993) B5.

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sion case. Lawyers for the Bennetts and Herb Doman indicated that they
planned “to continue exploring legal avenues to derail the hearing.”‘ 7 A few
days later they were successful. On February 2, 1993 the British Columbia
Court of Appeal again stayed the hearing pending a challenge to the panel on
the basis of bias.'” In granting leave to appeal and staying the Commission hear-
ing, Justice Lambert said that it would not be in the public interest to continue
the hearing before the appeal was heard. “He said that proceeding now could
cause a grave injustice to the three men. They might be called as witnesses, their
credibility might be challenged and their reputations hanned.” 9

Here is the nub of the matter. In the Provincial Court criminal proceedings,
the Bennetts and Herb Doman refused to testify and could not be compelled to
give testimony. The essence of the offences of tipping and insider trading is the
conveyance and use, respectively, of material non-public information affecting
the value of the securities traded. In the absence of their own testimony, the case
against the Bennetts and Doman was entirely circumstantial, based primarily on
telephone and trading records. Only Herb Doman could say, “I called Russell
Bennett at 10:09 a.m. and told him the deal was off.” Only Russell Bennett
could say, “I got the call from Herb Doman, immediately told my brother Wil-
liam and gave instructions to my broker to unload my holding.”

The Provincial Court judge refused to make the inference from the evi-
dence that such statements were made.20 In light of the testimony provided,
Craig J. found that “there is at least a reasonable doubt that [Doman] made the
call and, in my mind, an equally consistent reasonable inference, on the proven
facts, that he did not tip off either Bennett.”‘” Although telephone records indi-
cated that a call was made at 10:09 a.m. on November 4 from Doman’s offices
to Russell Bennett’s offices, there was no direct evidence as to who made the
call and what was discussed: 22

The Crown has failed to prove beyond a reasonable doubt that Russell Bennett
sold his DIL shares as a result of Herb Doman giving him insider information. I
am satisfied on a preponderance of probabilities that he made the decision to sell
his shares and instructed his broker to do so before he could possibly have
received any alleged tip.2 3

17Ibid.
I’As of August, 1993, it was expected that the appeal would be heard in the fall of 1993, accord-

ing to staff at the B.C. Securities Commission.

19″Bennetts, Doman Can Appeal Hearing,” supra note 2.
20R. v. Bennett (B.C. Prov. Ct.), supra note I at 57-58:

The prosecution said its case against Herb Doman was entirely circumstantial. It did
produce evidence which, if viewed in isolation and in the chronology of [LP’s] call to
Herb Doman, followed by the unidentified call from DIL to the Bennetts’ offices and
the sale of their shares soon after, would probably cause me to conclude that the only
reasonable inference is that Herb Doman made the call, tipped the Bennetts off, and
on that tip they sold their shares.

2’Ibid. at 58.
22″It would be speculation at best and cynicism at least to infer that Doman immediately placed
the call to [Russell Bennett’s offices]. To speculate on Doman’s activities between 10:07 and 10:14
a.m. on November 4, 1988, and give only a sinister connotation to such speculation would lead
to a conviction based on suspicion” (ibid.).

231bid. at 56-57.

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Faced with the findings of fact of the trial judge, the Crown did not appeal.

This was not, however, the end of the matter for Herb Doman and the Ben-
netts. The B.C. Securities Commission had made it known to them before crim-
inal proceedings had formally been initiated that an administrative hearing
would be conducted.24 Unlike the criminal proceedings, Doman and the Ben-
netts may be compelled to give testimony at the Commission hearing. 5 It is this
hearing which they have resisted so strenuously, and to date, so successfully. It
is at this hearing that counsel for the B.C. Securities Commission has said that
he

expects Mr. Doman will admit he called Russell Bennett on the morning of Nov.
4, 1988. But instead of admitting that he told [Mr. Bennett] that the Louisiana-
Pacific takeover would not proceed –
a fact that had just cost him approximately
$65-million and for which he was very disappointed – we expect him to say that
he chose instead to talk … only about the fact that he received a cheque of $500
for a horse instead of a cheque for $5,000.27

B. Testimony befoje the Ontario Securities Commission

The issues arising in the Ontario courts with respect to an administrative
hearing by the Ontario Securities Commission were very different. The applica-
tion before the Ontario High Court in February 1990 was for two orders, one
appointing a commissioner for the purpose of taking evidence from Herb
Doman and the Bennetts in British Columbia for use at an Ontario Securities
Commission hearing in Ontario, and the other requesting the proper judicial
authorities in British Columbia to issue the necessary process to compel the
respondents to attend for examination before the commissioner.

Doman and the Bennetts had voluntarily given evidence in British Colum-
bia during the course of the investigation conducted under section 11 of the
OSA.28 The Commission was of the view that the evidence so gathered provided
grounds for a hearing under then section 124 of the OSA. The Commission
issued summonses to Doman and the Bennetts to attend and give evidence at a
hearing to be held in Ontario. The respondents refused to attend.

The Ontario High Court refused to give assistance to the Ontario Securities
Commission on very narrow grounds. Although the OSA specifically provides
for the power of the Commission to issue summonses for purposes of conduct-
ing an investigation, there is no specific power granted for purposes of a section
124 hearing.29 Such a power is specifically granted to the Commission under the
Statutory Powers Procedure Act.3″ “It is a broad power but no express mention

24See Bennett v. B.C.(S.C.) (S.C.), supra note 1 at 175.
25″Hearing Starts on Doman, Bennett,” supra note 16 at B5: “Marvin Storrow, representing Mr.
Doman, indicated that he and his colleagues intend to challenge the superintendent’s right to com-
pel the Bennetts and Mr. Doman to testify.”

26Technically, the B.C. Superintendent of Brokers.
27″Hearing Starts on Doman, Bennett,” supra note 16 at B5.
28See Ont. (S.C.) v. Bennett (H.C.J.), supra note 1 at 78.
29Now R.S.O. 1990, c. S.5, s. 128.
3R.S.O.’1980, c. 484, now R.S.O. 1990, c. S.22.

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of a territorial limit is made in relation thereto. … [Tjhere are no reported deci-
sions on the point in issue.”‘” The Court was of the opinion that since the Stat-
utory Powers Procedure Act was “silent outside Ontario,”32 there was no statu-
tory basis upon which the order could be granted. The Court also found that it
had no inherent jurisdiction to assist an Ontario administrative tribunal outside
Ontario: “If the legislature had intended that the court should assist administra-
tive tribunals outside of Ontario, it would have said so.”33

On appeal to the Ontario Court of Appeal a year later, the Court agreed
with the trial judge. “In the absence of any statutory authorization to this effect,
we agree with Steele J. that the court’s inherent jurisdiction does not extend to
granting assistance to an Ontario administrative tribunal outside the province
and cannot be invoked for this purpose.”‘3 The Court, in a single paragraph dis-
missal of the request by the Commission, referred specifically to the fact that
legislation in other provinces did contain statutory provisions empowering the
Commission to issue summonses outside of the province or to apply to the court
for a commission for the obtaining of evidence from a witness outside the prov-
ince.

It is easy to imagine that the Ontario Securities Commission would have
been surprised at the result. Certainly, the Commission had felt justified in
appealing the decision of the trial court. These decisions of the Ontario courts
effectively hamstrung the Ontario Securities Commission; on narrow and quite
arguable procedural grounds, the Commission was prevented from proceeding
to a hearing concerning possible insider trading over The Toronto Stock
Exchange. Two and a half years later, statutory amendments which specifically
address the findings in these decisions have been proposed by the Ontario Secu-
rities Commission but have not yet reached bill form.35

310nt. (S.C.) v. Bennett (H.C.J.), supra note 1 at 79.
321bid. at 81.
33Ibid.
340nt. (S.C.) v. Bennett (Ont. C.A.), supra note 1.
35An Ontario Securities Commission staff member has indicated that as of August 1993, the pro-

posed amendments read as follows:

154(1) Application For Letters of Request: The Commission may apply to the Ontario

Court (General Division) for an order
(a) appointing a person to take the evidence of a witness outside of Ontario for

use in proceedings before the Commission; and

(b) for a letter of request directed to the judicial authorities of the jurisdiction
in which the witness is to be found, requesting the issuance of such process
as is necessary to compel the person to attend before the person appointed
pursuant to clause (a) to give testimony on oath or otherwise and to prod-
uce documents and things relevant to the subject matter of the proceedings.
(2) Practice and Procedure: The practice and procedure in connection with an
appointment under this section, the taking of evidence and the certifying and
return thereof shall, as far as possible, be the same as those that govern like
matters in civil proceedings in the Ontario Court (General Division).

(3) Reciprocal Assistance: Where it is made to appear to the Ontario Court (Gen-
eral Division) that a court or tribunal of competent jurisdiction outside of
Ontario has, on behalf of a securities commission or other body empowered by
statute to administer or regulate trading in securities, duly authorized, by Corn-

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I. The Lessons to be Learned from the Bennett Proceedings

Writing on the Bennett matter in November 1992, Ed Morgan, a Toronto
practitioner, and Professor Daniels of the University of Toronto adopted a pro-
vocative stance: who cares about insider trading?” “[A]lmost everyone” accord-
ing to The Economist.37 Despite the debate over the ills and merits of insider
trading,” “the emerging global consensus favors punishing such activity
because it undermines the integrity of the marketplace and threatens the mar-
ket’s efficiency.”39 Given this emerging global consensus, here is a matter which
Canadian regulators must confront.

The Bennett matter, however, raises issues that go beyond whether we
should care if Bill Bennett made a cool million on a hot tip. It is indicative of
a more widespread crisis in the Canadian regulatory regime governing securities
and financial markets. It is now patently obvious (as it has been for many
years4 ) that securities regulation, in fact, is not a local matter. The constitutional
underpinnings of our provincial legislation are simply not adequate to deal with
the markets and are responsible for the multiplicity of proceedings afflicting
Herb Doman and the Bennetts. Exacerbating this long-standing difficulty has
been the more recent breakdown of the mechanisms that had been cobbled

mission, order or other process, the obtaining of the testimony of a witness out-
side of the jurisdiction thereof and within the jurisdiction of the Ontario Court
(General Division) for use at a proceeding before that securities commission or
other body empowered by statute to administer or regulate trading in securities,
the Ontario Court (General Division) may order the examination of such wit-
ness before the person appointed in the manner and form directed by the Com-
mission, order or other process, and may, by the same or by subsequent order,
command the attendance of the witness for the purpose of being examined, or
the production of a writing or other document or thing mentioned in the order,
and may give all such directions as to the time and place of the examination
and all other matters connected therewith as seem proper, and the order may
be enforced and any disobedience thereto punished, in like manner as in the
case of an order made by the Ontario Court (General Division) in an action
pending in such court.

36R. Daniels & E. Morgan, “Is It Worth It to Ban Insider Trading?” The Financial Post (18
November 92) 9: “Indeed, the strenuous pursuit of such a high-profile target as Bill Bennett with
only sporadic results raises a further question: why does the B.C. Securities Commission, or for
that matter anyone else in Canada, care about insider trading?”

i.e., better-informed people –

37 “Inside Out” The Economist (22 May 1993) 86.
38The argument in favour of permitting insider trading, an essentially economic one based on
market efficiency theories, was recently summarized in The Economist, ibid.: “Allowing insiders
–
to profit from trading means that share prices reflect information
more quickly. This can make markets more efficient, and lets investors spend less time and money
searching for information.” See also M. Gillen, “Sanctions Against Insider Trading: A Proposal for
Reform” (1991) 70 Can. Bar Rev. 215 at 217ff.

39C.V. Baltic, III, “The Next Step in Insider Trading Regulation: International Cooperative

Efforts in the Global Securities Market” (1991-92) 23 L. & Pol’y in Int’l Bus. 167 at 182.

40See generally P. Anisman & P.W. Hogg, “Constitutional Aspects of Federal Securities Legis-
lation” in Proposals for a Securities Market Law for Canada, vol. 3 (Ottawa: Consumer and Cor-
porate Affairs Canada, 1979).

4See generally P. Anisman & P.W. Hogg, “Constitutional Aspects of Federal Securities Legis-
lation” in Proposals for a Securities Market Law for Canada, vol. 3 (Ottawa: Consumer and Cor-
porate Affairs Canada, 1979).

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together to deal with it, various means of “informal” enforcement and cooper-
ation coupled with benign neglect on the part of the legislatures and deference
on the part of the courts.

A. A Legacy of Legislative Abdication

It has been a precarious balancing act, and one which is increasingly hard
to maintain. As Anisman and Hogg noted over fifteen years ago, the provincial
securities power has flourished in the absence of, some would say much needed,
federal legislation.4 The federal government is not alone, however, in bearing
the responsibility for legislative abdication in the area of securities regulation.
As Professor Janisch points out in his excellent article in the Law Society of
Upper Canada Special Lectures for 1989, the Ontario Securities Commission
has been left to its own resources, most notably its “public interest” power, in
the absence of a clear legislative mandate.42 Viewing the state of securities reg-
ulation in Canada with the untrammelled vision of an administrative lawyer,
Professor Janisch is no less than astounded at the way in which the markets have
been supervised.43

The Ontario Securities Commission, overseeing the most important capital
market in Canada (and a market which is important internationally out of all
proportion to Canada’s economic importance), has been forced, because securi-
ties matters cannot make it to the top of the legislative agenda, to resort to a
patchwork of strategies of questionable legality. It has, for example, amended
statutory provisions through regulatory enactment.” Even the use of the regu-
latory power is exceptional. Virtually every significant development in the last
ten years has been dealt with by way of “policy statement,” specifically stated,
in yet another policy statement, to be of no binding legal effect.4″

411bid. at 145.
42H.N. Janisch, “Reregulating the Regulator: Administrative Structure of Securities Commis-
sions and Ministerial Responsibility” [1989] Special Lectures of the Law Society of Upper Canada

97.43″[T]he most excrutiatingly refined doctrine in securities law must conform to the basic tenets

of our legal system” (ibid.).

“The $97,000 private placement exemption of s. 72(1)(d) OSA is increased to $150,000 by ss.

23 and 25 of Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015.

45 The O.S.C. Policy Statements do not have the force of law and are not intended to have
such effect. They are, however, intended to set forth certain basic policies of the Com-
mission relating to securities regulation in the Province of Ontario and the role of the
Commission with respect thereto and accordingly the Commission expects issuers to
comply with the O.S.C. Policy Statements unless compliance is waived (O.S.C. Policy
Statement 1.1, “O.S.C. Policy Statements – General”).

Policy Statements have recently been dealt a near fatal blow by the Ontario Court (General Divi-
sion) in the so-called “Penny Stock” case. Speaking of O.S.C. Policy Statement 1.10, Blair J.
stated: “This is regulation of the conduct of those engaging in the business of trading in penny
stocks. Whatever the desirability of such regulation may be, the O.S.C. simply does not have the
statutory mandate to regulate in such a fashion” (Ainsley Financial Corp. v. Ontario (Securities
Conmission), [1993] O.J. No. 1830 (QL), File No. 92-CQ-26469 (13 August 1993), [para. 47]).
The decision has been appealed. See O.S.C. Press Release, “Re: Proposed O.S.C. Policy Statement
No. 1.10 – Appeal from Court Decision” (27 August 1993) (1993) 16 OSCB 4285. As this article

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B. Breakdown of Moral Suasion

Until recently, the moral suasion of the Commission has been so compel-
ling as to command compliance.46 Writing ten years ago in a report prepared
for the Ontario Securities Commission on the Extraterritorial Application of
the Securities Act by the Ontario Securities Commission,47 Michael Nicholas
estimated almost sixty-five per cent of the investigations conducted by the
Commission to be of an informal nature, undertaken without necessity of
recourse to the Commission’s coercive powers. Informal cooperation (as well
as more formal concerted efforts of the Canadian Securities Administrators,
embodied in National Policy Statements) has also been characteristic of the
interaction of Canada’s provincial regulators in the absence of a federal pres-
ence.

This informal cooperation, in an effort to preclude regulatory arbitrage,48
is evident in the contrapuntal nature of the proceedings in the Bennett matter49
as they shift back and forth between British Columbia and Ontario. Evident
too in the initial stages (the “joint investigation” by both Commissions) was
the informal nature of the proceedings. The Bennetts originally testified vol-
untarily at this stage. This fact alone speaks eloquently to the power of per-
suasion of the Commissions, a power to which they have become accus-
tomed.

To its surprise, however, the Ontario Securities Commission found that
once the Bennetts had thought better of their situation, the Commission was
no longer able to obtain testimony voluntarily; Doman and the Bennetts ref-
used to recognize the Ontario Securities Commission subpoene and the
Ontario courts refused assistance. This was likely a rude shock to the Com-
mission, but indicative of the limits of moral suasion and regulation by
informal means. It is also indicative of the fragmentation which is occurring
within the securities dealing community, where challenges to Commission
authority are becoming more frequent.” The Commissions no longer have the
carte blanche they once had. 2

was going to press, the Ontario government announced the formation of a task force to recommend
ways to ensure that the Ontario Securities Commission “has the power to fulfil its mandate” (The
Financial Post (8 October 1993) 17).

461bid.
47M. Nicholas, Extraterritorial Application of the Securities Act by the Ontario Securities Com-
48Filling the potential gaps that could be “exploited by the unscrupulous,” as Hogg and Anisman

mission, (Ontario Securities Commission, October 1993) [unpublished].

have put it. See supra note 40 at 145.

49See Appendix.
5Ont. (S.C.) v. Bennett (H.C.J.), supra note 1 at 78.
51See e.g. Jacques Forget’s successful defamation suit against the Quebec Securities Commis-
sion as reported in “Former Montreal Publisher Wins Suit against QSC” The [Toronto] Globe and
Mail (30 June 1993) B2.

52just ten years ago Peter Dey, then Chairman of the Ontario Securities Commission, stated that
the Commission was seldom challenged. Although he was speaking specifically with respect to
what he had characterized as the extraterritorial application of the OSA, his statement is likely
applicable in a broader context as well. See Law Institute of the Pacific Rim, Notices (Press
Releases Ch. 1, P.J. Dey, “Opening Statement for Panel on Extraterritorial Application of Securities
Laws” (Los Angeles, 21 October 1983) (1983) 6 O.S.C.B. 3481 at 3483.

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C. A Disappointing Judicial Response

Once the administrative authority of the Commissions is challenged, they
must look to the courts for assistance. As has been noted by commentators, tra-
ditionally the courts have demonstrated a reluctance to strike down provincial
securities legislation on constitutional grounds, given the absence of federal leg-
islation to fill the gaps.53 In the latest round of challenges to Commission author-
ity, however, the support of the judiciary has been anything but consistent.

There are several reasons for such lack of consistency. One is the notable
paucity of securities-related litigation in the courts. Since issues have been
resolved at the Commission level in the past, a significant body of case law to
which the courts could turn has not developed. Neither has the expertise of.the
judiciary;54 there is no court the equal in experience to the Southern District of
New York or the Delaware Chancery Division.

The courts, once seized of a matter, are in a difficult position. The long-
ignored inadequacy of the constitutional basis of the provincial securities law
power, local matters, “property and civil rights in the province,” has become a
glaring defect given the borderless nature of modern securities dealing. And leg-
islative neglect has been crippling. Securities regulation is an area which rivals
taxation in complexity and technicality. Legislatures, for obvious reasons, pay
close attention to their fiscal legislation, closing loopholes, amending legislation
yearly, producing statutes which resemble small telephone books.55

Not so with securities legislation. The self-interest of the legislature is not
invoked to nearly the same degree and the Commissions have been left to their
own devices to deal with the rather creaking apparatus of outdated and inade-
quate statutes.56 Thus the recourse to policy statements, both national and pro-
vincial, blanket orders and notices, all effective to the extent complied with, but
highly vulnerable before the courts.

The Ontario courts in the Bennett case (and the British Columbia courts in
the recent Pezim decisions57) have unfortunately given the Commissions little

53See e.g. Anisman & Hogg, supra note 40.
54See Janisch, supra note 42 at 104.
55By comparison, the OSA, in a recent commercial version, is a meagre 145 sections over 91
pages. Various policy statements in the same publication stretch over 530 pages. See Ontario Secu-
rities Act and Regulation, 21st ed. (Scarborough: Carswell, 1992).
561t is interesting to note here that Quebec, again, seems to be an exception. See generally
Janisch, supra note 42. A possible reason for this has been the competitive pressures felt in Quebec
to retain market share and to render its financial markets attractive and responsive.
57Pezim v. British Columbia (Securities Commission) (1992), 96 D.L.R. (4th) 137 (B.C.C.A.).
Leave to appeal has been granted and the case is pending before the Supreme Court of Canada.
In Pezim, the B.C. Court of Appeal very narrowly construed the B.C. Securities Act, drawing a fine
distinction between material change and material fact in the statute and ignoring National Policy
Statement 40, which eliminated this distinction by referring to “material information.” Commen-
tators have expressed disappointment with a result which is so contrary to the policy of the Act.
See V.J. O’Connor, “Pezim v. British Columbia (Superintendent of Brokers): Material Fact or
Material Change? A Distinction with a Difference” [March 1993] Business & The Law 21. The
decisinn was a

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assistance in dealing with their difficult position. Both the Ontario High Court
and the Court of Appeal abdicated in Bennett: They adopted an extremely nar-
row and technical reading of the statutes invoked, in effect turning their backs
on the Commission, and in’the view of this commentator, without sufficient
* consideration of the infirmities and policies of the statutes with which they were
dealing.

Despite the absence of reported decisions on the point and the broad pow-
ers of the Statutory Powers Procedure Act, the High Court refused assistance in
the absence of an “express power given to the court to assist a tribunal outside
Ontario.” ’58 The court found it had no “inherent jurisdiction.”

The High Court decision is arguable to the extent that the two cases relied
upon by the Court in its decision both dealt with applications by the U.S. Secu-
rities and Exchange Commission (“SEC”), a foreign agency, and interpretation
of a different statute, the Ontario Evidence Act.59 It is difficult to see how Steele
J. found himself “bound by the decision in McCarthy”‘
in the light of cases so
distinguishable. In addition, there were very different policy factors at work in
McCarthy and Becker. Rather than lending, assistance to an Ontario agency in
its cooperative efforts with another provincial agency (in fact, the only means
by which regulators in Canada can effect supervision of Canadian domestic
securities markets), the courts in the McCarthy and Becker cases were dealing
with the exercise of what could be seen as exorbitant jurisdiction by a foreign
agency, the SEC.61

The decision of the Ontario Court of Appeal is even more disappointing.
The appeal of the Ontario Securities Commission was dismissed in an oral
endorsement.62 The Court stated that the powers of the Commission were gov-
erned by “the comprehensive statutory scheme set forth in the Securities Act,
R.S.O. 1980, c. 466. “63 The OSA is far from a comprehensive statutory
scheme;n.it is not the Income Tax Act and, as noted earlier, does not benefit

departure from the historical reluctance of the courts to interfere with the determination
of a specialized body such as a securities commission … However, from a policy per-
spective, the public interest is not well served by such a narrow interpretation, partic-
ularly when dealing with something as significant as the flow of information to inves-
tors. It is regrettable that the matter had to be heard by the Court of Appeal in any event
(ibid. at 23, 24).

580nt. (S.C.) v. Bennett (H.C.J.), supra note 1 at 81.
59McCarthy v. United States Securities and Exchange Commission, [1963] 2 O.R. 154, 38
D.L.R. (2d) 660 (C.A.) [hereinafter McCarthy]; Re A.G. Becker Inc. (1984), 45 C.P.C. 163 (Ont.
H.C.J.) [hereinafter Becker].

6Ont. (S.C.) v. Bennett (H.C.J.), supra note 1 at 81.
61The SEC has to an impressive degree mended its ways in the last few years by formally
adopting, for certain purposes, a territorial approach to the exercise of its jurisdiction. See Regu-
lation S: Rules Governing Offers and Sales Made outside the United States without Registration
under the Securities Act of 1933. 55:85 F.R. 18322 (2 May 1990).

620nt. (S.C.) v. Bennett (C.A.), supra note 1 at 576.
631Jbid.
64The court did seem most impressed by the fact that legislation in other provinces contained
provisions empowering their commissions to issue summonses outside of the province and to apply
to the court for a commission for the obtaining of evidence from a witness outside the province

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from the legislative attention which the Income Tax Act receives. The OSA is
replete with lacune that, of necessity, have been supplemented by administra-
tive action.

The Ontario Court of Appeal decision is doubly disappointing to the extent
that the procedural means invoked by the Commission avoided the traditional
constitutional infirmity of Canadian securities legislation, provincial legislation
purporting to act with extraterritorial effect. The Commission, for example, was
not seeking to enforce provincial securities legislation empowering the Com-
mission to issue summonses outside of the province, legislation that constitu-
tionally would be highly susceptible of challenge. The Commission was not a
foreign tribunal seeking to enforce either directly its own subpoena power or a
request for assistance of its own domestic court as was the case in McCarthy
and Becker. The Commission was requesting an order of an Ontario court
requesting the proper judicial authorities in British Columbia to issue the nec-
essary process there to compel British Columbia residents to attend for exam-
ination before the Commission for the purpose of taking evidence. The means
chosen by the Commission seemed above reproach.

It is not disputed that the trades in question took place over The Toronto
Stock Exchange (the principal market with which the Commission is charged
with oversight) and in securities of an issuer reporting to the Ontario Securities
Commission. Accepting the traditional justification for Commission involve-
ment at all in allegations of insider trading, protection of the integrity of its cap-
ital markets, Ontario is arguably the jurisdiction which has the greatest interest
in pursuing the Bennett matter. The physical presence of Doman and the Ben-
netts in British Columbia is quite fortuitous. On these facts and assumptions,
there is not even the “extrajurisdictional” argument to muddy the waters of the
substantive jurisdiction of the Ontario Securities Commission.’ In the absence

(ibid.). The B.C. Securities Commission, however, has had little success in invoking the assistance
of the British Columbia courts under s. 154.3(1) of the B.C. Securities Amendment Act, 1992,
S.B.C. 1992, c. 52, B.C. Reg. 289/92, dealing with extrajurisdictional evidence. S. 154.3 came into
force 24 July 1992 and states:

Where it appears to the Supreme Court, on an application made by the commission,
that a person outside of the Province may have evidence that may be relevant to an
investigation ordered by the commission under section 126, the Supreme Court may
issue a letter of request directed to the judicial authority of the jurisdiction in which
the person to be examined is believed to be located.

The B.C. Commission in a petition filed 25 November 1992 sought letters of request with
respect to an Ontario resident in connection with the Bennett administrative hearing. As counsel
for the commission indicated in their petition, a commission investigation order dated 18 April
1989 under s. 126 remained in effect. The petition was denied, Finlay J. stating: “In my view,
although there may still be an ongoing investigation as ordered by The Commission under s. 126.
The real purpose of this petition is not to advance that investigation but to prepare evidence by way
of deposition to be tendered to The Commission [sic].” See British Columbia (Securities Commis-
sion) v. Jerome Lapointe as Manager of the Canadian Broadcasting Corporation Pension Plan (18
December 1992), Victoria 923955 (B.C.S.C.). The decision has been appealed: B.C. Securities
Commission v, Jerome Lapointe as Manager of the Canadian Broadcasting Corporation Pension
Plan, Victoria V01810, filed 13 April 1993.
65rhis argument has been invoked on other occasions but parried by the Commission. See Dey,
supra note 52 at 3486. In fact, although not formally recognized in Canada, long implicit in the

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of a federal securities commission, to have made available the process of the
Ontario and British Columbia courts would have been a step in the right direc-
tion.’ It would have provided a means of coordinating at the judicial level
efforts at coordination already well developed at the administrative level.

In an era where securities authorities around the world are entering into
administrative understandings67 and engaging in cooperative efforts to provide
effective market surveillance for activity that transcends national borders, it is
particularly anomalous that the Ontario Securities Commission cannot invoke
the process of its own courts in aid of supervision of its own markets. There is
considerable irony as well in the fact that the SEC, on the facts of Becker and
McCarthy, would now invoke the assistance of the Ontario Securities Commis-
sion directly, bypassing the Ontario courts, on the strength of the administrative
understanding for mutual assistance entered into between the two agencies.”

D. Multiplicity of Proceedings

Finally, there is the issue of multiplicity of proceedings. Multiplicity of
proceedings constituting an abuse of process was argued by Doman and the

pronouncements of the Ontario Securities Commission has been the adoption of the U.S. conduct
and effects doctrine. See e.g. Nicholas, supra note 47 at note 118 and accompanying text [no page
number reference in original text]:

[I]t is submitted that many of the [Ontario Securities] Commission’s policies and deci-
sions expressed as being in the public interest, or for the purpose of protecting the mar-
ket integrity of Ontario’s capital markets, are better understood if also considered as
applications of the impact or effects doctrine or the conduct doctrine of the United
States. It is further submitted that such considerations should govern the extraterritorial
application of the Act by the Commission and that such application should be premised
on a substantial effect within the province, as a result of conduct outside the province,
or substantive conduct within Ontario which has a detrimental effect or impact felt out-
side the province.

The issue of extraterritorial application of the OSA was also raised and laid to rest by the Ontario

Court of Appeal in the recent “Asbestos” case:

What is in issue in this case is the application within Ontario of legislative sanctions
against the appellant as a result of transactions entered into by the appellant which
allegedly had a damaging effect on the interests of shareholders resident in Ontario. ….
As stated above, the simple legislative objective involved in this appeal is regulation
of the operation of capital markets in Ontario for the benefit of all who use them …
It can hardly be considered fair and reasonable to suggest that only Ontario residents
are subject to Ontario regulatory rules when operating in Ontario capital markets.

Re The Securities Act, R.S.O. 1980, c. 466, as amended (1992), 58 O.A.C. 277 at 283, 287, 288,
McKinlay J.A. (indexed as Re Asbestos Corp, Societe de I’Amiante and Quebec (Province)). Leave
to appeal to the S.C.C. refused (27 May 1993), 23356.
66The Ontario High Court noted that it was “likely that if this court granted the application and
issued an order requesting the assistance, the British Columbia court would do so without looking
behind the order” (Ont. (S.C.) v. Bennett, supra note 1 at 81).

67There are now at least a dozen Memoranda of Understanding (MOUs) between various secu-
rities regulators. “MOUs are non-binding statements of intent between like-minded regulators, pro-
viding for exchanges of information and mutual cooperation on a bilateral basis” (Baltic, supra
note 39 at 191).
68Memorandum of Understanding between the United States Securities and Exchange Commis-
sion and the Ontario Securities Commission, the Commission des valeurs mobilires du Quebec
and the British Columbia Securities Commission, 11 O.S.C.B. 114 (7 January 1988).

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Bennetts before the British Columbia Court of Appeal in their initial efforts to
prevent an administrative hearing before the B.C.- Securities Commission.69 The
argument, dismissed by the Court of Appeal, highlights the fact that there are
a multiplicity of proceedings which may be taken in conjunction with allega-
tions of insider trading. The fact that more and more frequently several jurisdic-
tions may b& involved, each with their own remedies, adds to the complexity of
insider trading allegations. Ed Morgan and Professor Daniels attribute this mul-
tiplicity of actions to the “fact that neither the courts nor any of the provincial
securities commissions has a coherent theory of what drives our insider trading
laws.”7 0

Rather than incoherence, insider trading regulation may simply be trying
to do too much, and thus failing to do much of anything. The primary goals are
often stated to be deterrence and compensation, deterrence being promoted by
criminal sanctions and compensation by civil liability. Both sanctions have been
notable failures. While there has been a considerable amount of commentary on
the criminal and civil liability sanctions,7 little has been said about what may
be emerging as the truly significant sanction for insider trading, the administra-
tive hearing.

It is the administrative hearing by the B.C. Securities Commission which

has become the focus of the Bennett affair.

1.

Criminal Sanction

“It has been called the victimless crime. Some question whether it is a
crime at all.”’72 The difficulties with the criminal sanction for insider trading
have been examined at length,73 beginning with this very fundamental question.
Characterization of the activity as a form of fraud on the market is the usual jus-
tification for the creation of the criminal offence.

Traditionally, both detection and enforcement have been difficult. How-
ever, detection, at least of the indicators of possible insider trading, is getting
easier with the rapid technological changes in the markets. Regulators now look
to trading volume, size, direction and number of trades,74 all of which can be
tracked virtually instantaneously. The investigation of the Bennett matter, for
example, began in a matter of days after the trades took place over The Toronto
Stock Exchange.

A suspicion of insider trading is one thing; a criminal conviction is quite
another. The Bennett affair is an archetypal example of the difficulties encoun-

69Bennett v. B.C.(S.C.) (C.A.), supra note I at 182.
70Supra note 36 at 9.
71See R.L. Simmonds, “Penal Liability for Insider Trading in Canada: Commission des valeurs
mnobilieres du Qu’bec v. Blaikie” (1988) 14 C.B.LJ. 477; Gillen, supra note 38; P. Anisman,
Insider Trading Legislation for Australia: An Outline of the Issues and Alternatives (Canberra:
Australian Govt. Publications, 1986).

72″Balancing Act” The Economist (22 May 1993) 84.
73See e.g. Gillen, supra note 38.
74See “Inside Out,” supra note 37 at 86.

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tered in a criminal prosecution of insider trading; in the absence of testimony
by the accused, all the evidence was circumstantial and the prosecution was
unable to meet the burden of proof, beyond a reasonable doubt The high pro-
file prosecutions in the United States in recent years almost invariably involved
an ongoing scheme or pattern of insider trading; in these circumstances direct
evidence was made available, testimony resulting from plea bargaining or legal
electronic surveillance, evidence which is virtually impossible to obtain with
respect to a suspected isolated incident.

A further difficulty is the prosecution of insider trading as a provincial
offence, a considerable limitation on its effectiveness. In the United States,
which has led the way in insider trading prosecutions, there is real justification
for prosecution of insider trading at the agency level, by the SEC under its anti-
fraud power. There is no federal criminal law power in the United States and
the SEC, as a federal agency, provides consistent enforcement throughout the
United States. The situation is quite the opposite in Canada with our federal
criminal law power and our securities agencies operating at the provincial
level.

If a criminal sanction is to be retained for insider trading,76 on the basis of
its deterrent function (or otherwise), perhaps real criminalization in Canada
should’be considered. Arguably, a Criminal Code offence (if vigorously prose-
cuted) would provide even greater deterrent force than the existing quasi-
criminal provincial offences. As a bonus, Criminal Code offences would be
enforceable throughout Canada, with less likelihood of constitutional challenge.
There exist already “fraud on the market” offences in the Criminal Code.7
Politically, however, this suggestion may be impractical; the Federal govern-
ment has let the Proposals for a Securities Market Law for Canada7 languish

75Gillen provides a good discussion of the type of difficulties encountered in the Bennett matter
with respect to the use of the criminal sanction. See Gillen, supra note 38 at 219-30. See also Sim-
monds, supra note 71 at 493:.

There are severe limitations in enforcing norms like those against insider trading
through criminal process. … There is good reason to think that the insider trading stand-
ard is neither as well understood nor as deeply felt by the business community as say
the standards that oppose theft or fraudulent misstatement, perhaps because the norm
seems concerned with unfairness rather than the taking of property. In that context,
cases are more likely to end in a series of technical conclusions, rather than ringing nor-
mative pronouncements …

76rhe use of criminal sanctions for insider trading is far from a dead letter. The European Com-
munity in its recent Directive on Insider Trading requires all member countries to adopt legislation
imposing penalties “sufficient to promote compliance.” See Council Directive 89/592 9 f 13
November 19.89 Coordinating Regulations on Insider Dealing, O.J. (1989) No L334 at 30, art. 13,
at 32. See Baltic, supra note 39 at 192-96. Germany and Britain are the only EC countries which
have not implemented the directive in its entirety. See “Balancing Act,” supra note 72 at 86.

77 “Securities related [Criminal] Code offences include the indictable offences of deceit or fraud,
using the mails to defraud, fraudulent manipulation of stock exchange transactions, gaming in
stocks, short sales against margin accounts and the making, publication or circulation of a fraud-
ulent prospectus” (Nicholas, supra note 47 at note 63 and accompanying text [no page number in
original text]). See R.S.C. 1985, c. C-46, ss. 384, 400. See also OSA, supra note 3, s. 11 with
respect to the Ontario Securities Commission’s investigation powers for Criminal Code offences.

7 8Supra note 40.

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for fifteen years now. As it stands, the criminal sanction for insider trading is
largely symbolic.79

2.

Civil Liability

An action for civil liability is the one ingredient, which at first glance,
seems to be missing in the Bennett affair.8″ This is not surprising. “The victims
of insider trading will rarely choose to bring the civil actions provided for in the
Securities Acts.”‘” As critics of this remedy are not shy to point out, problems
of detection and enforcement, while differing from those associated with the
criminal sanction, are no less and perhaps more daunting in civil actions.82

In the United States, civil liability serves to a much greater extent both a
deterrent and compensatory function. If civil liability is to be taken seriously in
Canada, consideration should be given to lifting a few leaves from the U.S.
book. For example, continuous disclosure rules in the United States catch a
much broader range of companies, triggering insider reporting obligations
which can serve as a basis for establishing liability. 3

In addition, section 16(b) liability, the so-called “short-swing profit” rule’
(which has no counterpart in Canada) is highly effective in overcoming the dif-

79See e.g. Simmonds, supra note 71 at 493-94:

If the norms against insider trading are in this state, then the most urgent task facing
the securities commissions is to better implant in the public trading markets an ethic
against insider trading that tracks the legislative standard. If that is the most urgent task,
then penal actions should be brought only in the most egregious cases. The commis-
sions’ energies should be going into ensuring the securities industry, reporting issuers,
and the legal and accounting professions fully share the commissions’ disfavour of the
prescribed behaviour and express that in their co-operation in the development of strat-
egies to reduce it.
That is, the enforcement of insider trading norms requires that those norms be better
internalized in our markets. The commissions, not the courts, are the institution to do
it.

8There were in fact two civil actions commenced in Ontario and one in British Columbia: Trust-
ees of the Canadian Broadcasting Pension Plan v. Bennett (1 May 1989), Toronto 37340/89 (Ont.
S.C.); First Marathon Securities Ltd. v. Bennett (2 May 1989), Toronto 37378/89 (Ont. S.C.); Har-
trikson v. Bennett (7 June 1989), Vancouver C892956 (B.C.S.C.). All actions were quickly settled.
The claim in the action by the CBC Pension Fund was for an amount in damages of $2,500,000.
Details of the settlement are not in the public record. The rise in importance of the institutional
investor, well-endowed and ready to act to protect its interests, may breathe new life into an old
remedy. Two of the three civil actions in Bennett were taken by institutional investors, a pension
fund and a brokerage house.

81Gillen, supra note 38 at 232.
12Gillen, ibid. at 233, summarizes these problems as: the detection of the identity of the insider
trader, establishing whether the victim actually traded with the person who had inside information
and, despite the lower burden of proof, the high cost of proving the case.

3Companies which have never made a public offering of securities in the United States or listed
securities on a U.S. stock exchange may nonetheless be subject to continuous disclosure and
insider reporting obligations where the number of their equity securities holders exceeds 500. See
12(g) of the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq. (1988). Although the com-
pany has not voluntarily entered the public markets, the SEC considers the number of shareholders
to be significant enough to require information to be made public on a continuous basis. There is
no comparable provision under Canadian securities statutes.

84See ibid., 16(b).

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ficulties of proof associated with a civil action. The short-swing profit rule, in
fact, deems certain trades by a limited group of insiders to have been made on
the basis of inside information. A director, officer or ten per cent beneficial
ecuity owner trades at his or her peril; any purchase that can be matched against
a sale at a higher price within a six-month period gives rise to liability for the
“profit.””s Certainly, there are drawbacks to the use of the short-swing profit
rule, most notably that the profits “shall inure to and be recoverable by the
issuer.” A shareholder may act on behalf of the issuer but the action is derivative
in nature and only indirectly compensatory to shareholders who may have
traded. Nevertheless, an improvement on the current state of affairs in Canada.
The tendency in Canada towards the greater availability of class actions86
and contingency fees will obviously increase the likelihood of the instigation of
civil suits, as will the emergence of a more militant breed of Canadian share-
holder.8 7 For those fearful of a proliferation of U.S.-style frivolous litigation,
some comfort is offered by a recent study indicating that insider trading suits
monetarily worth pursuing are the exception. 8 For the moment, however, the
civil suit for insider trading in Canada is of limited utility.89

3.

Administrative Sanction

Here is the heart of the Bennett afftir, administrative sanction by the secu-
rities commissions. Of the several sanctions possible pursuant to a commis-
sion hearing (including in British Columbia removal from corporate director-
ships”0), the power to deny trading privileges in the market has emerged as the
most effective.91 The use of this particular sanction is a fairly recent develop-

85 16(b), ibid., provides:

For the purpose of preventing the unfair use of information which may have been
obtained by such beneficial owner, director, or officer by reason of his relationship to
the issuer, any profit realized by him from any purchase and sale, or any sale and pur-
chase, of any equity security … within any period of less than six months … shall inure
to and be recoverable by the issuer. … Suit to recover such profit may be instituted …
by the issuer, or by the owner of any security of the issuer in the name and in behalf
of the issuer ….

86See e.g.- new legislation in Ontario: Class Proceedings Act, 1992, S.O. 1992, c. 6.
7Irplausible as this may seem, there are some indications of this occurring in the wake of the
Royal Trust fiasco. See e.g. “Shareholders Speak Out: ‘You Have Brought This Company to Its
Knees”‘ The [Toronto] Globe and Mail (19 June 1993) B1.

88L. Meulbroek, “An Empirical Analysis of Illegal Insider Trading,” (December 1992) J. of Fin.,
as referred to in The Economist, “Inside Out,” supra note 37: “Despite the sensational headlines
about the millions of dollars earned by Ivan Boesky, Dennis Levine et al, these cases were excep-
tional. The median insider-dealer made a profit of just $25,000, calculates Miss Meulbroek.”

89Gillen proposes the creation of a compensation fund and civil actions taken by the commis-

sions to recover damages on behalf of “victims.” See Gillen, supra note 38 at 240-42.

90See Securities Act, S.B.C. 1985, c. 83,,s. 144(l)(d), as am. by S.B.C. 1989, c. 78, s. 39.
91See Dey, supra note 52 at 3484:

The most effective remedy for the Commission is the power to deny persons or com-
panies access t6 the Ontario capital markets. This remedy is more effective, because
it can be aimed directly at the persons or companies of concern to the Commission. The
power is effective if these persons or companies have an “Ontario market dependency”
– which simply means that they require access to the Ontario capital markets in order
to finance their businesses. In this respect, Ontario has an advantage, because The

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ment, 92 but one that is particularly suited to insider trading offences. The other
possible administrative sanctions, suspension of registration and cease trading
orders, are directed to market intermediaries (broker-dealers) and reporting issu-
ers, respectively.

The use of the restriction on market access is significant in two respects.
To a certain extent, it overcomes the territorial limitations inherent in a commis-
sion’s enforcement powers (particularly acute in the Canadian context of pro-
vincial regulation of securities matters),93 provided, of course, that a commis-
sion has the opportunity to make a case.94 It neatly sidesteps the ongoing debate
over extraterritoriality and implicity adopts the U.S. effects doctrine.95

Secondly, and perhaps more significantly, its use indicates a shift in focus
from issues of individual deterrence and compensation to issues of market
integrity. This is the “public interest” which Ed Morgan and Professor Daniels
wonder about.96 Tolerance of insider trading and questions of market integrity
have become very closely linked in the rapid growth of international securities
markets. Jurisdictions which have traditionally tolerated insider trading (most
notably, in the developed markets, Japan and continental European countries)

Toronto Stock Exchange provides the most liquid market in Canada for equity securi-
ties and Toronto is generally regarded as the capital for securities markets in Canada.

92According to Baillie and Alboini, denial of trading privileges in an insider trading case was

first used in 1976:

There can be no reasonable quarrel with the general statement that the O.S.C. may
appropriately deny trading privileges to persons who have engaged in improper activ-
ities. Historically, trading privileges have been denied to persons who are considered
to have abused the registration exemptions, or have solicited funds from the public
improperly or fraudulently, or have sold securities to the public without a prospectus
or with an inadequate prospectus. All of these seem appropriate grounds for exercise
of the s. 19(5) power, but the National Sea case [(June 1976) O.S.C.B. 149] signifi-
cantly extends these traditional grounds. Denial of personal trading privileges previ-
ously had not been used as a sanction to hold insiders accountable for any improper
trading in securities of their corporation nor to ensure timely disclosure responsibility
… (J.C. Baillie & V.P. Alboini, “The National Sea Decision – Exploring the Param-
eters of Administrative Discretion” (1977-78) 2 C.B.L.J. 454 at 459-60).

93Anisman, supra note 71 at 129, calls this sanction “peculiar to Canada” and suggests it may

be worthy of consideration in Australia:

In 1973 the Toronto Stock Exchange recommended that insiders who trade on the basis
of confidential information should be prohibited from any trading in securities. Several
provincial securities commissions implemented the recommendation through exercise
of their power to deny the trading exemptions under the provincial securities acts and
the Ontario Commission in particular has made active use of this power to address
insider trading.

94The Ontario Securities Commission did not have this opportunity in the Bennett matter.
95See supra note 65.
96Daniels & Morgan, supra note 36:

The present intention of the B.C. Securities Commission is to conduct an administra-
tive hearing into the same allegations that led to Bennett’s 1989 acquittal. Their goal
is to determine whether it is in the “public interest” to deny him and his co-defendants
their trading and other securities-related privileges inthe province. In seeking to under-
stand the commission’s thinking, however, one needs to know the one thing that has
never been well-articulated in the cases: which “interest” of the public are they out to
protect?

1993]

CHRONIQUES DE JURISPRUDENCE

1091

have recently changed their stance, in an effort to attract foreign investors.
“[M]ost countries now have rules against insider dealing, not least because it
can put outside investors off securities markets.”’97

As domestic markets become increasingly concerned with their competi-
tive position in the international marketplace, their efforts to shore up credibility
have proliferated. This is particularly true of the British Columbia markets,
given the battering which the Vancouver Stock Exchange has taken in terms of
market credibility.98 Issues of market integrity have surged to the forefront of
regulators’ concerns.99 Can the phenomenal rise in the importance of the inter-
national capital markets be an underlying reason for the dogged persistence with
which the B.C. Securities Commission feels compelled to pursue the Bennett
matter?

Conclusion

Where does this leave us? The Bennetts, five years later, are still before the
courts. l Two years later, Ontario still has no legislation which its courts would
recognize as authorizing them to lend’assistance to the Ontario Securities Com-
mission in gathering evidence outside Ontario. 1 International cooperation
among securities regulators, both formal and informal, may have grown to the
point where it is easier to pursue suspected insider trading internationally than
to pursue the Bennetts within Canada.

It is time for legislative action, at both the federal and provincial levels.
Provincially, it is time for a major overhaul of the OSA; the time for occasional
tinkering is past. At the federal level, it is time for a recharacterization of issues
such as insider trading; insider trading is no longer so much a question of cor-
porate governance, an area where federal interest is fading, as it is a question
of market integrity, an area of lively federal interest.'” And it is time to act
quickly. The pressures of the international market place will only increase, giv-
ing the lie to the antiquated notion that securities regulation is a local matter.

97″Balancing Act,” supra note 72 at 84.
98This is especially true of the perception among U.S. investors and issuers. A particularly dam-
aging piece on the Vancouver Stock Exchange, “Too Good to be True?”, aired on ABC’s Prime
Time Live on October 4, 1990. Currently, an inquiry into the operations of the Vancouver Stock
Exchange (“VSE”) is taking place “to find ways to improve the Vancouver-based securities mar-
ket’s badly tarnished international image.” See “Regulator Criticizes VSE for Catering to Fads”
The [Toronto] Globe and Mail (14 July 1993) Bll: “Douglas Hyndman, chairman of the B.C.
Securities Commission, said the VSE, which the commission oversees, will have to reverse its cur-
rent reputation as ‘an undisciplined market in which dealers, promoters and insiders profit at the
expense of public investors.”‘

99For example, the most ambitious ongoing project of the SEC is the Market 2000 initiative, a

study of the U.S. equity markets. See 57:141 F.R. 32587 (22 July 1992).

10 As of August 1993, their appeal to the B.C. Court of Appeal, contesting the administrative
hearing before the B.C. Securities Commission, was scheduled to be heard in the fall of 1993.

l0lSee proposed amendments, supra note 35.
‘2To the extent there is federal regulation at all, in the face of the inevitable integration of finan-
cial markets both domestically and internationally, insider trading should be the responsibility of
the Department of Finance rather than Consumer and Corporate Affairs; the issues raised by insider
trading are now of market integrity rather than strictly of corporate governance.

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APPENDIX

BRIEF CHRONOLOGY OF PROCEEDINGS IN THE BENNETT MATTER*

November 7, 1988

January 27, 1989

February 2, 1989

February 10, 1989

April 17, 1989

May 12, 1989

June 29, 1989
December 15, 1989

December 29, 1989

February 6, 1990

February 19, 1990

Joint investigation by the B.C. and Ontario Securi-
ties Commissions begins. Bennetts are interviewed
in the course of the investigation.
Information sworn; quasi-criminal charges laid
against the Bennetts and Doman under section 68 of
the B.C. Securities Act. The Commission also gives
notice of intention to hold a hearing on February 10,
1989. The Bennetts’ trading privileges are sus-
pended until date of hearing (under then subsection
145(2)). Doman agrees to provide the Commission
with written notice of his trades in securities; the
Commission agrees not to take administrative action
against Doman.
Quasi-criminal charges laid against Bennetts and
Doman in Ontario under the Provincial Offences Act.

B.C. Securities Commission administrative hearing
begins and is adjourned by consent the same day
pending the outcome of the quasi-criminal action.

Information sworn regarding B.C. quasi- criminal
proceedings; Provincial Court trial begins in British
Columbia.

B.C. Provincial Court decision. All charges dis-
missed; no appeal.
Ontario Provincial Offences Act charges withdrawn.
Bermetts and Doman served with summons to attend
and give evidence at Ontario Securities Commission
hearing; they decline to attom to the jurisdiction of
the Commission.
Ontario Securities Commission brings application to
Ontario High Court to appoint commissioner to take
evidence outside of province.
Decision of Ontario High Court. Application ref-
used; notice of appeal filed.

Ontario Securities Commission hearing adjourned
when Bennetts decline to submit to the jurisdiction
of the Ontario Commission; B.C. Securities Com-
mission administrative hearing preparations con-
tinue.

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CASE COMMENTS

1093

September 11, 1990

October 9, 1990

October 26, 1990

January 11, 1991

January 21, 1991

February 14, 1991

February 18, 1991

May 2, 1991

July 22, 1992

August 10, 1992

August 1992

Summons for further oral examination served on
Bennetts by B.C. Securities Commission, the Com-
mission having lost the tapes of earlier examinations.

Bennetts file petitions to B.C. Supreme Court in
chambers challenging B.C. Securities Commission
hearings.

Amended notice of hearing by B.C. Securities Com-
mission for February 18, 1991 (Doman named for
first time).

Doman files petition challenging the B.C. Securities
Commission hearings.

Melnick J. (B.C. Supreme Court) hears challenge to
B.C. Securities Commission hearing in chambers
15 days of argument.

Appeal to Ontario Court of Appeal re taking evi-
dence outside of province dismissed.

B.C. Securities Commission administrative hearing
(pursuant to October 26, 1990 notice) rescheduled to
August 10, 1992.

Decision of Melnick J. in chambers; hearing allowed
to proceed but B.C. Securities Commission enjoined
from conducting further examinations re lost tapes.
Appealed to B.C. Court of Appeal.

B.C. Court of Appeal affirms Melnick J.’s ruling.
Leave to appeal to Supreme Court of Canada sought.

B.C. Securities Commission administrative hearing
rescheduled (Supreme Court of Canada granted stay
until Supreme Court of Canada leave to appeal
heard).

Supreme Court of Canada refuses to hear appeal
from B.C. Court of Appeal re B.C. Securities Com-
mission administrative hearing.

January 11, 1993

B.C. Securities Commission hearing begins.

January 18, 1993

January 25, 1993

Bennetts and Doman move that the hearing be
quashed, alleging, inter alia, that a member of the
panel is in a conflict of interest position.

B.C. Securities Commission panel dismisses the
motion.

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[Vol. 38

February 2, 1993

The B.C. Court of Appeal grants leave to appeal the
panel’s decision and stays the hearing pending the
outcome of that appeal. The appeal is scheduled to
be heard by the B.C. Court of Appeal in the fall of
1993.

“The information in this chronology is based on information appearing in the
judgments and the press.

BOOK REVIEW
CHRONIQUE BIBLIOGRAPHIQUE

W. Michael Reisman, Systems of Control in International Adjudication and
Arbitration: Breakdown and Repair. Durham: Duke University Press, 1992.
Pp. xi, 174 [$29.95]. Reviewed by David A. Chemla*

In this remarkable book, first presented on the occasion of the 1989 Currie
Lecture and partly based on some of his previously published articles, Michael
Reisman, Wesley Newcomb Hohfield Professor of Jurisprudence at Yale Law
School, warns that existing international dispute resolution processes are cur-
rently imperilled and in urgent need of repair. The malaise sapping the reliabil-
ity, effectiveness and appeal of interstate, mixed and truly private international
tribunals, is a breakdown of the control mechanisms which necessarily under-
gird all types of dispute resolution. Reisman’s self-declared purpose is first to
clearly diagnose the malaise, and second, to offer effective antidotes.’

The first of the book’s five chapters is an introduction explaining the pur-
poses and types of control mechanisms and their indispensability to transna-
tional third party decision-making. The central aim and absolute necessity of
control mechanisms are, according to the author, inextricably linked to the lim-
ited mandate conferred to an arbitrator by contracting parties:

Arbitration is a delegated and restricted power to make certain types of decisions
in certain prescribed ways. Any restricted delegation of power must have some
system of control. Controls are techniques or mechanisms in engineered artifacts,
whether physical or social, whose function is to ensure that an artifact works the
way it was designed to work. In social and legal arrangements in which a limited
power is delegated, control systems are essential; without them the putative
restrictions disappear and the limited power may become absolute … Controls are
necessary not only for efficient operation. Effective controls are the only assurance
of limited government. In this sense controls are a sine qua non of liberty.2
Controls are thus necessary to ensure that arbitrators render awards which
fall within the contractual limits imposed by the parties as well as within their

B.A. (Toronto), B.C.L. & LL.B. (McGill). Lawyer at Stikeman, Elliott (Montreal). I would like
to thank Gina Valle for her continuous support and the editors of the Law Journal for their patience.
McGill Law Journal 1993
Revue de droit de McGill
To be cited as: (1993) 38 McGill L.J. 1095
Mode de r6frence: (1993) 38 R.D. McGill 1095
1W.M. Reisman, Systems of Control in International Adjudication and Arbitration: Breakdown

and Repair (Durham: Duke University Press, 1992) at 10 [hereinafter Systems of Control].

2lbid. at 1.

1096

McGILL LAW JOURNAL

[Vol. 38

shared expectations. Should an arbitrator do anything not authorized by the par-
ties, he commits an exces de pouvoir, which serves as the conceptual foundation
of control for arbitration. Controls must either serve as a garde-fou for arbitra-
tors who may stray off the contractually charted course, or in cases where arbi-
trators have manifestly deviated from it, controls must offer efficacious
recourses to nullify the tainted award. Any useful control mechanism must,
however, strike a delicate balance between on the one hand, preventing possible
abuse of arbitral autonomy, and on the other, not constraining autonomy to the
point of effectively suffocating it. Either extreme would inevitably lead to dis-
satisfaction of arbitration’s users and would, in the long run, cause arbitration
to lose its status as a preferred means of dispute resolution.

Reisman espouses the view that international arbitration cannot simply
copy control mechanisms prevalent in domestic adjudication because the inter-
national legal landscape lacks a hierarchical and permanent judicial bureaucracy
which is “equipped with an effective compulsory jurisdiction to review allega-
tions of excessive jurisdiction and to decide impartially the alleged nullity of the
award.” 3 National courts are ill-suited to act as control entities for international
arbitration because courts’ involvement necessarily detracts from arbitration’s
desirable characteristics, e.g. simplicity, economy, time efficiency, right to
appoint decision-maker.4

On this last point, Reisman probably overstates his case. After all, a great
majority of national arbitration laws provide for setting aside procedures of
awards (in civil law parlance, recours en nullite), which have not been so cum-
bersome and time-consuming that confidence in arbitration has really suffered.
Secondly, Article V.1(c) of the New York Convention provides that courts in
which enforcement of a foreign award is sought may refuse enforcement of the
award in cases where the award debtor adduces evidence of excess of jurisdic-
tion.5 Accordingly, domestic courts in which enforcement proceedings are gov-
erned by the New York Convention or in which setting aside procedures have
been initiated, already play a useful and essential control function. They act de
facto as a permanent judicial bureaucracy which reviews allegations of tainted
awards and in appropriate cases, either annuls or refuses to enforce them. Reis
man’s contention here simply does not square with the thrust of his fourth chap-
ter where he recognizes the practical and indispensable control function per-
formed by national courts in private international arbitration.

31bid. at 6.
4Ibid. at 8.
5United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
10 June 1958, 330 U.N.T.S. 38, 21 U.S.T. 2517 [hereinafter New York Convention]. Art. V.I(c) of
the New York Convention provides that a court may refuse to enforce a foreign award upon proof
that:

(c) [t]he award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration, provided that, if the decisions on matters sub-
mitted to arbitration can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to arbitration may be recognized
and enforced …

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BOOK REVIEW

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In chapter 2, the author analyzes the component parts of the control system
of the International Court of Justice (“ICJ”) and their breakdown over the pas-
sage of time. The ICJ’s conception of its own jurisdiction constitutes one of the
most crucial informal mechanisms making up the ICJ’s control system. Reisman
demonstrates that the ICJ’s precursor, the Permanent Court of International Jus-
tice, and the ICJ, at least from 1945 to 1973, strictly adhered to a restrictive con-
ception of jurisdiction, which meant that the ICJ only impleaded States which
clearly consented to its jurisdiction.6 This informal control mechanism acted to
reassure government advisers fretful of their State being dragged before the
Court.

The Nuclear Tests Case of 1973-747 signalled the beginning of the demise
of restrictive jurisdiction, with the Court’s various decisions in the Nicaragua’
saga heralding the consecration of a more expansive conception of jurisdiction.
In Nuclear Tests Case and Nicaragua, Reisman contends that the ICJ made
unsubstantiated jurisdictional decisions, apparently motivated by a political
concern to be seen to be filling the vacuum created by the Security Council’s
paralysis on the issues raised by these cases.9 These decisions were also char-
acterized by an unhealthy disregard for the actual consent of the putative
defendant. In Border and Transborder Armed Actions between Nicaragua and
Honduras,”0 in which the Court once again asserted its jurisdiction, Judge Man-
fred Lachs, the Court’s most senior and experienced member, affinned that “the
mere opening of the door [of the Court] may bring about a solution to a dispute
[and] the parties retain their freedom of action, and full possibilities of finding
solutions.”‘” Reisman concludes from Lachs’ remarks that the Court’s new
thinking is not being nourished by law but by politics: “The conception of the
court’s function implicit in these remarks is not one of a tribunal whose juris-
diction depends upon the agreement of the parties and whose confirmation in
each particular case is the subject of a strict legal decision by the tribunal.
Rather, it is of an institution performing an explicit political role

“.2

He regrets the political role that the Court seems determined to arrogate to
itself because it was neither provided for in the ICJ Statute, nor was it contem-
plated by the Statute’s signatories. In addition, he fears that the ICJ may be
unable to discharge its judicial functions effectively if diplomatic and political
preoccupations are uppermost in its mind, with the consequent result that the
ICJ will lose credibility and legitimacy in the eyes of industrialized States which
have other, more controlled ways of resolving their disputes. 3

6Systems of Control, supra note 1 at 19-20.
7(Australia v. France) (interim measures), Order of 22 June 1973, [1973] I.C.J. Rep. 99; (Aus-

tralia v. France) (merits), [1974] I.C.J. Rep. 253 [hereinafter Nuclear Tests Case].

8See, in particular, Case Concerning Military and Paramilitary Activities in and against Nica-
ragua, (Nicaragua v. United States) (jurisdiction and admissibility), [1984] I.C.J. Rep. 392 [here-
inafter Nicaragua].

9Systems of Control, supra note 1 at 41.
1″(Nicaragua v. Honduras) (jurisdiction and admissibility), [1988] I.C.J. Rep. 69.
“Cited in Systems of Control, supra note 1 at 26.
12 Ibid.
’31bid. at 26, 42-43.

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REVUE DE DROIT DE McGILL

[Vol. 38

The whittling away of restrictive jurisdiction has also been accompanied
by the breakdown of stare decisis, another potentially useful control mechanism
since respect for previous case law ensures coherence, predictability and ulti-
mately, confidence in judicial decision-making. The author examines recent
case law to show that the ICJ has made it a practice to engage in sloppy quo-
tations of earlier case law to justify erroneous conclusions. Aside from deplor-
ing the misleading and objectionable quotation practice, Reisman believes that
by not respecting its own case law the ICJ is doing itself and others who may
be considering its use a great disservice. Its recent decisions have undermined
the confidence in its reliability, caused some potential State litigants either to
canvass other dispute settlement mechanisms, or in some cases, to withdraw
altogether from the ICJ’s jurisdiction.

As Reisman also correctly implies, even when some of the more econom-
ically powerful States are prepared to use the ICJ dispute settlement mechanism,
they frequently prefer to have their dispute considered by an ICJ chamber, and
not the full Court. 4 In the revised Chamber procedure, States are entitled to pick
the judges they trust, who sit in minicourt and adjudicate the dispute between
the litigants. Although some authors have argued in favour of the Chamber pro-
cedure, 5 it is hard to disagree with Reisman that the development of such a pro-
cedure signals a definite lack of confidence in the ability of the full Court to
adjudicate cases in an impartial, logical and predictable way. This lack of con-
fidence will continue to cause some States, primarily industrialized ones, to
reconsider the extent to which they can use the ICJ. Reisman concludes that the
ICJ must act now to reestablish some controls in an effort to rebuild confidence
and places the responsibility of such action squarely on the judges currently sit-
ting at the ICJ.

In chapter 3, Reisman describes and then assesses the performance of
ICSID’s control system. 6 The crucial component of ICSID’s control system,
and its principal innovation, is the existence of an internal body to which are
submitted claims for nullification of awards rendered by an initial arbitral tribu-
nal. This body is known as an ad hoc Committee, which is composed of three
persons, all of whom are appointed by the Chairman of the ICSID Administra-
tive Council and none of whom can have the nationality of either litigant. 7 The
ad hoc Committee may stay enforcement of the tribunal rendered by the initial
award, pending its decision, and can annul the initial award, either in whole or
in part, on the basis of one of the grounds enumerated at Article 52(l).”s Reis-
man appears convinced of the great potential (but not the actual practice) of the
ICSID control system:

Of course, the optimum control institution for international commercial arbitration
would be self-contained at the international level, completely avoiding national

141bid. at 42-43.
15See S. Schwebel, “Reflections on the Role of the International Court of Justice” (1986) 61

Wash. L. Rev. 1061.

t6Convention on the Settlement of Investment Disputes between States and Nationals of Other
States, 18 March 1965, 575 U.N.T.S. 159, 17 U.S.T. 1270, T.I.A.S. No. 6090 (in force 14 October
1966)[hereinafter ICSID or Convention].

17Art, 52(3) of the Convention.
“8Art. 52(1) of the Convention is reproduced below.

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CHRONIQUE BIBLIOGRAPHIQUE

1099

courts, but would perform all necessary control requirements. This sort of control
institution has proved elusive. It is now relatively easy to establish workable inter-
national arbitral institutions, as their proliferation demonstrates. It has proved
much more difficult to create comparably workable explicit control institutions,
whether through some form of review or appeal.

There is one dramatic exception. World Bank arbitration, thanks to the oppor-
tunities presented by its structure and the imagination of its conceivers, provides
us with an example of an entirely internal and international control mechanism.
[emphasis added]’ 9

My quibble with Reisman here is his characterization of the ICSID control
system as completely internal or self-contained, by which he means independent
of domestic courts.”0 Yet the operation and control system of ICSID dispute set-
tlement are not wholly divorced from national courts and national law. Indeed,
should the losing party in an ICSID arbitration refrain from complying with the
terms of the award rendered against it, the creditor of the award has no choice
but to take enforcement proceedings in the domestic jurisdiction where assets
of the award debtor are located. It appears that this is not an uncommon occur-
rence.’ Furthermore, in such proceedings, any award is, even with the Conven-
tion,2 2 subject to the law of the enforcement jurisdiction regarding state immu-
nity from execution. This can frequently have the effect of frustrating the
enforcement of ICSID awards against States, thereby nullifying any possibility
that the contested award could be satisfied against the debtor’s assets within the
territorial jurisdiction of the domestic court. 3

Reisman examines the decisions of three ad hoc Committees and dis-
cusses, among other things, their “constitutive rulings,” by which he means
those that not only addressed the case at bar but also future review decisions
under Article 52(1). Article 52(1) reads as follows:

52(1). Either party may request annulment of the award by an application in writ-
ing addressed to the Secretary-General on one or more of the following
grounds:
(a) that the Tribunal was not properly constituted;
(b) that the Tribunal has manifestly exceeded its powers;
(c) that there was corruption on the part of a member of the Tribunal;

19Systems of Control, supra note 1 at 46.
20Such a characterization of Reisman’s view seems justified by a later passage where the author
states: “Control systems such as those devised by ICSID were animated in large part by a desire
to bypass national courts in the postaward enforcement phase of the international awards issued
by ICSID tribunals. Hence the creation of an entirely internalized control system within the World
Banks [sic] arbitration center itself’ (ibid. at 108).

21See S. Carias-Borjas, “Recognition and Enforcement of ICSID Awards: The Decision of the

French Cour de Cassation in Soabi v. Senegal” (1991) 2 Amer. Rev. Int’l Arb. 354.
‘ 22In fact, Art. 55 of the Convention specifically preserves the application of municipal law gov-
erning state immunities from execution. Art. 55 reads as follows: “Nothing in Article 54 [which
directs courts of Contracting States to recognize an ICSID award as binding and a final judgment
of a court in that State] shall be construed as derogating from the law in force in any Contracting
State relating to iminunity of that State or of any foreign State from execution.”

23S.J. Toope, Mixed International Arbitration: Studies in Arbitration between States and Private
Persons (Cambridge: Grotius, 1990) at 249. In both France and the United States, national laws
on immunity from execution have thwarted attempts to enforce ICSID awards in both countries.
On this point, see Carias-Borjas, supra note 21 at 369-71.

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McGILL LAW JOURNAL

[Vol. 38

(d) that there has been a serious departure from a fundamental rule of pro-

cedure; or

(e) that the award has failed to state the reasons on which it is based.

In Klockner ,24 the first ad hoc Committee to interpret Article 52(1), the Com-
mittee annulled the initial award. In so doing, the Committee adopted what
Reisman has dubbed a “hair trigger,” which leads any technical defect in an
award, regardless of its magnitude and even in the absence of any material vio-
lation of the Convention, to the automatic nullification of the award. A second
troublesome constitutive ruling held that an award should be annulled if it fails
to respond to every point raised during the arbitral proceedings including those
made in oral argument. Thirdly, the Klockner I Committee concluded that the
arbitrators’ duty to state reasons per Article 52(1)(e) had been violated because
the reasons given by the arbitral tribunal were not “sufficiently relevant,”
defined as “reasonably capable of justifying the result reached by the Tribunal.”
As one commentator has suggested, this test plants the eeds for appellate
review of the merits, an option which was considered and rejected in the course
of ICSID’s travaux prparatoires.’ As a result of the constitutive rulings of the
Klockner I Committee, the grounds for annulment of an ICSID award were con-
siderably expanded. The annulment of the initial award by the Klockner I Com-
mittee led to the establishment of a second arbitral tribunal, which in turn pro-
duced a second ad hoc Committee.

From a control perspective, the picture brightened somewhat with the deci-
sions of subsequent ad hoc Committees, notably in Mine 1,26 in which the Com-
mittee concluded against the automatic annulment of an award in case of a tech-
nical defect in the award. In Mine I, the Committee also narrowed the range of
grounds for annulment (whose scope had been enlarged by Klockner I) by hold-
ing that any excess of arbitrator power has to be manifest to violate Article
52(1)(b) of the Convention, and that only serious departures from a fundamental
rule of procedure may ground a successful annulment action per Article
52(l)(d). In addition, the Mine I Committee rejected the view that a tribunal
must produce an award which deals with every question submitted to it. Instead,
only a tribunal’s failure to state reasons for the grounds on which it is based will
be a ground for annulment.

Reisman is concerned that ICSID controls have detracted from the advan-
tages normally associated with arbitration by extending disputes ad infinitum,
and by adding significant litigation costs to the parties involved. Furthermore,
parties frequently resort to ad hoc Committees where they have no role to play
in selecting the arbitrators. He is encouraged, however, by recent decisions
which have paved the way for an “apparently effective process of reconstruc-
tion.”2

2 ‘Klockner GmbH v. United Republic of Cameroon, (1986) 1 ICSID Rev.-FILJ 89 [hereinafter

Klockner 1].

25J. Paulsson, “ICSID’s Achievements and Prospects” (1991) 6 ICSID Rev.-FILJ 380 at 388-89.
26Maritime International Nominees Establishment v. Government of Guinea, (1990) 5 ICSID
27Systems of Control, supra note 1 at 106.

Rev.-FILJ 95 [hereinafter Mine I ]

1993]

BOOK REVIEW

1101

Reisman’s suggestions for improving the ICSID control system are numer-
ous and varied.’s Their detailed consideration is simply beyond the scope of this
review and warrants a more in-depth treatment. Many of them have, however,
been pooh-poohed by Aron Broches, a former Secretary General of ICSID. This
has, in turn, provoked a stinging reply from Reisman.”

In chapter 4, Reisman analyses the central control mechanisms supporting
private international arbitration and their gradual erosion. The control scheme
for this type of dispute settlement is found in the New York Convention, which
assigns distinct review functions to what the author calls “primary” and “sec-
ondary” jurisdictions. 0 Primary jurisdictions are those where an award was
rendered or much less frequently, under whose law the arbitration was gov-
erned. Under the New York Convention, it is in primary jurisdictions where an
award debtor may initiate setting aside procedures, which if successful, render
the award unenforceable in all jurisdictions. The nullificatory consequences of
the judgment rendered by the primary jurisdiction are thus universal. In contrast,
secondary jurisdictions are those jurisdictions where enforcement of an award
is sought. Should such enforcement proceedings prove unsuccessful, the effects
of such a judgment are limited to the territorial jurisdiction of the State where
enforcement was sought. In other words, the failure of the award creditor to
enforce his award in one jurisdiction does not, in any way, prevent him from
seeking enforcement in another secondary jurisdiction.

The scrutiny performed by the primary jurisdiction is, according to the
author, absolutely crucial to the limited review function assigned to secondary
jurisdictions, as well as to the legitimacy and survival of the New York Conven-
tion control scheme as a whole:

The possibility of the scrutiny of the award, in terms of the standards of the pri-
mary jurisdiction, whatever they are, is an indispensable part of this control
scheme: it is one-half of the quid pro quo that is at the base of the implicit compact
between primary and secondary jurisdictions. Without an assurance of the contin-
uing possibility of such scrutiny at the behest of the loser, any secondary jurisdic-
tion will be, quite reasonably, reluctant to buy a “pig in a poke” and to enforce an
unsupervised private act (far less supervised than a foreign judgment) whose
effectiveness requires the application of its own official power and whose conse-
quence will be the removal abroad of the treasure of someone subject to local
jurisdiction.

3 1

This leads Reisman to vigorously contest the view that the obligations
imposed by the New York Convention on primary jurisdictions are merely dis-
cretionary. He then shows how domestic courts have rendered decisions and

281Jbid. at 87-106.
2 9A. Broches, “Observations on the Finality of ICSID Awards” (1991) 6 ICSID Rev.-FILJ 321
at 372-75, in which the author responds to the arguments presented in W.M. Reisman, “The Break-
down of the Control Mechanism in ICSID Arbitration” [1989] Duke L.J. 739. The chapter of Sys-
tems of Control, ibid., on ICSID is a revised version of Reisman’s 1989 article. Broches’ dismissal
of Reisman’s purported remedies for ICSID ‘s dispute settlement mechanism has, in turn, led to
W.M. Reisman, “Repairing ICSID’s Control System: Some Comments on Aron Broches’ ‘Obser-
vations on the Finality of ICSID Awards”‘ (1992) 7 ICSID Rev.-FILJ 196.

3 Systems of Control, ibid. at 113-14.
31Ibid. at 118.

1102

REVUE DE DROIT DE McGILL

[Vol. 38

how national legislatures have enacted statutory reforms which disregard the
control functions assigned to primary jurisdictions. In.this regard, Reisman is
much less concerned by episodic judicial non-performance than legislative non-
performance because of the latter’s more systemic and enduring character.” The
author is particularly critical of the Swiss and Belgian arbitration reforms which
seriously curtail, and in the Belgian case, completely eliminate any possibility
of initiating setting aside procedures in an arbitration not involving Belgian par-
ties.

The consequences of such reforms for the operational finality of arbitration
awards are far-reaching. First, in the absence of the slightest scrutiny by the pri-
mary jurisdiction, the degree of review in the secondary jurisdiction should and
undoubtedly will be greater. This will entail greater investment of judicial
resources by the secondary jurisdiction. This enables Reisman to make the case
that States like Belgium and Switzerland are free-riders because they are
avoiding the expense of their core obligations of scrutiny as primary jurisdic-
tions, but at the same time they are benefitting, when their courts must perform
secondary jurisdiction functions, from the judicial resources invested by other
States who have performed their obligations of review as primary jurisdic-
tions.3 In addition, Reisman makes the point that the debtor no longer has the
opportunity to nullify a defective award once and for all in the primary jurisdic-
tion. The nuisance value of an award is correspondingly increased given that the
creditor of a defective award has multiple opportunities to harass the debtor in
any secondary jurisdiction where the debtor has assets.

Aggravating the breakdown of control mechanisms underpinning private
international arbitration is the concurrent development of lex mercatoria. The
crux of his argument, revealed in the following passage, is that lex mercatoria
serves to override the choice of law made by contracting parties and the controls
inherent to the applicable law: “Lex mercatoria usurps parties’ choice of law
and the designation by private international law of some national law’s system
for governing that choice of law. It usurps the governing law and the controls
that a particular national community deems necessary for commercial transac-
tions occurring within its space.”‘

In my view, Reisman overstates the threat posed by lex mercatoria to the
parties’ choice of applicable law and the controls inherent to that law. First,
there are very few actual cases where an arbitral tribunal has applied lex mer-
catoria when the parties have specified an applicable national law in their con-
tract.35 Usually, this has occurred when application of the applicable national
law would violate transnational public policy, or when the parties have explic-
itly conferred the powers of an amiable compositeur to the arbitral tribunal.36

32Ibid. at 123-24.
331bid. at 129, 131-32.
341bid. at 138.
35B. Oppetit, “La lex mercatoria dans les contrats et ‘arbitrage internationaux: rdalits et per-
361bid.; L.J. Mustill, “The New Lex Mercatoria: The First Twenty-Five Years” (1987) 4 Arb.

spectives” [1979] J.D.I. 471 at 483.

Int’l 86 at 104.

19931

CHRONIQUE BIBLIOGRAPHIQUE

1103

In the fifth and concluding chapter of the book Reisman advocates, among
other things, a greater understanding of the important role played by individuals
in law, in general, and in legal control systems, in particular. More specifically,
the author suggests that international judges and arbitrators must appreciate and
meet the manifest expectations of their roles in order to contribute to global
order and prosperity.37 When judges and arbitrators lose sight of the responsibil-
ities of their roles, a system of checks and balances is necessary to rectify the
oversight. This is true in the domestic context and even more so in the interna-
tional arena.

Reisman’s work represents a solid contribution to the existing scholarship
on international dispute resolution. Particularly impressive is Reisman’s scope,
that is, his ability to demonstrate the breakdown of control mechanisms in the
three main types of transnational dispute resolution. The book will probably be
of greater interest to scholars than practitioners, though the chapter on ICSID,
for instance, could probably benefit both groups equally. Finally, the author’s
writing style is delectable, given its remarkable grace, fluidity and precision. We
can only hope that Reisman tackles other legal subjects in the future, with the
same style and depth of analysis that he has mustered in Systems of Control.

37Systems of Control, supra note 1 at 144-45.

BOOKS RECEIVED
LIVRES REQUS

Acad6mie internationale de droit compar6, Rapports g~n~raux: XIII congres

international, Cowansville, Yvon Blais, 1992.

Actes de la Xr conference desjuristes de l’Etat, Cowansville, Yvon Blais, 1992.

Actes de la premi~re conf6rence Yves Pratte, Les recours collectifs en Ontario
et au Qudbec, Montr6al, Wilson & Lafleur, 1992.

Actes des journ6es louisianaises de l’Institut canadien d’6tudes juridiques sup6-
rieures 1991, Confrrences sur le nouveau Code civil du Quibec, Cowansville,
Yvon Blais, 1992.

Actes du colloque conjoint des Facult6s de droit de l’Universit6 de Poitiers et
de l’Universit6 de Montr6al, Le droit de la communicatique, Montral, Th6mis,
1992.

P. Argutin, M. Cloutier et L. Giard, Loi sur les accidents du travail et les mala-
dies professionnelles: ligislation, jurisprudence et doctrine, Montr6al, Wilson
& Lafleur, 1992.

J. Bakan & D. Schneiderman, Social Justice and the Constitution (Ottawa: Car-
leton University Press, 1992).

P. BOiveau et B. Letendre, Precis 6limentaire de la preuve pnale, Montr6al,
Th6mis, 1992.

J. Bell, French Constitutional Law (Oxford: Clarendon Press, 1992).

J. Bellemare et L. Viau, Droit de la preuve pinale, Montr6al, Th6mis, 1991.

S. Blake, Administrative Law in Canada (Toronto: Butterworths, 1992).

S. Bourque, La nouvelle loi sur la concurrence, Cowansville, Yvon Blais, 1992.

A. Bra~n, Le droit maritime au Quibec, Montr6al, Wilson & Lafleur, 1992.

H. Brun, dir., Chartes des droits de la personne: ligislation, jurisprudence et
doctrine, 5′ 6d., Montr6al, Wilson & Lafleur, 1992.

19931 –

BOOKS RECEIVED

1105

I. Bushnell, The Captive Court: A Study of the Supreme Court of Canada (Mon-
treal & Kingston- McGill-Queen’s University Press, 1992).

W.E. Butler, ed., Control Over Compliance With International Law (Dordrecht:
Martinus Nijhoff, 1991).

A.C. Cairns, Charter versus Federalism: The Dilemmas of Constitutional
Reform (Montreal & Kingston: McGill-Queen’s University Press, 1992).

P. Carignan, Les garanties confessionnelles d la lumijre du renvoi relatif aux
jcoles s6parges de l’Ontario: un cas de primautj d’un droit collectif sur le droit
individuel d l’jgaliti, Montr6al, Th6mis, 1992.

F. Cassidy, ed., Aboriginal Title in British Columbia: Delgamuuku v. The Queen
(Lantzville, B.C.: Oolichan Books, 1992).

D.E. Chunn, From Punishment to Doing Good: Family Courts and Socialized
Justice in Ontario 1880-1940 (Toronto: University of Toronto Press, 1992).

Conf6rence de La Haye de Droit International Priv6, Manuel pratique sur le
fonctionnement de la Convention de La Haye du 15 novembre 1965 relative
la signification et a la notification d l’ 9tranger des actes judiciaires et extraju-
diciaires en matiere civile ou commerciale, 2 6 ed., Maklu Uitgevers, Antwerpen-
Apeldoorn, 1992.

P.-A. C6t6, The Interpretation of Legislation in Canada, 2d ed. (Cowansville:
Yvon Blais, 1991).

I.F. Dekker & H.H.G. Post, The Gulf War of 1980-1988 (Dordrecht: Martinus
Nijhoff, 1992).

J.-G. Desjardins, Trait de l’4valuation fonciere, Montr6al, Wilson & Lafleur,
1992.

D. Drache et R. Perin, eds., Negotiating with a Sovereign Quebec (Toronto:
James Lorimer, 1992).

M. Drapeau, Le harcilement sexuel au travail, Cowansville, Yvon Blais, 1991.

D. Dumais et D. Larriv6e, Assurance de personnes, Montr6al, Wilson &
Lafleur, 1992.

R.C. Effros, ed., Current Legal Issues Affecting Central Banks, vol. 1 (Washing-
ton: International Monetary Fund, 1992).

D. Ferland, B. Emery et J. Tremblay, Precis de procedure civile du Quebec,
Cowansville, Yvon Blais, 1992.

1106

REVUE DE DROIT DE McGILL

[Vol. 38

C. Fortin, Acheter ou revendre votre petite entreprise au meilleur prix, Mont-
real, Wilson & Lafleur, 1992.

R.L. Fraser, ed., Provincial Justice: Upper Canadian Legal Portraits (Toronto:
University of Toronto Press, 1992).

P. Garant, Prcis de droit des administrations publiques, 2′ 6d., Cowansville,
Yvon Blais, 1992.

A. Geddes, Product and Service Liability in the EEC: The New Strict Liability
Regime (London: Sweet & Maxwell, 1992).

G. Gilbert, Aspects of Extradition Law (Dordrecht: Martinus Nijhoff, 1991).

J. Girard, L. Morais et J. Pilote, Donations et testaments (aide m6moire), Mont-
r6al, Wilson & Lafleur, 1992.

S. Gorove, Developments in Space Law: Issues and Policies (Dordrecht: Mar-
tinus Nijhoff, 1991).

P. Harries-Jones, Making Knowledge Count (Montreal & Kingston: McGill-
Queen’s University Press, 1991).

F.K. Juenger, Choice of Law and Multistate Justice (Dordrecht: Martinus
Nijhoff, 1993).

N. Lacasse, L. Perret et J.-E. Denis, dir., Les contrats internationaux de distri-
bution (droit et gestion)/ International Distribution Contracts (Legal Aspect and
Management), Montreal, Wilson & Lafleur, 1992.

C. Landry, Nouveaux profils de carrire: le curriculum vitae des annes 90,
Montr6al, Editions de

‘Homme, 1992.

P. Laporte, Le traitg du recours a l’encontre d’un congddiement sans cause juste
et suffisante, Montrdal, Wilson & Lafleur, 1992.

P.A. LeBel, John Barleycorn Must Pay: Compensating the Victims of Drinking
Drivers (Champaign: University of Illinois Press, 1992).

Pierre Legrand Jr, dir., Common Law: d’un si&cle l’autre, Cowansville, Yvon
Blais, 1992.

G. lMtoumeau et P. Robert, Code de procedure pdnale du Quebec annoti, 2′ 6d.,
Montreal, Wilson & Lafleur, 1992.

G. Locas, Code de la s~curit9 routiere annotg, Montr6al, Wilson & Lafleur,
1992.

1993]

LIVRES REQUS

1107

Loi et r~glements sur la faillite/Act and Regulations Respecting Bankruptcy,
Montreal, Wilson & Lafleur, 1989.

G. Lord, J. Sasseville et D. Bruneau, Les principes de l’imposition au Canada,
9′ 6d., Montreal, Wilson & Lafleur, 1992.

J.E. Magnet & E.-H. W. Kluge, Withholding Treatmentfi’om Defective Newborn
Children (Cowansville: Brown Legal Publications, 1985).

M. Martel et P. Martel, La compagnie au Quebec: les aspects juridiques, Mont-
r6al, Wilson & Lafleur, 1992.

P. Martel, Les conventions entre actionnaires: une approche pratique, Mont-
real, Wilson & Lafleur, 1991.

M.W. McMahon, The Persistent Prison: Rethinking Decarceration and Penal
Reform (Toronto: University of Toronto Press, 1992).

J.-P. M~nard et D. Martin, La responsabilit6 m~dicale pour la faute d’ autrui,
Cowansville, Yvon Blais, 1992.

A. A. Morin, Principes de responsabilit6 en matire de d~liquance juvenile au
Canada, Montr6al, Wilson & Lafleur, 1992.

J.-Y. Morin, F. Rigaldies et D. Turp, Droit international public: documents d’in-
tdret canadien et qu6b~cois, t. 2, 2e 6d., Montreal, Th~mis, 1992.

J.-Y. Morin et J. Woehrling, Les constitutions du Canada et du Quebec du
rdgime francais i nos jours, Montreal, Th~mis, 1992.

R. Morissette, La presse et les tribunaux: un mariage de raison, Montreal, Wl-
son & Lafleur/Qu~becor, 1991.

P. Patenaude, dir., Quibec-Communaut frangaise de Belgique: autonomie et
spiciflcitg dans le cadre d’ un syst~me fidral, Montreal, Wilson & Lafleur,
1991.

C. Poirier et N. Gravel, Mieux comprendre sa vie de travail, Montreal, tEditions
de l’Homme, 1992.

1.-C. Pommier, Principe d’autonomie et loi du contrat en droit international
privi conventionnel, Paris, Economica, 1992.

A. Prujiner, Traitis et documents internationaux usuels en droit du commerce
international/Treaties and International Documents Used in International
Trade Law, Montreal, Wilson & Lafleur, 1992.

C. Purcell, Guide to Law Schools in Canada (Don Mills: ECW Press, 1992).

1108

McGILL LAW JOURNAL

[Vol. 38

B.G. Ramcharan, The International Law and Practice of Early-Warning and
Preventive Diplomacy: The Emerging Global Watch (Dordrecht: Martinus
Nijhoff, 1991).

Y Renaud et J.-L. Baudoin, dir., Compagnies, corporations et socijtds par
actions, Montrdal, Wilson & Lafleur, 1992-1993.

R.J. Roberts, Roberts on Competition/Antitrust: Canada and the United States
(Toronto: Butterworths, 1992).

P. Sanderson, Musicians and the Law in Canada (Toronto: Carswell, 1992).

R. Shiner, Norm and Nature: The Movements of Legal Thought (Oxford: Cla-
rendon Press, 1992).

J. Tacsan, The Dynamics of International Law in Conflict Resolution (Dor-
drecht: Martinus Nijhoff, 1992).

G. Tardi, The Legal Framework of Government: A Canadian Guide (Aurora:
Canada Law Book, 1992).

P. Trudel et F. Abran, dir., Droit du public d l’information et vie prive: deux
droits irrdconciliables?, Montr6al, Th6mis, 1992.

D. VanderZwaag, Canadian Ocean Law and Policy (Toronto: Butterworths,
1992).

L. Viau, A.-M. Boisvert et D. Labreche, Droitpdnal gingral, Montr6al, Th6mis,
1992.

L. Viau, Recueil d’arrets en preuve p6nale, Montr6al, Th6mis, 1992.

A. Watson, The State, Law and Religion: Pagan Rome (Athens: University of
Georgia Press, 1992).

F. Wooldridge, Company Law in the United Kingdom and the European Com-
munity: Its Harmonisation and Uniflcation (London: The Athlone Press, 1991).

THESIS SURVEY
RECENSION DES THItSES

I. Doctoral Theses/Theses de doctorat

Alex Adeyinka, Telecommunications Regulatory Reform: Theories, Princi-
ples and Policies, University of Toronto
The aim of the research leading to this work is to use telecommunications reg-
ulatory reform as a subject of contribution to the scholarship on regulatory pol-
icy analysis. In the last ten years there has been a significant change in the rela-
tionship between the state and the economy –
a development which has
challenged our revived understanding of the role of government in economic
activities. This development is now a major subject of critical analysis among
economists, political scientists, legal scholars and other policy analysts, seeking
to define the factors responsible for recent changes and to determine whether
these changes are good or bad.
The primary purpose of this thesis is to show how developments in the regula-
tion of telecommunications in Canada demonstrate this phenomenon of change
and the fundamental value problems involved. The central argument is that cur-
rent developments in Canadian telecommunications are driven by economic
efficiency concerns. The crucial challenge is to protect and promote non-
economic goals of regulation while allowing progressive market-oriented
reform to proceed in this sector.

Fu Hualing, Formalizing Popular Justice, Police and Community in Post-
Mao China, Osgoode Hall Law School
The thesis is to examine the return of “socialist legality” in post-Mao China as
reflected in the modernization of Pal Chu’uo, the neighbourhood police station.
It will discuss the political-legal and social-economic context in post-Mao
China and its impact on the police reform, concluding that the reform, far from
being a result of the blunt state imposition, is a complex process which involves
continuous conflict, negotiation, and compromise, which can be best understood
as an entity that fuses the characteristics of Maoism, reformism, and tradition-
alism.
Although it lagged before the reforms in other fields and was limited in scope
and intensity, the police reform was initiated by the government in the late

1110

McGILL LAW JOURNAL

[Vol. 38

1970s and intensified in the middle of the 1980s. The issue of police indepen-
dence, coupled with the theoretical, if not practical, separation of the party from
the police in lower level police units, was put onto the reform agenda. At the
same time, the police are becoming more mobile and proactive. The priority of
policing has been shifted from household registration to mobile random patrol.
Finally, measures are taken to make the police more accountable. The mysteri-
ous veil hanging over the police is gradually being removed and the issue of
public security is being lifted from the shadows and held up for public scrutiny.

The reform is part of the political restructuring and it in turn reinforces the trend
toward political emancipation and cultural liberation. There is a general consen-
sus in both political and popular culture that legal formalism is symbolically and
instrumentally superior to the Maoist and traditional forms of social ordering.
The radical Maoism has been discredited, and traditionalism is too ill-equipped
to deal with modem social problems. A modified Western model of social and
legal ordering could provide an alternative.

Gao Zhiguo, International Offshore Petroleum Contracts: Towards the Com-
patibility of Energy Need and Sustainable Development, Dalhousie Univer-
sity

International oil companies have carried out exploration and exploitation in
many developing countries since the turn of this century. The legal and commer-
cial relationship between petroleum producing countries and foreign oil compa-
nies was defined and governed by what were called traditional oil concession
agreements before the 1950s, and since then by what are known as modem
petroleum contracts.

This dissertation scrutinizes the development policies behind the evolution of
various arrangements for offshore petroleum exploitation. By studying the
examples of contracts in four developing countries (Thailand, Indonesia, Brazil
and China), it examines in particular the issues of mutuality of interests and
environmental sustainability that are reflected in both the structure and sub-
stance of the modem petroleum contracts that have emerged since the 1950s.

The major findings are that modem petroleum contracts are generally able to
achieve and maintain a necessary balance of rights, interests and benefits
between the contracting parties, but they have failed to produce any balance
between the extraction of resources and environmental sustainability. The exist-
ing contractual systems have failed in principle to provide adequate environ-
mental regulation and, moreover, they have not addressed the issue of sustain-
able development at all.

The arrangements that have focused on economic interests are inappropriate for
future energy development, but through the proper use of contract terms that
contain elements favouring sustainable development, economic and environ-
mental interests can nevertheless be accommodated and served at the same time.

19931

THESIS SURVEY

1111

The future direction for petroleum agreements is that they must recognize
explicitly the inherent independence and coexistence of commerciality and sus-
tainable development.

Gerald Goldstein, De l’exception d’ordre public aux r~gles d’application
nkessaire: itude du rattachement substantiel impiratif en droit international
privi canadien, Institute of Comparative Law, McGill University
L’analyse thi6orique du conflit de lois dans l’espace et dans le temps en droit
international priv6 (conflit << mobile >>) permet de se prononcer en faveur de sa
r~solution dans le cadre de chaque cat6gorie de cas, et de la r~gle particuliere
de conflit qui lui correspond.
Par cons6quent, il est nfcessaire de se pencher sur le contenu et le domaine de
la rgle de conflit < r6elle >> en Common Law (Angleterre, Canada) et en Droit
Civil (France, Quebec) afm d’6tudier, dans ces syst~mes, la r6solution des con-
flits mobiles affectant les rapports juridiques portant sur des meubles corporels
(h titre particulier). En effet, la pr6sence d’obligations personnelles entre les par-
ties et l’intervention des lois << d'application imm6diate >> viendront perturber la
r6 olution du conflit.

L’analyse compar6e de l’impact respectif de chacune de ces r~gles sera alors
entreprise afro de rendre compte. du Droit Positif et des perspectives futures.

Louise Labreche-Renaud, De la folie i la maladie mentale en Common Law
et l’institutionnalisation au Quebec de 1845 a 1892, Universit6 de Montreal
Rdsum6 non disponible/no abstract available

Mohamed Munavvar, Ocean States: Archipelagic Regimes in the Law of the
Sea, Dalhousie University
The United Nations Convention on the Law of the Sea, 1982, (LOSC) has legit-
imized ocean states. Ocean states are archipelagic states within which their
archipelago constitutes the total state territory.
The development of a new concept in the international law of the sea, which
created ocean states was necessary as traditional international law, which was
-mainly concerned with continental or land-based states, and could not be prop-
erly applied to states which consisted of archipelagos. The geographic, eco-
nomic, social, political and environmental circumstances of ocean states, there-
fore, require a more realistic definition of their territory. Such definition must
also conform to the public perception of ocean states, formed through a lengthy
process of interaction between the inhabitants of the state and their surrounding

1112

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[Vol. 38

waters and inter-connecting islands. Accordingly, the archipelagic concept in
the modem law of the sea has created an entirely new, yet eminently functional
method of acquisition of territory in international law.

Nevertheless the archipelagic concept must not be viewed simply in terms of
expanded coastal jurisdiction by certain states, but as a practical as well as func-
tional basis for the determination of the territorial limits of such “ocean” states.
In other words, the waters inter-connecting the islands of the archipelago are a
constituent part of the territoy of the archipelagic state. Furthermore, in the
case of many smaller ocean states, their ocean areas are of greater importance
than their land territory.

Although the size, nature and requirements of the various ocean states differ
greatly, the archipelagic concept provides the necessary territorial basis for
their national unity, independence and integrity. Most critically, the new concept
also determines the essential basis of such ocean states’ sustainable develop-
ment.

Willy Mutunga, Relational Contract Theory Outside National Jurisdictions,
Osgoode Hall Law School

Straddling between liberal and radical legal theories, relational contract theory
claims that it reconceptualises contract theory in a way that is both realistic and
relevant to the contractual relations that are now taking place under developed
capitalism. On this basis it criticises both classical and neo-classical contract
theories that, according to relational contract theory, reflect the economic and
philosophical policies of the Industrial Revolution. Relational contract theory’s
positiveness and limitations as a status quo theory are brought out by analysing
and contrasting it with and within the terrain of radical legal theories, namely,
the Critical Legal Studies (CLS) and the Marxist Theory of State and Law
(MTSL). In reconceptualising contract theory the thesis analyzes the positive-
ness and limitations of classical, neo-classical contract theories, relational con-
tract theory, the CLS and the MTSL. The positiveness of a legal theory whether
status quo or radical forms the juridical elements of a jurisprudence of basic
needs for all people. This jurisprudence has also another non-legal element, that
of organised resistance politics. This concept is not defined and is left vague to
avoid dogma at this stage. Each country will define its vision of organised
resistance politics. We attempt to sketch out our vision of such politics in this
thesis. We posit that a jurisprudence of basic needs is universal.

It is the reconceptualisation of contract theory by relational contract theory and
its rescue by the other theories that is applied to the entire data from the case
studies. The data deal with private foreign investment. Two of the case studies
are about joint ventures. The other two case studies are not joint ventures but
deal with the issue of foreign investment. The data are not conclusive and the
shortcomings are explained. There is also some comparative data from four
African countries. The latter data focus on the legal issues of foreign investment

1993]

RECENSION DES THESES

in Africa and the role that law has played in social transformation and in the pol-
itics of economic nationalism.

The thesis concludes that the propositions of relational contract theory as theo-
rised are applicable in a developing country. The usefulness of the propositions
as arguments in the ongoing rescheduling and renegotiations of debts, joint ven-
tures and investment agreements is brought out. The thesis also concludes that
these propositions have to be analyzed within the historical and socio-economic
context of a society so that they cease to be value-neutral. Such an analysis is
able to bring out not only the theory’s positiveness and limitations but also those
theories that criticise it.

A jurisprudence of basic needs for all people is the new approach that is pro-
posed. It draws on the strengths of liberal and radical theories, interacts the pres-
ent with the future and gives law a political content. We have called this polit-
ical ingredient organised resistance politics. In this thesis, a possible application
of a jurisprudence of basic needs for all people is illustrated by drawing on the
data from the case studies and by analysing the political economy of Kenya. We
conclude that its prospects have perhaps just begun in Kenya.

Kenneth Orie, Legal Aspects of Groundwater Quantity Allocation and Qua-
lity Protection in Canada, Institute of Comparative Law, McGill University
Groundwater quantity allocation and quality protection in Canada largely pro-
ceed in a fragmented fashion. Each jurisdiction pursues the management of its
water resources and the aquatic environment separately as well as independently
of other jurisdictions. This approach is at odds with the unity of the natural envi-
ronment and the inter-connectedness of groundwater resources.

The challenge facing Canada is to make the law recognize and be more respon-
sive to the unity of the aquatic environment and water resources. An active fed-
eral role in uniting and coordinating the efforts of the provinces in this regard
is crucial if this challenge is to be met. However, since the constitutional divi-
sion of powers in Canada encourages a fragmented approach to managing envi-
ronment and water resources, the federal government is incapacitated, purely on
a legal score, with respect to pulling together the efforts of the provinces. A
cooperative approach, based on political rather than legal coordination, is there-
fore, the most realistic option for the federal government to meet the challenge.
In this work, the writer examines the various areas for federal-provincial coop-
eration regarding groundwater allocation and protection. Such institutional inte-
gration or cooperation cannot be effective unless groundwater is addressed
together with the other component of the hydrologic cycle, namely: surface
water and the ecosystem they support. At the same time, in adopting an inte-
grated hydrologic cycle approach, specific groundwater management strategies
canvassed in this work must be taken into account if groundwater is to be more
efficiently allocated and protected. Pursuant to these considerations, this writer
is of the opinion that groundwater resources in Canada should be managed in

1114

McGILL LAW JOURNAL

[Vol. 38

a way that meets both present and future needs of Canadians, thus in a sustain-
able fashion. This can best be achieved if resource management relies upon a
combination of contaminant-focused and resource-focused approaches adopted
under unified federal-provincial efforts as well as under an integrated hydro-
logic cycle management.

William Schabas, The Abolition of the Death Penalty in International Law,
Universit6 de Montreal
R6sum6 non disponible/no abstract available

Setsuko Ushioda, Satellite-Based Multilateral Arms Control Verification
Schemes and International Law, Institute of Air and Space Law, McGill
University

Verification of compliance has been and will continue to be an essential com-
ponent of arms control and disarmament agreements. Following a brief histor-
ical survey of verification, this study examines in detail verification provisions
in all major multilateral and bilateral disarmament agreements, in force and in
the drafting stage, from the perspective of monitoring compliance by satellites.
The feasibility of verification from space is examined from technical and legal
points of view. Important differences are noted between bilateral and multilat-
eral agreements in terms of verification requirements. The effectiveness of, as
well as confidence in, the verification process, it is suggested, will be signifi-
cantly enhanced if the monitoring is carried out by an organization in which all
contracting states have a say in the planning and conduct of monitoring and par-
ticipate in decision-making. This study analyzes various official and private rec-
ommendations for the establishment of such an organization, with special
emphasis on the proposed International Satellite Monitoring Agency (ISMA)
whose constitution, structure and functions are set out in a comprehensive report
prepared by a United Nations group of experts. The ISMA could play, in the
opinion of the author, an important auxiliary role in monitoring compliance with
many existing disarmament agreements as well as with those currently in the
drafting phase.

Mohammed Zerouali, Les questions du droit international et du traitement
national dans le Code de conduite de l’ONU sur les societis transnationales,
Universit6 Laval
L’6tude affirme que les formules actuellement proposres par la Commission des
socidtds transnationales en vue de rrsoudre les questions en suspens dans le
Code de I’ONU sur les STN sont pertinentes tant en termes de leurs contenu et

1993]

THESIS SURVEY

1115

port6e juridiques qu’en termes de satisfaction de la plupart des besoins, int6r~ts
et theses 6tatiques sur des sujets longtemps controvers6s parmi les ttats et en
doctrine (traitement des entreprises 6trang~res << conform6ment au droit interna- tional >>, octroi du traitement national, nationalisation et indemnisation, r~gle-
ment des diff6rends d’investissement, droit applicable, transfert des b6n6fices,
ren6gociation des contrats, arbitrage international etc.).
De telles solutions constituent du point de vue juridique comme pratique, un
compromis raisonnable qui permettra de surmonter l’impasse dans laquelle
sombrent les n6gociations entam6es voilh une d6cennie et demie et qui devaient
mener en principe, c’est l’un des objectifs fondamentaux du nouvel ordre 6co-
nomique international, h l’av~nement d’un r6gime international global r6gissant
et les activit6s et le traitement d’acteurs ayant des impacts diversifi6s et parfois
d6cisifs sur les 6conomies nationales et intemationales: les entreprises trans- ou
multinationales.
L’argument central de l’6tude est t l’effet que vu l’absence – pour des raisons
de consensus parmi
historiques, politiques, juridiques et socio-6conomiques –
la communaut6 internationale quant aux r~gles d6taill6es qui devraient r6gir le
traitement ‘des ETN par les pays h6tes, les textes du Code de I’QNU sur le sujet
repr6sentent un modus vivendi r6aliste et acceptable qui 6tablira pour la pre-
mitre fois en droit international les obligations et les droits respectifs de toutes
les parties intervenant dans une relation d’investissement transnational. Malgr6
leur relative impr6cision ou leur insuffisance pr6sum6e ou r6elle, les disposi-
tions du Code de I’ONU sur le traitement des ETN effectuent un accommode-
ment indispensable et 6quilibr6 sur des probl~mes politiquement et 6conomique-
ment complexes et juridiquement impossibles A transcrire dans des fornules de
droit tr~s pr6cises. I1 est conclu de l’analyse tant bien de l’esprit que de la lettre
de tels textes que ces derniers devraient accueillir l’assentiment des ttats qui
leur opposent encore une fm de non-recevoir afm de permettre l’adoption du
Code sans laquelle les 6nonces en question ne pourraient &re approfondis et
perfectionn~s A la lumi~re de l’exp6rience pertinente et ce, dans l’intr8t com-
pris h long terme de tous les protagohistes.
L’6tude analyse les textes proposes par la Commission des soci6t6s transnatio-
nales en vue de r6soudre les questions en suspens dans le Code de I’ONU sur
les STN. Elle d6montre leur pertinence tant en termes de leur contenu juridique
qu’en termes de satisfaction des int6r~ts et thses 6tatiques sur les sujets com-
plexes dont ils traitent (r6f6rence au << droit international >> pour le traitement des
firmes 6trang~res, traitement national, nationalisation et indemnisation, r~gle-
ment des diff6rends d’investissement, etc.). Vu qu’ils r~alisent un compromis
raisonnable dans lequel toutes les parties A un investissement transnational trou-
l’absence de raison juridiquement valable per-
veront inter&, l’6tude conclut
l’adoption du Code de I’ONU. Ce demier
mettant de persister h s’opposer
‘un des objectifs primordiaux du
demeure une n~cessit6 pour la r6alisation de
nouvel ordre 6conomique international: la r6glementation, convenue au niveau
multilateral global, tant des activit6s que du traitement des entreprises trans- ou
multinationales.

1116

REVUE DE DROIT DE McGILL

[Vol. 38

II. Master’s Theses/M6moires de maitrise

Randy Hammer Abramsky, Reconcilable Regimes -Integrating Statutory and
Collective Bargaining Rights, University of Toronto
Elizabeth A. Adjin-Tettey, The Legal Foundation for a Sustainable Energy in
Developing Countries, University of Calgary

Mehari Gebre Amlak, African Countries and the Conventions on the Control of
Transboundary Movements of Hazardous Waste, Institute of Comparative Law,
McGill University
Didier Ardaine, Concentrations et acquisitions des compagnies aeriennes et
droit communautaire, Institute of Air and Space Law, McGill University
Enid Carolyn Armstrong, The Legal Relationship between Parent Unions and
their Locals: A Study of International Unionism in Canada, Institute of Com-
parative Law, McGill University

Daniel Arnold, King’s Enemies: An Account of the Confiscation and Sale of
Enemy Property in Canada and the U.S. during Periods ofArmed Conflict, Uni-
versity of Ottawa

Howard Baker, Small Claims, Communal Justice, and the Rule of Law in Kings-
ton, Upper Canada c. 1785-1819, Osgoode Hall Law School

Michel Beaupr6, Le lien juridique, medecin-centre hospitalier, Universit6 de
Sherbrooke

Rambod Behboodi, Trade Policy or Trade Politics? International Regulation of
Domestic Industrial Subsidies, University of Toronto

Nathalie-Anne B61iveau, La situation juridique de lafemme enceinte au travail,
Universit6 de Montrdal

Nathalie Bernard, The Legal Liability of Directors and Offices of Corporations
for Environmental Degradation, Dalhousie University

Antoine Bigenwald, L’article premier de la Charte canadienne des droits et
libertds d la lumiere de la Convention europdenne des droits de l’homme, Uni-
versit6 de Montr6al
H61ne Bisson, La coordination du droit des societes entre les pays membres de
la C.E.E., Universit6 Laval
James U. Blacksher, In Search of a Legitimate Politics of Ethnicity: An Ameri-
can’s View of Canada’s Experience, Dalhousie University

Raymond Bodnarek, The Concept of Sustainable Development and its Implica-
tions for Environmental Law, Dalhousie University
Nathalie Bornoz, The New Federal Environmental Impact Assessment Process
in Canada: A Step Towards Sustainable Development?, Institute of Compara-
tive Law, McGill University

1993]

RECENSION DES THESES

1117

Charlaine Bouchard, La rdforme du droit des socitfs: 1’exemple de la person-
nalitj morale, Universit6 Laval

Jonathan Bruneau, Antitrust Law Enforcement within the U.S. Airline Industry,
Institute of Air and Space Law, McGill University
Luc Bruneau, La Commission de lafonction publique di Qudbec: sajuridiction
et ses pouvoirs, Universit6 Laval

Daphne Budge, Recognizing Lesbian Oppression as Sex Discrimination Under
the Charter, University of Ottawa

Holger Buerskens, Copyright Protection of Musical Compositions in the U.S.A.,
Institute of Comparative Law, McGill University

Rosemary L. Cairns Way, The Charter, the Supreme Court and the Invisible Pol-
itics of Fault: A Critical Analysis of the Constitutionalization of Fault, Queen’s
University
Susan Cantlie, An Autonomy-Based Account of Bankruptcy Discharge, Univer-
sity of Toronto

Cao Xin-Guang, A Practical Analysis of International Commercial Arbitration
in the .People’s Republic of China, Queen’s University

Michele L. Caron, Sortir les. Fonctionnaires de l’ Ombre, Dalhousie University

Francis Cheung, The Preparation of Bilingual Legislation in Hong Kong, Uni-
versity of Ottawa

Benoit Coens, The “Hamburg Rules”: Articles 1 to 5.1, Institute of Compara-
tive Law, McGill University

Bradly J. Condon, Making Environmental Studies Trade Friendly Under the
North American Free Trade Agreement, University of Calgary
Barbara Craig, Jurisdiction for Aboriginal Health in Canada, University of
Ottawa

Fiona Cribb, Pay Equity: An Inquiry Into the Legislated Implementation of the
Principle of Equal Pay for Work of Equal Value, University of Saskatchewan

Philip Croes, Trucking Air Cargo: The Application of the Warsaw System to
Bimodal Transport, Institute of Air and Space Law, McGill University

H616ne D’Anjou, Le sida, le droit aux services de santj et l”allocation des res-
sources limit~es, Universit6 de Montr6al

Caroline Desbiens, Government’s Liability for the Control of Air Traffic as well
as the Inspection and Certification of Aircraft, Institute of Air and Space Law,
McGill University
Jean-R6my Desch~nes, La capitalisation des institutions bancaires internatio-
nales d la lumiere des normes de la banque des reglements internationaux et de
la lMgislation de la communaut6 conomique europ~enne, Universit6 Laval

1118

McGILL LAW JOURNAL

[Vol. 38

Patrice Deslauriers, La ddclaration prcontractuelle de risque en droit qugb6-
cois, Universit6 de Montr6al

Balinder Singh Dhillon, The State Role in Occupational Health and Safety
Administration, Institute of Comparative Law, McGill University
Harold Dick, Lawyers of Mennonite Background in Western Canada before the
Second World War, University of Manitoba
Anne Dickson, Judicial Control over Arbitration – Great Britain, Institute of
Comparative Law, McGill University

Marc Doucet, Les pouvoirs des municipalitgs en matiere de sant publique, Uni-
versit6 de Sherbrooke

Marina Drel, The Dispute Settlement in the 1982 United Nations Convention on
the Law of the Sea, Dalhousie University

Madeleine Dussault, De la juridiction extraterritoriale des tribunaux canadiens
en matiere de droit criminel, Universit6 d’Ottawa

David Dzidzomu, The International Law of Marine Environmental Protection
and Preservation: An Analysis with Application to Ghana, University of Cal-
gary

Richard Edwards, The Legal Fact as a Work of Art: Artificial Intelligence and
the Pragmatics of Legal Interpretation, University of British Columbia

Andr6 Emond, Decision politique ou acte d’exicution: un nouveau fondement
d la responsabilitj des autorits publiques, Universit6 Laval

Marc Etcheberry, La situation de l’affriteur/proprigtaire de cargaison au
regard de 1’Oil Pollution Act americain de 1990, Institute of Comparative Law,
McGill University

Andrew Fainer, Social Assistance, Equality and Section 15 of the Charter, Uni-
versity of Ottawa

Dermot K. Feenan, Substitute Decision-Making in Health Care: Who Decides,
and How? A Study of the Law of Ontario, Queen’s University
Feng Yanling, The Law of Security in the People’s Republic of China – An
Emerging Capitalist Device, University of Toronto

John W. Fisher, “Just Thoughts”: Lesbian and Gay Equality Under the Inter-
national Bill of Rights, Queen’s University

Anne Foumier, L’attribution de la garde d’enfants d un tiers en droit qu~bcois,
Universit6 Laval

Anke Frankenberger, Regulations and their Review in the People’s Republic of
China, University of British Columbia
Pascale Gaborieau, L’e volution de l’application extraterritoriale du droit de la
concurrence europ~enne, Institute of Comparative Law, McGill University

1993]

THESIS SURVEY

1119

Sheila Galloway, Land Policy and the Rule of Law in Zimbabwe, Queen’s Uni-
versity

Elaine Catherine Gibson, Injustice to Disabled Women: An Exploration of Law
and Personal Injury, University of Toronto

Pierre Gingras, Le rigime de n~gociation dans le secteur de la santi et des ser-
vices sociaux: bilan et perspectives, Universit6 de Sherbrooke

Oded Goldstein, Franchising: A Comparison of the EEC and US Legislative
Approaches, with Particular Reference to Territorial Exclusivity, University of
Ottawa

Mario Goulet, Le droit disciplinaire des corporations professionnelles. Les
fautes et leur sanction, Universit6 de Montr6al

Gu Xiao-Yu, Legal Protection of Foreign Investment in China, Queen’s Univer-
sity

Sylvette Guillemard, L’ obligation de bonne foi dans les n9gociations des con-
trats internationaux, Universit6 Laval

Guo Liping, Subrogation and Space Insurance – A U.S. Legal Perspective,
Institute of Air and Space Law, McGill University

Jean-Marc Handfield, L’urgence midicale et ses effets sur la responsabiliti
civile, Universit6 Laval

P. Lynne Hanson, Feminist Legal Theories and the Rule of Law, Queen’s Uni-
versity

Sophie Havard, La construction d’une Europe audiovisuelle: l’ad6quation des
politiques menses, Institute of Comparative Law, McGill University

Arimbi Heroepoetri, Environmental Impact Assessment as a Tool Toward Sus-
tainable Developinent in Indonesia (Indonesian and Canadian Legal Perspec-
tives), Dalhousie University

Lasantha Hettiarchchi, The Profound Subtleties of the Warsaw Private Interna-
tional Air Law Regime: Then, Now and Tomorrow, Institute of Air and Space
Law, McGill University

Carol Hilling, Le systdme interam~ricain de protection des droits de la personne
et l’adh6sion du Canada d l’O.E.A., Universit6 de Montreal

Nkonzo Hlatshwayo, The Ideology of Traditionalism and its Implications for
Principles of Constitutionalism: The Case of Swaziland, Osgoode Hall Law
School

Jessie Homer, Sexual Assault: Public Debate and Law Reform, University of
British Columbia

Yolanda Huerta-Casado, Le transfert international de technologie en contexte
mexicain, Universit6 de Montr6al

1120

REVUE DE DROIT DE McGILL

[Vol. 38

Mansour Jabbari Gharabagh, Use of Weapons Against Civil Aircraft: Case Study
of Iran Air 655 in the Light of International Law, Institute of Air and Space
Law, McGill University

Abhimanyu Jalan, Illegal Payments and Multinational Corporations, University
of Ottawa

William W. Johnston, Autonomous Aboriginal Criminal Justice and The Char-
ter of Rights, University of British Columbia

Fr6d6rique Jos, Le regime de responsabilitg du transporteur a~rien interna-
tional envers les passagers et les marchandises: mdcanismes et 6volution de la
limitation, Institute of, Air and Space Law, McGill University

Germano M. Kaulung’ombe, The Feasibility and Utility of a Human Rights
Court for Afi’ican States, Dalhousie University

George Kirnon, Contract Avoidance under the U.N. Convention on Contracts
for the International Sale of Goods: Implications for Commonwealth Caribbean
Trade Law and Practice, Dalhousie University

Howard Knopf, Intellectual Property, Free Trade and the Free Flow of Goods:
A Study of the “Exhaustions” Issue in International Trade, University of Ottawa

Judy Kurcharsky, Sterilization of the Mentally Handicapped is Unconstitutional
and Violates the Quebec and Canadian Charters, Universit6 de Montral

Guy Lachapelle, Les mecanismes de reglement des diffirends dans l’ALENA:
4 la recherche d’un modele, Institute of Comparative Law, McGill University

Nicole Ladouceur, Le contrle des conflits d’intgrets: mesures lMgislatives et
murailles de Chine, Universit6 d’Ottawa

Jocelyn Lafond, The Internationalization of Securities Markets: The Road
Toward Harmonization, University of Toronto

David Lampert, Underlining Equality, the Competing Philosophies in R. v.
Keegstra, University of Toronto

Rosanna Langer, Family Law: Women’s Experiences of Legalized Male Domi-
nance, University of Saskatchewan
Gis~le Laprise, Contrats de distribution intdgr~e: classification et contenu,
Institute of Comparative Law, McGill University

Franqois Lareau, L~gitime defense et th~orie, Universit6 d’Ottawa

Sylvie Latour, La fonction du standard de haute qualitg dans la l9gislation sur
la radio et la tilMvision, Universit de Montreal

Gary Lawrence, Le droit dt l’environnement des fondements thgoriques aux
applications pratiques dans la Charte canadienne, Universit6 Laval

Geoffrey W. Leane, “Environmental Law” or “Development Law”? Decon-
structing Liberal Guilt, University of British Columbia

1993]

RECENSION DES TItSES

1121

Jasmin Lefebvre, L’ indemnisation du gain manqui ne dicoulant pas d’ un prg-
judice corporel, Universit6 Laval

Delphine LeGuen, Merger Control in the European Economic Community,
Institute of Air and Space Law, McGill University

Lyne L6tourneau, L”expirimentation animale: l’homme, les animaux, l’ithique
et la loi dans le monde occidental, Universit6 de Montreal

Ga6tan L6vesque, La responsabilitj civile de l’Etat qu~bgcois envers les vic-
times de pollution, Universit6 de Montreal

William Lobelson, Intellectual Property and Competition Law – A Compara-
tive Approach: EEC and USA, Institute of Comparative Law, McGill University

Michel Locas, Les nouveaux droits de retransmission selon l’accord de libre-
6change et le droit d’auteur canadien, Universit6 de Montr6al

Michel Marchand, La Charte canadienne des droits et libert~s et les fouilles,
perquisitions et saisies a l’ Igard des personnes ditenues en vertu d’ une mesure
p~nale, Universit6 de Montr6al

Jean Marois, Le cadre juridique des contrats de production cin~matographique,
Universit6 de Montr6al

Hugues Marty, Legal Aspects of Space Business from the Point of View of Man-
ufacturers, Institute of Air and Space Law, McGill University

Guy Massicotte, L’article 49 alinja 1 de la Charte des droits et libert6s de la
personne: un recours autonome, Universit6 Laval

Pierre Masson, Le cadre r~glementaire applicable aux subventions ‘i la produc-
tion en droit international, Universit6 de Montr6al

John Mavridis, Material Information and Securities Disclosures under Quebec
Law, Universit6 de Montr6al

Thomas McMahon, Aboriginal Peoples and Discrimination in the Justice Sys-
tem: A Survey of Manitoba Inmates and Related Literature, University of
Ottawa

Luke McNamara, Aboriginal Peoples, the Administration of Justice, and the
Autonomy Agenda: An Assessment of the Status of Criminal Justice Reform in
Canada with Reference to the Prairie Region, University of Manitoba

Maureen A. McTeer, Technology in the Field of Human Reproduction: A
Medical/Scientific Challenge to Canadian Law, Dalhousie University

Carlos Mendez-Lopez, Charter 18 of the Canada-United States Free Trade
Agreement: A Comprehension Analysis and the NAFTA Dimension, University
of Ottawa

Eugene Mensah, Justifying Judicial Review of Discretion, University of Toronto

Jane Heddle Michie, Tax Avoidance – The Canadian Experience, University of
British Columbia

1122

McGILL LAW JOURNAL

[Vol. 38

Brigitte Momeault, La responsabilitj civile du midecin et la stirilisation ei des
fins contraceptives, Universit6 de Sherbrooke
Leigh-Ann Mulcahy, Accountable to Whom? The Changing Role of Corporate
Auditors, Osgoode: Hall Law School

Christian Nadeau, The Regulation of Foreign Direct Investment in Mexico and
the North American Free Trade Agreement, Institute of Comparative Law,
McGill University
Roger Nevry, Le corps humain de la commercialit juridique d la patrimonia-
liti, Universit6 Laval
Anthony C. Ofodile, Judicial Review of Administrative Action: A Comparative
Analysis of Procedural Fairness in Canada and Nigeria, Queen’s University
Adesuwa Omonuwa, The European Communities and African, Caribbean and
Pacific (ACP) Countries: Political, Economic and Legal Effects of the Single
European Act 1986 on Post-1992 Economic Relations, University of British
Columbia
St6phane Ouli, Les vhms et spiritueux au Canada au regard du droit interna-
tional 6conomique, Universit6 de Montr6al
Serge Parisien, Le statut des renseignements jconomiques fournis ei l’adminis-
tration par le secteur priv6 en vertu de la loi qu~b~coise sur l’acces aux doc-
uments des organismes publics, Universit6 de Montr6al
St6phane Perrault, Le droit de vote sous le regime des Chartes canadienne et
qutbicoise, Universit6 de Montr6al

Richard Poliquin, De nouvelles banques dans un nouvel environnement, Univer-
sit6 Laval
Johanne Pomerleau, Le recours aux normes autor~glementaires pour ditermi-
ner la competence des professionnels en soins ifirmiers, Universit6 de Sher-
brooke
Caroline Pratte, Essai sur le rapport entre la soci~tj par actions et ses diri-
geants dans le cadre du Code civil du Qu6bec, Institute of Comparative Law,
McGill University
Sonia Pratte, Le nouvel encadrementjuridique de l’instruction publique prcol-
ligiale au Quebec, Universit6 Laval
Christopher J. Quinn, The Legal Responses to Terrorism: A Study of Constitu-
tional Dictatorship, Extradition and International Law, Queen’s University
Mary-Jo Maur Raycroft, Child Sexual Abuse in Custody and Access Cases,
Queen’s University
Florien M. Reindel, Inter-American Human Rights Protection: How Methods
and Rules of Interpretation are Framed, University of British Columbia

Wolfgang W. Riering, Environmental Obligations and Bankruptcy in U.S.-
American Law, Institute of Comparative Law, McGill University

1993]

THESIS SURVEY

1123

Francis Roche, Les tjlMcommunications et l’accord de libre-6change: un prdc6-
dent pour le GATT, Universit6 Laval-

Leonard Rotman, Duty, the Honour of the Crown and Uberrima Fides: Fiduci-
ary Doctrine and the Crown-Native Relationship in Canada, Osgoode Hall Law
School

Claudine Roy, La th~orie de l’ expectative ligitime en droit administratif, Uni-
versit6 de Montr6al

Nicole Roy, La prise en compte des int~rets 6conomiques corporatifs dans l’ in-
terpr~tation de la Charte canadienne des droits et libert~s. Impact sur la pro-
tection de 1′ environnement, Universit6 de Montr6al

Nicola Jane Rushton, Fundamental Rights and Sex Discrimination: A Compar-
ative Study of British and Canadian Law, Dalhousie University

Abdel Aziz M. Satti, The Concept of Fiduciay Obligations in Business Orga-
nizations: A Proposal for Partnerships and Joint Ventures, University of Sas-
katchewan

Claire Saulais, U.S. and European Product Liability Applied to the Aircraft
Industry, Institute of Comparative Law, McGill University

Chantal Sauriol, Les abus de la libert6 d’ expression: 1′ encadrement juridique
du r6le du critique, Universit6 de Montr6al

Sophie Savin, The Environmental Impact of Aeronautical Activities, Institute of
Air and Space Law, McGill University

Sung Hwan Shin, Montreal Protocols No. 3 and No. 4 in Korean Perspective,
Institute of Air and Space Law, McGill University

Edmund Shollenberg, The Discipline of Doctors in Manitoba, University of
Manitoba

Raymond-Mathieu Simard, La relativitg du concept de l’autonomie des corpo-
rations d’ 6tablissement du rseau de la santj et des services sociaux au Quebec,
Universit6 de Sherbrooke

Michael Somers, Hate Propaganda and Freedom of Expression in a Multicul-
tural Society, Osgoode Hall Law School

Wilhelm Stoffel, Legal Aspects of Aeronautical Mobile Satellite Services, Insti-
tute of Air and Space Law, McGill University

Wendy P. Straker, Issues in International Taxation: A Developing Country Per-
spective, Queen’s University

Lee Stratton, Directors’ Fiduciary Duty of Disclosure to Shareholders in Reg-
ulated Take-Overs, University of Ottawa

Frangois Sylvestre, Pressure on the Oppression Remedy, University of Toronto

Erica Tao, The Hearsay Decisionmaking Environment: An Analysis of the Cat-
egorical and Principled Approaches to the Hearsay Rule, University of Toronto

1124

REVUE DE DROIT DE McGILL

[Vol. 38

Stephen J.A. Tierney, Irrepressible Conflicts: Communitarianism, Constitution-
alism and the Right to Secede, University of Toronto

Christopher Tollefson, Corporate Constitutional Rights: Theory and Doctrine
in the United States and Canada, Osgoode Hall Law School
Tong Cai, Control of Land-Based Marine Pollution in Southeast Asia: A Legal
Perspective, University of British Columbia
Adriana Tripelli, La reprisentation de la victime devant la Cour inter-am~ri-
caine des droits de la personne, University of British Columbia
Pierre Vaugeois, Aspects l~gaux de la compensation des cheques au Canada,
Universit6 Laval
Lucie Voyer, La responsabilitg professionnelle de l’infirmiOre, Universit6 de
Sherbrooke
Patrick Walker, Crown-Aboriginal Fiduciary Relationships: False Optimism or
Realistic Expectations?, University of British Columbia

William Weatherston, Fiduciary Duty in the Relationship of Aboriginal Peoples
and the Canadian Military, University of Ottawa
Xin Kelei, The Role of Law and Policy in the Offshore Petroleum Development
of China, University of British Columbia
Xing Zi, Peiformance Guarantees and Standby Letters of Credit: A Comparison
of Juridical Responses in the U.S., U.K., Germany and France, University of
Toronto

Xue Deming, Interregional Conflict of Laws: A New Agenda for China, Queen’s
University
Yan Xiaoqing, Regulation of Foreign Investment in Chinese Law, Institute of
Comparative Law, McGill University
Yan Yibing, China and GATT. A Unique Case, University of British Columbia
Ye Jin, The Future of Foreign Arbitration in China, Queen’s University
Yin Li, A Comparative Study of the Contract Remedy Systems Between Anglo-
American Law and Chinese Law, University of British Columbia
Yu Hui, Environmental Liability for Carriage of Hazardous Substances/Wastes
by Sea, Dalhousie University