Executive Summary: Key Legal and Evidentiary Issues

• Enforceability of an exclusive U.S. forum selection and choice of law clause in a marine insurance policy against a Quebec-based dispute.
• Scope of article 3150 C.c.Q. and whether Quebec courts retain mandatory jurisdiction over insurance disputes despite a foreign jurisdiction clause.
• Ability of non-signatory entities (claims administrator and broker) to benefit from the policy’s forum selection clause when sued as if they were insurers.
• Limits of the court’s discretion to ignore a valid forum clause for reasons of proportionality, efficiency, or “multiplicity of insurance layers.”
• Application of forum non conveniens to an insurance dispute with overwhelmingly U.S. factual and evidentiary connections.
• Availability of interim relief (Wellington-type order and article 3138 C.c.Q. provisional measures) to force defence funding where Quebec lacks or declines jurisdiction.

Factual background

In July 2024, a catamaran owned by 9285-6111 Québec inc. was damaged while in Bahamian waters. At the time of the incident, the vessel was being operated by Dream Yacht Charter (DYC) under a management agreement between 9285 and DYC. Following the casualty, the vessel was towed to Florida for repairs. The catamaran was insured under a marine insurance policy issued by ION Insurance Group, S.A. Both DYC and Louis-Yves Cloutier (the individual shareholder of 9285) were named as insured parties on the policy. The insurer denied coverage on the basis that the loss occurred at night while the vessel was at anchor, an activity ION argued fell outside the policy’s coverage.

In March 2025, 9285 and Cloutier commenced the principal action in Quebec Superior Court against DYC. They claimed the cost of repairing the vessel and damages for loss of profits, grounding their suit in the management contract, which contained a forum selection clause in favour of Quebec courts.

Insurance relationships and third-party proceedings

The insurance relationships were more complex than a simple bilateral insurer–insured contract. ION was the insurer that underwrote the risk, Keane Specialty Insurance LLC acted as ION’s claims administrator, and Lucantha Marine Insurance LLC, trading as Flagship Marine Underwriters, was the insurance broker that issued the insurance certificate. After being sued by 9285 and Cloutier, DYC, in July 2025, instituted an action in warranty (third-party proceedings) against ION, Keane, and Flagship. DYC alleged that the loss was covered and that its claim should not have been denied, and it sought to have the defendants in warranty indemnify it for any amount that might ultimately be awarded against DYC in the principal action. DYC also filed a Wellington-type application, seeking an order compelling ION, Keane, and Flagship to assume its defence costs in the main proceedings on an ongoing basis.

Key policy terms and jurisdiction clause

The marine policy included a combined choice of law and forum selection clause. For policies underwritten by ION, it provided that the policy would be governed and construed in accordance with the law of the United States of America, and that the courts of the United States of America would have exclusive jurisdiction to resolve any dispute or claim arising out of or in connection with the policy, including non-contractual claims. The court emphasized that the use of “shall” and “exclusive jurisdiction” made the clause both mandatory and exclusive, and the language “any dispute or claim arising out of or in connection with your policy or its subject matter or formation” was sufficiently broad and precise to encompass the coverage dispute and the claimed duties to defend and indemnify. The certificate of insurance issued by Flagship contained its own “Jurisdiction” clause, stating that the policy was governed by U.S. law and that U.S. courts would have exclusive jurisdiction to determine any dispute. However, that clause was incomplete in its wording and, standing alone, was not considered precise enough to oust the jurisdiction of Quebec courts. The court therefore grounded its analysis primarily in the jurisdiction clause embedded in the ION policy itself.

Interaction between the forum clause and Quebec’s jurisdictional rules

DYC argued that article 3150 C.c.Q. grants Quebec courts non-derogable jurisdiction over actions “founded on a contract of insurance” whenever, among other things, the insured, policyholder, or beneficiary is domiciled in Quebec or the insured interest is located there, and that this mandatory jurisdiction trumped any forum selection clause. The court rejected that position. It stressed the central role of party autonomy in Quebec private international law and noted that where the legislature wishes to make jurisdiction mandatory and non-waivable, it does so expressly, as in articles 3149 (consumer and employment contracts) and 3151 C.c.Q. By contrast, article 3150 C.c.Q. states that Quebec authorities “also” have jurisdiction in insurance matters, signalling an additional, not exclusive, head of competence. The court held that article 3150 C.c.Q. does not prevent parties to an insurance contract from agreeing to a foreign forum by way of a clear and exclusive jurisdiction clause under article 3148, al. 2 C.c.Q. In arriving at this conclusion, the judge aligned with the majority doctrinal view and with earlier case law upholding arbitration or foreign forum clauses in insurance policies, including cases such as Mega Bloks and the Allianz COVID-19 business interruption litigation, where courts allowed arbitration or foreign jurisdiction clauses to prevail over article 3150 C.c.Q.

Effect of the jurisdiction clause on the claim against ION

On the facts, DYC’s third-party claim against ION sought enforcement of ION’s obligations under the insurance policy: coverage for the loss, indemnity for any condemnation in the main action, and the duty to defend DYC in Quebec. The court found that these issues plainly constituted “dispute or claim arising out of or in connection with” the policy. Given the mandatory and exclusive forum clause in favour of U.S. courts, Quebec Superior Court had no jurisdiction to hear the action in warranty or the Wellington-type application against ION. The court also dismissed DYC’s attempt to avoid the clause by invoking the complexity of the “multi-layered” insurance and the presence of related entities like Keane and Flagship. Efficiency and proportionality considerations, including the desire to decide all related insurance issues in a single Quebec proceeding, could not override a valid and exclusive forum selection clause. Relying on Supreme Court authority, the judge held that party autonomy and legal certainty in international transactions prevail over purely procedural considerations such as judicial economy and avoidance of multiplicity of proceedings.

Application of the clause to Keane and Flagship

DYC further contended that Keane and Flagship could not rely on the forum selection clause because they were not signatories to the policy. As a general rule, contracts produce effects only as between the parties, and third parties cannot typically invoke a clause such as a forum selection clause in a contract to which they are not party. However, the court found the circumstances here to be exceptional. In its pleadings, DYC expressly characterized Keane and Flagship as “liability insurers under policy EW1007724” and alleged that they were bound to defend and indemnify DYC by virtue of that policy, without articulating any separate fault-based or non-contractual causes of action against them. The court noted that DYC had not pleaded any distinct oral or collateral contract with Keane or Flagship, and that there were no allegations of independent wrongdoing in the placement of coverage or the handling of the claim. The entire theory of liability against Keane and Flagship was that they stood in the shoes of the insurer under the policy and were obliged to perform policy-based duties to defend and indemnify. In these circumstances, the court held that DYC’s recourse against Keane and Flagship was “exclusively founded on the insurance policy” and aimed solely at obtaining the benefit of insurance coverage. It therefore fell squarely within the scope of the policy’s forum selection clause, which stipulated that all disputes relating to the policy must be brought before U.S. courts. The clause was held to operate for the benefit of all defendants in warranty, including Keane and Flagship, despite the fact that they were not formal parties to the policy document.

Forum non conveniens as an alternative basis to decline jurisdiction

Although the judge concluded that the jurisdiction clause already deprived Quebec courts of competence over the proceedings against Flagship, she analysed, in the alternative, whether Quebec should decline jurisdiction by applying the doctrine of forum non conveniens in favour of U.S. courts. She reviewed the usual non-exhaustive factors: domicile of parties and witnesses, location of evidence, place of formation and performance of the contract, applicable law, existence of parallel foreign proceedings, location of the defendant’s assets, and overall interests of justice and of the parties. On the evidence, both DYC and Flagship were domiciled in the United States, and the witnesses and documentary proof regarding the issuance of the insurance, the policy wording, underwriting of the risk, and the coverage decision were all located there. The policy was solicited, negotiated and concluded in the United States, the offer of insurance was made and accepted there, and the policy and certificate were issued there. The denial of coverage decision was also made and communicated in the United States. The court recognized that the duty to defend, if ultimately found to exist, would be performed in Quebec, where DYC faces the principal action, and that the vessel’s owner, 9285, is a Quebec entity. However, these links to Quebec were outweighed by the concentration of parties, witnesses, and evidence in the United States and by the fact that the applicable substantive law to the insurance dispute is U.S. law, both because of the policy’s express choice of law and under Quebec’s conflicts rules even absent an express clause. The court underscored that any claim DYC must pursue against ION following this judgment will necessarily be brought in the United States, and that the questions of coverage and the scope of any duty to defend and indemnify will be litigated there. Hearing an overlapping claim against Flagship in Quebec would risk inconsistent rulings on the same coverage issues. Additionally, Flagship appeared to have no assets in Quebec, so any favourable Quebec judgment for DYC would still require recognition and enforcement proceedings in the U.S. courts. Conversely, a U.S. judgment in DYC’s favour would be directly enforceable against Flagship’s assets without additional Quebec procedures. Taking all factors together, the court held that the United States was clearly the more appropriate forum and that, had jurisdiction not already been ousted by the policy clause, Quebec would in any event have declined jurisdiction under article 3135 C.c.Q. on grounds of forum non conveniens, at least as regards Flagship.

Provisional relief and the Wellington-type application

As a fallback, DYC sought interim relief by invoking article 3138 C.c.Q., which allows Quebec courts to order provisional or conservatory measures even when they lack jurisdiction over the merits. DYC asked the court to compel ION to provisionally fund its defence costs in the principal action until U.S. courts could decide the coverage dispute, effectively seeking a temporary Wellington-type order. The court declined to grant such relief. It held that article 3138 C.c.Q. is confined to genuinely provisional or conservatory measures, designed to urgently safeguard parties’ rights pending adjudication by the competent forum. DYC failed to show any urgency or irreparable prejudice sufficient to justify an interim order forcing ION to assume defence costs. The court found no evidence that DYC could not defend itself in the principal action without that funding, and any prejudice it might suffer by bearing its own defence costs in the meantime could be compensated later by a monetary award if a competent U.S. court ultimately determined that the insurer owed a duty to defend. On that basis, the request for interim relief was refused and the incidental Wellington-type application was dismissed.

Outcome and successful parties

In its dispositive orders, the Quebec Superior Court allowed the preliminary declinatory exception of ION Insurance Group, S.A. and Keane Specialty Insurance LLC, and granted the motion to dismiss brought by Lucantha Marine Insurance LLC (Flagship Marine Underwriters). It dismissed DYC’s third-party action in warranty and rejected its incidental Wellington-type application seeking to compel the insurance-related defendants to assume its defence and hold it harmless. Court costs were awarded (“avec frais de justice”), but the decision did not specify any concrete monetary amount for either costs or damages. As a result, the successful parties in this judgment are ION, Keane, and Flagship, who obtained dismissal of DYC’s warranty and Wellington-type claims in Quebec. No specific quantum of damages, indemnity, or defence costs was ordered or quantified in their favour, and only non-specified legal costs were granted, so the total monetary amount awarded cannot be determined from the decision.