## Facts

- Canadian cargo interests owned cargo carried on the Canadian steamer *Yorkton*.
- The *Yorkton* collided on Lake Superior (on the U.S. side of the international boundary) with the Canadian steamer *Mantadoc*, owned by a Canadian company, and the *Yorkton* sank.
- Both vessels were Canadian-owned and Canadian-registered, and the voyage was between Canadian ports.
- Canada conducted a statutory maritime investigation that found both vessel masters at fault.
- The shipowner began a proceeding in Canadian admiralty court to determine liability between the vessels and their owners.
- The cargo owners filed in personam admiralty libels in a U.S. federal district court and obtained jurisdiction through foreign attachment of the shipowner’s property in New York.
- The cargo owners sought to benefit from a U.S. rule permitting full recovery by an innocent cargo owner against the non-carrying vessel, rather than a Canadian rule that could limit recovery where both vessels are at fault.
- Material witnesses (officers and crews) were Canadian residents.

## Issues

1. Whether a U.S. district court sitting in admiralty abuses its discretion by declining jurisdiction and dismissing suits between foreign parties arising from a collision in U.S. waters, where related litigation is pending in a foreign admiralty court.
2. Whether the district court may condition dismissal on the defendant’s appearance and posting of security in the foreign proceedings to preserve the practical benefit of the U.S. attachment.

## Decision

- The Supreme Court affirmed the dismissal of the libels.
- A district court in admiralty ordinarily has discretion to refuse jurisdiction in suits between foreigners, and appellate courts will not reverse absent an abuse of discretion.
- The discretion to decline jurisdiction applies even when the cause of action arose in the United States.
- The district court acted within its authority by conditioning dismissal on the defendant’s appearance and provision of security in the Canadian admiralty litigation so the cargo owners would not lose the protection gained by attachment.

## Legal Principles

- In admiralty suits between foreign parties, a federal district court may, as a matter of discretion, decline to retain jurisdiction.
- The fact that a maritime tort occurred in U.S. waters does not eliminate that discretion.
- In deciding whether to dismiss, courts may consider connections to the foreign forum (nationality of parties and vessels, locus of voyage), convenience of witnesses, and the existence of pending foreign proceedings concerning the same controversy.
- A court may impose conditions on dismissal—such as requiring appearance and security in the foreign forum—to prevent prejudice from loss of attached security.
- Review of such dismissals is limited to whether the district court abused its discretion.

## Conclusion

The Court held that U.S. admiralty courts may dismiss a dispute entirely between foreign parties, even for a collision in U.S. waters, when a foreign forum with stronger connections is available and already engaged, and it approved conditioning dismissal on security in the foreign proceeding to protect the plaintiffs’ ability to collect.


Canada Malting Co. v. Paterson S.S., Ltd., 285 U.S. 413 (1932)