Public International Law - 'Customary International Law'. International Air Transport Association v. Canadian Transportation Agency
In International Air Transport Association v. Canadian Transportation Agency (Fed CA, 2022) the Federal Court of Appeal considered the issue of 'impermissible extraterritorial application', "a well established principle of customary international law":
B. Are any of sections 5-8, 10(3), 11(3)-(5), 12(2)-(4), 13-18, 23 or 24 of the Regulations ultra vires the CTA insofar as they apply to international service because of an impermissible extraterritorial application?The court applies these principles to the facts of the case in para 177-184.
 The appellants submit that the Regulations have impermissible extraterritorial effects that violate the territorial sovereignty of foreign states. Respect for the territorial sovereignty of foreign states is a well established principle of customary international law, and as such it is binding on Canada: Hape at para. 46; R. v. Terry, 1996 CanLII 199 (SCC),  2 S.C.R. 207 at para. 16 [Terry]; The Case of the S.S. "“Lotus”" (1927) P.C.I.J. (Ser. A) No. 10, at p. 18 [Lotus]. This principle is further reflected by the 1944 Chicago Convention, to which Canada is a party. Article 1 of the Chicago Convention states that "“[t]he contracting States recognize that every State has complete and exclusive sovereignty over the airspace above its territory”". As a result, section 86.11 of the CTA must be interpreted in a manner that respects this obligation; yet, the appellants claim, several provisions of the Regulations attempt to regulate the conduct of foreign air carriers while they are located in the territories of foreign states, thereby rendering them ultra vires the regulation-making authority granted by Parliament. At the hearing, the appellants clarified that they have no issue with flights coming in or departing from Canada; their extraterritoriality argument is limited to flights operating entirely outside of Canada and connecting two foreign states. They have also amended the order sought to reflect the narrower scope of their argument.
 The starting point of any analysis on the limits of state jurisdiction is the decision of the Supreme Court in Hape. At issue in that case was whether the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 could apply extraterritorially to prevent searches and seizures by Canadian police officers in foreign jurisdictions, and thus exclude evidence that had been so collected. Examining the principle of territoriality, the Court explained that international law - particularly the customary principle of state equality - sets the limits of state jurisdiction, while domestic law determines "“how and to what extent a state will assert its jurisdiction within those limits”" (Hape at para. 59). The primary basis upon which a state can assert jurisdiction is territoriality: as a result of its territorial sovereignty, a state has full authority to exercise prescriptive, enforcement and adjudicative jurisdiction over all matters arising and people found within its borders.
 As the Court noted, jurisdiction is not an issue when a dispute is wholly contained within the territory of one state. Claims for jurisdiction can arise on grounds other than territoriality, however, and nationality is the most frequent of these other grounds. The interplay between territoriality and other principles justifying jurisdiction are central to the issue of whether extraterritorial exercise of jurisdiction is permissible. While states may have valid concurrent claims to jurisdiction, the exercise of one state’s jurisdiction cannot infringe on the sovereignty of other states. In the event of concurrent claims, "“comity dictates that a state ought to assume jurisdiction only if it has a real and substantial link to the event”" (Hape at para. 62).
 The Court went on to add, relying on the decision of the Permanent Court of International Justice in Lotus, that extraterritorial jurisdiction is governed by international law, and not by the laws of individual states. Comity is not necessarily offended by extraterritorial prescriptive jurisdiction or even where a state’s courts assume jurisdiction over a dispute that occurred abroad, but enforcement by a state of its laws within the territory of another state is more problematic absent the consent of the other state: Hape at para. 65; Terry at para. 15.
 There is no doubt that Parliament has the authority to make laws having extraterritorial effects. This has been explicitly recognized by section 3 of the Statute of Westminster, 1931 (U.K.), 22 Geo.5, c. 4, and Canada has exercised that power on several occasions especially in criminal legislation (see, for ex., the Crimes Against Humanity and War Crimes Act, S.C. 2000, c. 24, which addressed crimes of "“universal jurisdiction”"). These statutes, however, do not authorize Canada to enforce their prohibitions in a foreign state’s territory. Although the Supreme Court recognized Parliament’s authority to pass legislation that would regulate the conduct of non-Canadians outside of the country (Hape at para. 68), these laws cannot be enforced in another country without the consent of the host state because it would violate international law and the comity of nations.
 Although Parliament clearly has the plenary authority to enact legislation that applies extraterritorially, it must do so through clear words or by necessary implication; otherwise, Parliament is presumed not to intend to do so: Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, 2004 SCC 45,  2 S.C.R. 427 at para. 54.