OK, so Kath's ability states that:

When attacking, the defender receives 1 stress token if he cancels at least Crit 1 result.

Merc C-P: When attacking at Range 3, you may change one of your hit results to a Crit result.

ion cannon: Attack 1 ship. If this attack hits the target ship, the ship suffers 1 damage and receives 1 ion token. Then cancel all dice results.

So how would it work if after shooting with the ion cannon at range 3 (triggering MCP) an uncancelled crit remains to trigger the ion effect?

The rules state that all remaining dice results are cancelled after the ion effect is triggered, so does that mean that the crit is considered cancelled in the normal way so Kath's ability then triggers dealing a stress on top of the ion?

Seems obvious I know, but I can see someone objecting as the cancellation of the crit happens in a slightly unusual way - i.e not as a result of rolling defence dice

When attacking, the defender receives 1 stress token if he cancels at least Crit 1 result.

Emphasis mine.

For Kath to trigger, the defender needs to cancel the crit result. The Ion Cannon is not the defender, so Kath's ability doesn't care about it cancelling the dice results.

Ok that makes sense.

So an attack roll of 1 hit and 2 crits answered with 2 evades and a blank would deal stress and ion, but 2 hits and 1 crits would not as the crit is not cancelled by the defender.

Ok that makes sense.

So an attack roll of 1 hit and 2 crits answered with 2 evades and a blank would deal stress and ion, but 2 hits and 1 crits would not as the crit is not cancelled by the defender.

Correct.

just a quick fallow up does it matter how the defender cancles the crit?

just a quick fallow up does it matter how the defender cancles the crit?

No. It just has to be the defender cancelling the crit so it doesn't hit. That will trigger Kath's stress ability.

just a quick fallow up does it matter how the defender cancles the crit?

No