In Shanghai Investment Co. Ltd. V. Lu et al. 2024 ONSC 2762, the Ontario Superior Court of Justice (Commercial List), allowed a foreign arbitral award to be recognised and made enforceable as a partial summary judgment. The Plaintiff, Shanghai Lianyin Investment Co Ltd. (“SLIC”) sought the recognition and enforcement of a CAD $233 million arbitral award rendered under the rules of the China International Economic and Trade Arbitration Committee (“CIETAC”) against the Defendant Zheng Yao Lu (“Lu”) as a threshold matter; and a declaration that the other defendant, Lichun Guo (“Guo”) held her interest in two properties in Ontario on behalf of Lu, and that SLIC could enforce its award against these properties. The court found that the CIETAC award should be recognised and made enforceable as both of the following requirements under Articles IV and V of the New York Convention (incorporated in the International Commercial Arbitration Act, 2017, S.O. 2017, c. … Read More
Letters of credit and the fraud exception: Supreme Court examines applicability to fraud by a third party
A letter of credit or a bank guarantee is an autonomous instrument that is issued by a financial institution on the directions of a customer. The letter of credit seeks to underwrite the customer’s obligations to the beneficiary under the distinct underlying contract. It entitles the beneficiary to payment on demand from the issuing bank, so long as that demand strictly complies with the requirements set out in the letter of credit. The obligation of the financial institution to pay when presented with a valid demand is near absolute. The only recognized exception in Canadian law is when there is fraud by the beneficiary that is brought to the financial institution’s attention prior to payment. In Eurobank Ergasias S.A. v. Bombardier Inc. 2024 SCC 11 (CanLII), the Supreme Court of Canada examined a critical issue of when an issuing bank is required to refuse to honour a demand for payment … Read More
Popack v. Lipszyc: Recognition and Enforcement of Arbitration Awards – Clarifying the term “binding”
Popack v. Lipszyc appears to be the first Ontario Court of Appeal case on the recognition and enforcement of arbitration awards under the 2017 International Commercial Arbitration Act (“ICAA”). The ICCA includes the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and the 2006 amended version of UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). The appellants used articles 35 and 36 of Model Law to apply for the recognition and enforcement of the international commercial arbitration award they received in August 2013 against the respondents. While the application judge dismissed the application, the Court of Appeal allowed the appeal. The Court of Appeal stated that “in Ontario, a strong “pro-enforcement” legal regime” exists for the recognition and enforcement of international commercial arbitration awards, as grounds for refusal are “to be construed narrowly”. Importantly, the Court, and not the tribunal, is the proper avenue to … Read More
Shifting The Status of Interlocutory Injunctions: Google v. Equustek Solutions
The very interconnectedness of the Internet that drives business forward through marketing and access to broader consumer bases may result in loses that currently are not easily remedied. However, jurisprudential shifts are occurring to bridge gaps in the common law that are prevalent in the new age of technology. Google v. Equustek Solutions is a recent decision that potentially expands the scope of interlocutory injunctions in order to ensure that trademark passing-off does not continue to be facilitated, even if unintentionally, by a non-party. Equustek was entitled to an interlocutory injunction to enjoin Google from displaying Datalink’s websites on any of its search results worldwide, and despite Google’s appeal, the decision was upheld by the Supreme Court of Canada in a 7-2 decision. Justice Abella, writing for the majority, emphasized the importance of deference and discretion with regards to interlocutory injunctions, which is highly context-driven to ensure just and equitable outcomes (para 22). The Court found the three-part test in RJR – MacDonald … Read More
Grounds for Judicial Intervention on International Arbitral Awards – Key Takeaways
In Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., a decision of the Court of Appeal for Ontario, a USD$258 million project for the construction of a slurry pipeline from a nickel mine in the mountains of Madagascar to the coast lead to arbitration between the appellant (the contractor) and the respondent (tendered the project). After mutually agreeing to by-pass the adjudication stage of their three-stage dispute resolution process and go straight to a Tribunal, the appellant was only awarded $7M of its $91M claim and the respondent was awarded nearly $25M on its counterclaim. These awards were challenged on appeal as being made without jurisdiction, in breach of procedural fairness, and violating public policy. However, the appeal was dismissed. Judicial intervention in international arbitral awards under the United Nations Commission on International Trade Law (UNCITRAL) Model Law (the “Model Law”) – though given the force of law by the International Commercial Arbitration Act … Read More
Greater Harmonization of International Commercial Arbitration Laws
Legislation based on the UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006 (the “Model Law”) has been adopted in 78 States of a total of 109 jurisdictions, including Canada, Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan and Yukon. The legislation in Ontario, Canada, amends previous legislation based on the Model Law and is based on the text, with amendments as adopted in 2006, of the UNCITRAL Model Law on International Commercial Arbitration. Recent jurisdictions to enact Model Law legislation include: In 2017: Australian Capital Territory, Fiji, Jamaica, Mongolia, Qatar, and South Africa. In 2016: Myanmar, Republic of Korea, and Uganda. The continued expansion of an already substantial number of jurisdictions enacting Model Law legislation means even greater harmonization of national laws through all stages of the commercial arbitration process, from the arbitration agreement itself, to the recognition and … Read More