In Lochan v Binance Holdings Limited, 2025 ONSC 6493, the Court granted an anti-suit injunction that prevents Binance Holdings Limited (“Binance”) and affiliates from pursuing arbitration in Hong Kong against the representative plaintiffs in a certified class action in Ontario. The Court determined that Binance was using an affiliated entity, Nest Services Limited (“Nest”), as an alter ego to bypass previous Ontario rulings that found the arbitration clause in its contract with members of the class to be unconscionable and void.
The injunction followed several earlier Ontario decisions (2023 ONSC 6714 and 2024 ONCA 784), which found Binance’s arbitration clause to be unconscionable and void because the Hong Kong forum was prohibitively expensive and inaccessible to class members. Despite those decisions, Nest initiated a Hong Kong arbitration in November 2025, alleging that the Ontario plaintiffs had breached their contractual obligations by commencing the Ontario class action and seeking indemnity for all costs and any eventual damages arising from the Ontario litigation.
The Court held that private arbitration does not engage international comity in the same way as foreign court proceedings, and that the competence‑competence principle was displaced by earlier Ontario findings of unconscionability. Accordingly, the Court restrained Binance, Nest, and its affiliates from continuing the Hong Kong arbitration. The Court also found that the Hong Kong arbitration was a collateral attack on the Ontario decisions, designed to render them ineffective, and that Nest was effectively an alter ego of Binance.
Background – The litigation between the parties has a significant procedural history in Ontario:
- Binance 2023: In 2023 ONSC 6714, Binance moved to stay the Ontario proceedings in favour of arbitration in Hong Kong. The motion judge dismissed the stay, finding the arbitration clause void as contrary to public policy and unconscionable. In 2024 ONCA 784, the Court of Appeal upheld this decision, noting that the high cost of accessing the Hong Kong tribunal (approximately $36,000) compared to the average investor’s claim ($5,000) rendered the forum effectively inaccessible. The Court of Appeal decision was previously discussed one of my earlier Case Notes (Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814 – Arbitration Matters).
- Binance 2024: In 2024 ONSC 2302 (aff’d 2025 ONCA 221), the Ontario action was certified as a class action on behalf of Canadian investors who purchased cryptocurrency derivative products through Binance. The claim alleges that Binance traded in and distributed securities without complying with the Securities Act.
Despite the 2023 ruling declaring the arbitration clause void, in November 2025, Nest, a Seychelles corporation acting as a “Binance Operator”, commenced arbitration against the representative plaintiffs in Hong Kong. Nest alleged that the plaintiffs had breached the arbitration clause in their contract by initiating the Ontario class action.
In the Hong Kong arbitration proceedings, Nest sought a declaration that the plaintiffs in the Ontario action had breached their agreement with Binance, an indemnity for all legal costs, and any damages the Ontario court might eventually award the plaintiffs. Binance argued that Nest was a separate legal entity not bound by previous Ontario rulings and that the cause of action in Hong Kong (breach of contract) was distinct from the Ontario claim (securities law violations). Nest’s position was that since its creation, it has been part of “Binance” or a “Binance Operator” and is part of the Binance “ecosystem”.
The decision – There were three legal issues before the Court:
- (1) Prematurity and Comity: Whether the plaintiffs were required to challenge jurisdiction before the Hong Kong arbitral tribunal before seeking an injunction in Ontario.
- (2) Collateral Attack: Whether the Hong Kong arbitration constituted a collateral attack on the previous Ontario decisions.
- (3) Injunction: Whether an anti-suit injunction could bind Nest, a non-party to the Ontario action.
(1) Prematurity and Comity – Binance argued that a Canadian court should not interfere with a foreign tribunal’s jurisdiction until that tribunal has had a chance to rule on its own competence, citing the principle of international comity (the respect courts show for the laws and judicial decisions of other sovereign states) (at para. 23). The Court rejected this for two reasons:
- Arbitration is not a sovereign act: “Private arbitral proceedings, unlike judicial proceedings, do not implicate state sovereignty”. Therefore, an injunction prohibiting an arbitration does not implicate state comity in the same way an injunction against a foreign court would (at para. 25).
- Existing precedent: The Court cited Axion Ventures Inc. v. Bonner, 2024 BCSC 45 for the proposition that even if there is a strict requirement to seek a jurisdictional ruling from a foreign court first, that requirement does not extend to foreign arbitration proceedings (at para. 25).
The Court addressed the “competence-competence” principle, pursuant to which generally a tribunal decides its own jurisdiction at first instance. This principle did not apply here because in the previous Binance 2023 ruling, the Ontario courts had already determined the forum was inaccessible, and it would be equally unconscionable to force plaintiffs to travel to Hong Kong to argue the issue of jurisdiction (at para. 26).
(2) Collateral Attack – The Court found that Nest’s Hong Kong arbitration was a collateral attack on the Binance 2023 ruling, as it was “an attempt made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment” (at para. 32). Collateral attacks are, by definition, abuses of the court’s process.
By seeking findings in Hong Kong that conflict with the Ontario court’s rulings, the defendants were undermining the principles of judicial economy, finality, and the integrity of the administration of justice (at para. 35).
Importantly, the Court observed that Nest was seeking an indemnity for all legal and procedural costs incurred in the Ontario class action, and any adverse judgments or settlements arising from the Ontario proceedings (at para. 36).
The Court found this a “claw back” mechanism, and reasoned that “[i]n commencing arbitration under an arbitration agreement already determined to be unconscionable and contrary to public policy, and in seeking in that forum to claw back – effectively, to neuter – any award by the Court to the Plaintiffs, Binance has taken the very impermissible route against which the Supreme Court warned” (at para. 37).
(3) Injunction – The Court held that the requirements for an anti-suit injunction as set out by the Supreme Court in Amchem Products Incorporated v. British Columbia (Workers’ Compensation Board), [1993] 1 SCR 897were met (at paras. 38-40).
With respect to its jurisdiction over Nest, a non-party to the Canadian proceedings, the Court relied on the fact that “courts have long held that non-parties can be bound by injunctions” (at para. 41). Drawing on Supreme Court of Canada precedents such as MacMillan Bloedel Ltd. v. Simpson and Google Inc. v. Equustek Solutions Inc., [2017] 1 SCR 824, the Court emphasized that:
- If a non-party violates an injunction, they are subject to conviction and punishment for contempt of court.
- Injunctions are not limited strictly to named defendants; all people must obey an injunction on pain of contempt.
Binance argued that Nest was a separate legal entity and thus not bound by the previous Ontario rulings. The Court rejected this, considering that Nest “has placed itself in Binance’s shoes in its Notice of Arbitration; it equally stands in Binance’s shoes for the purposes of any injunctive or other relief granted by this Court” (at para. 43).
Disposition – The Court granted the anti‑suit injunction restraining Binance, Nest, and all “agents, parents, subsidiaries, affiliates, assigns, and representatives” from continuing the Hong Kong arbitration, describing the proceeding as a transparent attempt to circumvent Ontario rulings (at para. 44).
Contributors’ Notes:
The decision in Lochan v. Binance underscores the willingness of Canadian courts to intervene when foreign arbitral proceedings are deployed to undermine domestic rulings. Building on Binance 2023 and Binance 2024, the Court’s analysis clarifies three important principles:
- Comity does not shield private arbitration from judicial restraint where arbitration is used to thwart domestic judgments.
- Competence‑competence will not prevent a court from determining jurisdiction where that court has already ruled an arbitration clause invalid as a matter of public policy and access to justice.
- Foreign subsidiaries and affiliates cannot be deployed as procedural shields where their actions operate as proxies for a party already subject to Canadian rulings.
The result in Lochan v. Binance is understandable given Binance 2023 and Binance 2024 and the Court’s concern with access to justice through an arbitration in Hong Kong. That said, some aspects of the reasoning may invite careful reflection from an arbitration perspective.
First, the Court drew a distinction between foreign arbitration and foreign court proceedings when addressing comity. While arbitration is private in nature, it is still anchored to the legal system of its seat, and an injunction against a foreign‑seated arbitration can indirectly affect the role of the courts at that seat.
Further, the finding that the Hong Kong arbitration was a collateral attack rests largely on the practical effect of the relief sought, rather than on an attempt to set aside the Ontario rulings. The arbitration did not explicitly contradict the Ontario rulings by asking the tribunal to revisit issues already determined, such as the validity or enforceability of the arbitration clause or the jurisdiction of the Ontario courts. Instead, Nest sought an indemnity for any Ontario liability arising from the Ontario proceeding, which would have effectively neutralized the consequences of the Ontario rulings. In this way, the arbitration was found to undermine the authority of the Ontario rulings functionally, even though it did not formally dispute them.
Finally, the Court had no trouble in finding that Nest was the alter ego of Binance – a finding that courts have more frequently been reluctant to make. Given that Nest did not explain its ownership or management structure sufficiently for the Court to determine its formal relationship to Binance, the Court relied on Nest’s own attempts to stand in Binance’s shoes to seek its alleged losses in the Hong Kong arbitration – treating their losses as one and the same. This finding is a caution to companies that their actions may ultimately be stronger than their words when courts are determining whether there are separate corporate personalities.
The author thanks Ekin Cinar, an associate at Dentons Canada LLP, for her help in preparing this case note.
See related Case Notes:
Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814
Ontario – Order of competence-competence analysis on stay motion challenged – #880