Saskatchewan – court delivers no-fuss recognition of default foreign arbitral award – #048

Saskatchewan’s Court of Queen’s Bench in Parrish & Heimbecker Ltd. v Bukurak, 2017 SKQB 322 provided a proof-of-concept application of Saskatchewan’s embrace of international commercial arbitration in its straightforward review and grant of an application to recognize and enforce a foreign arbitral award. 

Parrish & Heimbecker Ltd. (“Claimant”) and Dale Bukurak (“Respondent”) signed a June 23, 2014 purchase contract for 40 tonnes of grain for delivery during a specific period and at a set price.  Respondent failed to deliver the grain as agreed to by the contract.

The contract contained an arbitration clause.  The parties agreed to refer their “claims” to arbitration under the Arbitration Rules issued by the National Grain and Feed Association (“NGFA”), based in Arlington, Virginia.

Claimant submitted its claim to arbitration on January 6, 2016.  The NGFA prepared an Arbitration Services Agreement but only Claimant signed and returned it.  Respondent exchanged with the NGFA but never returned a signed copy and did not participate in the subsequent hearing.

The NGFA issued an April 25, 2017 default judgment against Respondent in favour of Claimant.

Madam Justice C.L. Dawson identified Saskatchewan’s existing legislative embrace of international commercial arbitration, pointing to the province’s The Enforcement of Foreign Arbitral Awards Act, 1996, SS 1996, c E-9.12 and The International Commercial Arbitration Act, SS 1988-89, c I-10.2.

She noted that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1985) (“New York Convention”) and the UNCITRAL Model Law on International Commercial Arbitration, UNCITRAL, UN Doc A/40/17 (“Model Law”) apply in Saskatchewan by virtue of that province’s express adoption, “so long as the arbitral award in question derives from a commercial relationship”.  She gave a nod to West Plains Company v. Northwest Organic Community Mills Co-Operative Ltd., 2009 SKQB 162 and BWV Investments Ltd. v. Saskferco Products Inc., 1994 CanLII 4557 as examples of the courts’ confirmation.

Acknowledging Claimant’s burden to establish that it met the legislative requirements set by Saskatchewan to obtain recognition of the NGFA final award, Dawson J. reviewed the familiar criteria applicable to recognition and applied the particular facts of the case to the criteria.

Dawson J. did pause to observe that she did have authority to refuse to recognize a foreign award such as the NFGA but only saw one potential exception.  That exception arises when the party against whom the award was issued was unable to present its case.  Dawson J. was open to receiving evidence on this exception and gave Respondent the opportunity to do so.

Here the evidence is that the respondent did not properly respond to the NGFA’s correspondence and therefore a default judgment was entered against him. If there was evidence that would identify a reasonable and comprehensive excuse for the respondent’s failure to respond, this exception could potentially be triggered. However, as stated in West Plains, Article V requires the party resisting enforcement of the award to prove the applicability of one of the exceptions to enforcement. While the respondent appeared in chambers in opposition to this application, he presented no evidence on this point. The respondent was asked whether he would like an opportunity to provide evidence, but he declined to do so.

Having found that all the requirements for recognition and enforcement of the NGFA award had been satisfied, Dawson J. recognized and enforced that award as a binding and enforceable award in Saskatchewan, converting the award amount into Canadian currency and granting pre-judgment interest thereon under Saskatchewan’s Pre-judgment Interest Act, SS 1984-85-86, c P-22.2.