Québec Archives - Page 3 of 18 - Arbitration Matters

February 14, 2023March 17, 2023

Québec – Court rejects foreign state immunity to award enforcement – #710

In CC/Devas (Mauritius) Ltd v. Republic of India, 2022 QCCS 4785, Justice Pinsonnault rejected the Republic of India’s effort to invoke state immunity in response to an application seeking the recognition and enforcement of two investment treaty awards. He found that the Plaintiffs had met their burden to prove that (1) the commercial activities exception applied, and (2) India had waived state immunity to enforcement proceedings.

November 10, 2022May 12, 2023

Québec – No enforcement of award against alter egos – #681

In a much-anticipated decision, the Québec Court of Appeal overturned Justice Pinsonneault’s first instance decision and quashed the seizure before judgment by garnishment taken against a subsidiary and non-party to an arbitration to answer for the debt of the parent pursuant to an arbitral award. Justice Pinsonneault’s decision was discussed in a previous case note concerning CC/Devas (Mauritius) Ltd. v. Republic of India, 2022 QCCS 7. In Air India, Ltd. v. CC/Devas (Mauritius) Ltd., 2022 QCCA 1264, the Court of Appeal unanimously granted the appeal of the parent, ruling that a foreign award cannot be enforced against a third party’s assets unless it is proven: (1) that the third party is the debtor’s alter ego; and (2) that the third party was used in order to conceal fraud, abuse of right or a violation of a public order rule by the debtor. The Court of Appeal ruled that the applicable criteria for the enforcement of a foreign award against the shareholder of a condemned party were the same as the applicable criteria to lift the corporate veil, as codified at section 317 CCQ. Here, those criteria were not met, and the court did not lift the corporate veil.

November 9, 2022November 4, 2022

Québec – Court dismisses application challenging arbitral tribunal’s joinder of non-signatory – #680

In Newtech Waste Solutions inc. c. Asselin, 2022 QCCS 3537, Justice Bellavance dismissed an application challenging an arbitral tribunal’s jurisdictional decision to join a non-signatory corporation to an arbitration. Justice Bellavance validated the tribunal’s application of jurisprudence on joinder of non-signatories to arbitrations seated in Québec. Although the non-signatory was a stranger to the arbitration agreement, the arbitral tribunal found, and Justice Bellavance agreed, that it was appropriate to join it based on a prima facie showing that the corporation was one of the parties’ alter ego.

November 7, 2022March 8, 2023

Québec – Fragmentation of shareholders dispute stayed pending appeal on jurisdiction – #678

In Istanboulian v Kalajian, 2022 QCCA 1259, Justice Cournoyer granted leave to appeal from a judgment of the Québec Superior Court, which had referred part of a claim to arbitration. He found that the judgment under appeal caused irremediable injury to the Applicants by possibly preventing them from being heard in the appropriate forum and that it was in the interest of justice to immediately get to the bottom of the jurisdictional issue.

November 3, 2022November 15, 2022

Québec – No clean hands, no security despite stay of homologation application – #677

In Specter Aviation v United Mining Supply, 2022 QCCS 3643, Justice Castonguay granted a stay of an application by the successful party in a foreign arbitration to homologate the award, but denied the applicants’ alternative request for security, pending the unsuccessful party’s annulment application to the Paris Court of Appeal. Despite recognizing that a court should be reluctant to interfere with a successful party’s enforcement efforts, Justice Castonguay found that the annulment application was, “neither futile nor frivolous” and that the successful party did not have clean hands and had resorted to a self-help remedy. He also ordered costs against the successful party.

October 24, 2022January 10, 2023

Quebec – The broad powers of an arbitrator as “amiable composer” – #673

In Investissements immobiliers MB inc. c. SMP Direct inc., 2022 QCCS 3315, Justice Godbout affirmed the broad jurisdiction that an arbitrator has to grant remedies in oppression claims, especially when empowered as an ‘amiable composer’. An ‘amiable composer’ may make a binding decision based on equity (rather than law) and without procedural formalities. It is a role that has its roots in civil law (“amiable compositeur”).

October 13, 2022October 17, 2022

Québec – Solidary liability allegation no bar to referral to arbitration for one defendant – #671

In Nantel v Gonzalez (not reported), Justice Buchholz stayed an action as against one defendant of a group and referred its dispute with the Plaintiffs to arbitration, even though the Plaintiffs alleged solidary (joint) liability as against all Defendants.

October 10, 2022October 7, 2022

Québec –Property Appraisal Process not Contrary to Public Order– #668

In Hypertech Real Estate Inc. v. Equinix Canada Ltd, 2022 QCCS 3368, Justice Corriveau dismissed an application to annul an arbitral award on the basis that a property appraisal process was “contrary to public order” pursuant to Article 646 of the Québec Code of Civil Procedure (“the CCP”). Under the terms of an option to purchase property (the “Property”), Hypertech Real Estate Inc. (“Hypertech”) and Equinix Canada Ltd. (“Equinix”) submitted appraisal valuations. Purchaser Equinix’s appraisal was some $60,000,000 lower than seller Hypertec’s. In arbitration, Hypertec maintained that Equinix’s appraisal was so flawed it should be excluded from consideration. The arbitral tribunal reviewed the appraisal in “Phase I” of the arbitration and rendered an award finding that the appraisal contained no fundamental flaws. Hypertec unsuccessfully argued before Justice Corriveau that the arbitral tribunal erred in two respects: (1) in its interpretation and application of rules of public order; and (2) that the award reasons were insufficient, which was contrary to public order.

September 27, 2022September 26, 2022

Québec – Interests of justice require closely linked disputes to be arbitrated – #664

In Tessier v 2428-8516 Québec inc., 2002 QCCS 3159, Justice Dufresne granted an application for a declinatory exception in respect of an originating application, and referred two disputes involving ownership of two closely connected companies to arbitration where the shareholders of only one of the two companies involved in the disputes were subject to an arbitration agreement. Justice Dufresne found that the disputes were linked. He relied upon the interests of justice and the principle of proportionality and found that [informal translation]“rather than depriving the shareholders of the first [company] of the effects of the arbitration clause, the shareholders of the second [company] should be ordered to be subject to it.”

September 12, 2022September 9, 2022

Québec – Annulment – No review of the merits and no reason to appeal – #658

Balabanyan v. Paradis, 2022 QCCA 877 is, hopefully, the last stage of this arbitration saga, which has come before the Court many times before. In a previous Case Note, Québec – Annulment – No review of the merits, even if award wrong #603, I reviewed how the Court dismissed each and every reason the Appellant raised against the arbitral award made against him. In her decision, Québec Superior Court Justice Harvie reaffirmed that courts have no jurisdiction to revisit the merits of an arbitral award or the arbitrator’s reasons and assessment of the evidence when a party is seeking homologation or annulment of an arbitral award. She also confirmed the strict scope of analysis of homologation/annulment grounds according to sections 645 and 646 CCP. In an ultimate attempt to annul the award made against him, the Appellant sought leave to appeal Justice Harvie’s decision. Firstly, the Court of Appeal took notice of Justice Harvie’s assessment that the Appellant acted in bad faith in the conduct of his proceedings: by seeking to “wear the opponent out of steam by a maze of procedures and ill-founded arguments”. This increased Appellant’s burden significantly and even more considering the fact that the Appellant’s application was out of time. The Court of Appeal dismissed the leave application because the Plaintiff did not demonstrate any reason to justify his demand.