Canada

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Applicable requirements as to the form of arbitral awards

Applicable legislation as to the form of awards

1 Must an award take any particular form?

In Quebec, the Quebec Code of Civil Procedure (CCP) governs arbitration proceedings when the arbitration takes place in Quebec (Articles 620 to 644), the homologation and setting aside of arbitral awards made in Quebec (Articles 645 to 648) and the recognition and enforcement of foreign arbitral awards (Articles 652 to 655). Article 642 of the CCP requires that the award be made in writing, be signed by the arbitrator or arbitrators, include reasons on which the award is based, state its date and the place where it was made and be notified without delay to each party.

In Ontario, the International Commercial Arbitration Act (ICAA) governs the arbitration proceedings for international arbitrations that take place in Ontario, whereas the Arbitration Act (OAA) governs the arbitration proceedings for domestic arbitrations that take place in Ontario. Awards for both international and domestic arbitrations must be made in writing, be signed by the arbitrator or arbitrators, include the reasons on which the award is based, state its date and the place of arbitration and be delivered to each party after the award is made (ICAA, Schedule 2, Article 31; OAA, Section 38).

Canada is also a party to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) and implemented it federally in the Settlement of International Investment Disputes Act. Awards under the ICSID Convention must (1) be in writing and signed by the members of the tribunal who voted for it, (2) deal with every question submitted to the tribunal and (3) state the reasons on which the award is based. The award is deemed to be made on the date it is dispatched to the parties by the International Centre for Settlement of Investment Disputes (ICSID).

Applicable procedural law for recourse against an award (other than applications for setting aside)

Applicable legislation governing recourse against an award

2 Are there provisions governing modification, clarification or correction of an award? Are there provisions governing retractation or revision of an award? Under what circumstances may an award be retracted or revised (for fraud or other reasons)? What are the time limits?

Under Article 643 of the CCP and Articles 40 and 44 of the OAA, within 30 days of receiving an award, a party may request the arbitral tribunal to – or the arbitral tribunal may, on its own initiative – correct or modify any typographical errors, errors of calculation and similar errors in, or provide an interpretation of a part of, the award. The interpretation will form an integral part of the award. A party may also ask the tribunal for a supplementary award on a part of the dispute on which the award failed to rule.

The same provisions apply to international arbitral awards in Ontario under Article 33 of the UNCITRAL Model Law on International Commercial Arbitration of 1985, as amended on 7 July 2006 (the Model Law), which has force of law in Ontario, as provided by the ICAA. Article 33 of the Model Law further provides that unless otherwise agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to make an additional award regarding claims presented in the arbitral proceedings but omitted from the award within 30 days of receipt of the award. If the tribunal considers the request to be justified, it will make the additional award within 60 days.

Neither the CCP nor the OAA provides for the possibility of the award being retracted by the arbitrators; an award will bind the parties, unless it is set aside or varied.

Appeals from an award

3 May an award be appealed to or set aside by the courts? What are the differences between appeals and applications to set aside awards?

Quebec law does not permit appeals of arbitral awards. Awards, whether domestic or international, may only be challenged through an application for annulment (CCP, Article 648).

Ontario law does not permit appeals of international arbitral awards made in Ontario. Article 32 of the Model Law provides that the arbitral proceedings terminate when the arbitral tribunal issues the final award or otherwise issues an order terminating the proceedings. For domestic arbitral awards made in Ontario, Section 45 of the OAA provides that if the arbitration agreement is silent on the issue of appeals, an appeal is possible on a question of law only. In the arbitration agreement, the parties may agree to exclude the possibility of an appeal or to expand it to include appeals on questions of fact or mixed fact and law.

A party may seek to set aside an international arbitral award made in Ontario pursuant to the requirements under Article 34 of the Model Law. A party may also seek to set aside a domestic award under Section 46 of the OAA on similar grounds to those under Article 34 of the Model Law.

Applicable procedural law for setting aside of arbitral awards

Time limit

4 Is there a time limit for applying for the setting aside of an arbitral award?

In Quebec, a party must submit the setting-aside application within three months of receipt of the award or of a correction, supplementary award or interpretation (CCP, Article 648). This is a strict time limit, which means that it may only be extended if the court is satisfied that it was impossible in fact for the party seeking the annulment of the award to act sooner.

In Ontario, parties have 30 days from receipt of a domestic arbitral award to appeal the award or apply to set it aside (OAA, Section 47(1)). The time limit does not apply if the appellant or applicant alleges corruption or fraud (OAA, Section 47(2)). With respect to international arbitration awards, Article 34 of the Model Law provides that a party must apply to set aside an award within three months of the date the party received the award or the date on which the arbitration tribunal disposed a request under Article 33.

Award

5 What kind of arbitral decision can be set aside in your jurisdiction? What are the criteria to distinguish between arbitral awards and procedural orders in your jurisdiction? Can courts set aside partial or interim awards?

Under Quebec law, a court may set aside arbitral awards, as well as provisional or safeguard measures ordered by the arbitrator (CCP, Articles 638, 646 and 648).

The word ‘award’ is not defined in the CCP. Quebec courts consider that arbitral decisions that dispose of one or more of the claims filed by the parties constitute arbitral awards (Learned Enterprises International Canada Inc v. Lyons, REJB 99-13883 (C.S.) (Learned Enterprises)); therefore, partial or interim awards can be set aside by Quebec courts when they rule on a question of substance (The Gazette v. Blondin, 2003 CanLII 33868 (QC CA)).

Both domestic and international arbitral awards, including partial or interim awards, can be set aside in Ontario (OAA, Section 46; Model Law, Article 34). An exception is made for preliminary orders in international arbitrations, which are not subject to court enforcement (Model Law, Article 17(5)).

The distinguishing feature between an arbitral award and a procedural order is that an arbitral award ‘disposes of part or all of the dispute between the parties’ whereas a procedural order is interlocutory in nature (Inforica Inc v. CGI Information Systems and Management Consultants Inc, 2009 ONCA 642).

Competent court

6 Which court has jurisdiction over an application for the setting aside of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

The Court of Quebec has exclusive jurisdiction over an application for the setting aside of a domestic or international arbitral award in Quebec if the value of the subject matter of the dispute submitted to arbitration is less than C$85,000 (CCP, Articles 35 and 39). If the value of the dispute is equal to or exceeds C$85,000, the Superior Court of Quebec is the competent court to set aside the award according to its inherent general jurisdiction (CCP, Article 33). Applications made in the Superior Court of Quebec are tried in the Commercial Chamber (Regulation of the Superior Court of Quebec in civil matters, Section 63), whereas applications made in the Court of Quebec are tried in the Civil Chamber.

In Ontario, the Ontario Superior Court of Justice has jurisdiction over applications for the setting aside of both domestic and international arbitral award (ICAA, Section 6(2); OAA, Section 1).

The Federal Court of Canada has jurisdiction over an application for the setting aside of an arbitral award ‘in relation to matters where at least one of the parties to the arbitration is Her Majesty in right of Canada, a departmental corporation or a Crown corporation or in relation to maritime or admiralty matters’ (Commercial Arbitration Act, Section 5).

Form of application and required documentation

7 What documentation is required when applying for the setting aside of an arbitral award?

A party seeking to set aside an arbitral award in Quebec can proceed by way of an originating application for annulment or an incidental application during a proceeding for the homologation of the award (CCP, Article 648). The application for annulment should be accompanied by a copy of the award.

Under Ontario law, an award can be set aside by way of application. The setting-aside application should contain a copy of the award. Rule 38.09 of the Rules of Civil Procedure (RCP) sets out what an application record must generally contain.

Translation of required documentation

8 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with the application for the setting aside of an arbitral award? If yes, in what form must the translation be?

In both Quebec and Ontario, the required documents must be accompanied by a full translation certified by the translator if they are drafted in a language other than French or English. If the setting-aside application is made in Quebec, the translation must be certified in Quebec.

Other practical requirements

9 What are the other practical requirements relating to the setting aside of an arbitral award? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

In Quebec, the tariff of judicial fees in civil matters prescribes the court fees due at the time an application for annulment of an arbitral award is filed. The length of the application is not prescribed by law, and the application may be drafted in French or English (Charter of the French Language (CFL), Section 7). However, on 21 June 2022, a group of lawyers filed an application for judicial review to invalidate Sections 5 and 119 of An Act respecting French, the official and common language of Quebec, which was scheduled to come into force on 1 September 2022. These Sections require that all English-language pleadings emanating from legal persons be accompanied by a certified French translation when filed with a court. On 12 August 2022, the Superior Court suspended Sections 5 and 119 during the proceedings.

In Ontario, there is a court fee of C$243 for filing an application, and the materials may be drafted in either English or French. The length of the application is not prescribed by law, although some judicial centres, such as Toronto, have page length limits for written arguments.

Form of the setting-aside proceedings

10 What are the different steps of the proceedings?

Quebec

Once served with the setting-aside proceedings, the defendant must respond within 15 days (30 days if the defendant has no domicile, residence or establishment in Quebec). The defence of the setting-aside application is made orally at the hearing unless the case presents a high level of complexity or special circumstances that warrant a written defence.

Discovery is unusual in setting-aside proceedings but may occur if required. In those cases, the scope of the discovery should be limited to the means of defence provided in Article 646 of the CCP.

The hearing of the setting-aside application comprises the evidence stage, if any, followed by oral arguments.

Ontario

The party bringing the setting-aside application must serve the notice of application at least 10 days before the date of the hearing of the application, except where the notice is served outside Ontario, in which case it must be served at least 20 days before the hearing date (RCP, Rule 38.06(3)).

The applicant must subsequently serve an application record, together with a factum of the arguments and law, at least seven days before the hearing, and file the application record and factum with the court at least seven days before the hearing. Rule 38.09 of the RCP sets out what must be contained in an application record.

The respondent must then serve a factum of the arguments and law at least four days before the hearing. If the respondent believes the application record is incomplete, it may serve a respondent’s application record, together with its factum, at least four days before the hearing.

If the evidence is provided by affidavit, the parties may cross-examine the affidavits outside court.

The hearing of the setting-aside application comprises the evidence stage, if any, followed by oral arguments.

Suspensive effect

11 May an arbitral award be recognised or enforced pending the setting-aside proceedings in your jurisdiction? Do setting-aside proceedings have suspensive effect? If not, which court has jurisdiction over an application to stay the enforcement of the award pending the setting-aside proceedings, what are the different steps of the proceedings, and what are the criteria to be met?

Setting-aside proceedings do not have a suspensive effect in Quebec; however, the court may, on request, suspend the homologation application pending the outcome of the setting-aside proceedings. Since the grounds for setting aside the award and for refusing homologation are the same (CCP, Article 648), the applications would most likely be consolidated to be tried at the same time.

International arbitral awards in Ontario may be recognised regardless of a pending setting-aside proceeding because Article 36 of the Model Law is permissive (i.e., there are limited grounds for refusing recognition and enforcement of an award). As such, setting-aside proceedings do not necessarily have suspensive effect. A similar permissive provision applies to domestic arbitral awards (OAA, Section 50(5)).

For both international and domestic awards, the Ontario Superior Court of Justice has jurisdiction over an application to stay the enforcement of the award pending a setting-aside proceeding. The power to stay the enforcement of an award is discretionary. The court will consider whether:

there is a serious question to be determined on the setting-aside application;
the moving party will suffer irreparable harm if the stay is not granted; and
the balance of convenience favours granting the stay (The Canada Soccer Association Incorporated v. Association de Soccer de Brossard, 2023 ONSC 1367 at [14]).

Grounds for setting aside an arbitral award

12 What are the grounds on which an arbitral award may be set aside?

The grounds for setting aside an arbitral award are as follows (CCP, Articles 646 and 648; Model Law, Article 34; OAA, Section 46):

one of the parties lacked the capacity to enter into the arbitration agreement;
the arbitration agreement is invalid under the law chosen by the parties or, failing any indication in that regard, under Quebec law or Ontario law, respectively;
the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or the arbitral proceedings or was otherwise unable to present its case;
the award concerns a dispute that falls outside the scope of the arbitration agreement or contains decisions that fall outside the agreement’s scope. If the part of the award that pertains to matters not submitted to arbitration can be separated from the rest of the award, only that part may be set aside; or
the procedure for the composition of the arbitral tribunal or the arbitral procedure did not comply with the parties’ agreement, or, failing any indication in that regard, the law of the place where the award was made or the measure decided, unless the agreement violates a legal provision that cannot be derogated from.

The court may set aside an award on its own initiative if it finds that:

the subject matter of the dispute cannot be settled by arbitration under the relevant state law; or
the award conflicts with state public policy.

Desputeaux v. Éditions Chouette (1987) inc, 2003 SCC 17 (Desputeaux) confirmed that the above grounds are exhaustive in Quebec.

Even where the formal requirements to set aside an order are met, the Ontario courts consider setting aside an arbitral award a discretionary decision that requires balancing competing interests and favour deference to the original decision granting the arbitral award (Popack v. Lipszyc, 2016 ONCA 135).

Scope of power of the setting-aside judge

13 When assessing the grounds for setting aside, may the judge conduct a full review and reconsider factual or legal findings from the arbitral tribunal in the award? Is the judge bound by the tribunal’s findings? If not, what degree of deference will the judge give to the tribunal’s findings?

In Quebec, under Articles 645 and 648 of the CCP, the court seized by an application for annulment of a domestic or international award cannot review the merits of the dispute. When public policy is at issue, the court must examine the award as a whole, without delving into the factual or legal findings (Desputeaux).

The approach in Ontario is similar. A setting-aside application (whether for a domestic or an international arbitral award) does not involve a review of the merits, and the procedural issues will generally be assessed on a reasonableness standard.

On appeals of a substantive issue (only for domestic awards and if an appeal is available), the state of the law is in flux on the degree of deference that a judge must give to a tribunal’s findings.

In Sattva Capital Corporation v. Creston Molly Corp, 2014 SCC 53, the Supreme Court held that in the context of commercial arbitration, the standard of review is reasonableness (i.e., a deferential standard) on questions of law unless it concerns a constitutional matter or is of central importance to the legal system as a whole, in which case the court will apply the standard of correctness (see also Teal Cedar Products Ltd v. British Columbia, 2017 SCC 32).

However, in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the Supreme Court sought to clarify the law applicable to judicial review of administrative decisions. Although Vavilov was a judicial review of an administrative decision, the Court addressed the issue of statutory appeals and noted that statutory appeals should apply a standard of correctness (i.e., a less deferential standard) to questions of law and jurisdiction. This spawned confusion regarding appeals of arbitral decisions, and this confusion remains unresolved. The Ontario courts have attempted to grapple with this issue but have arrived at conflicting conclusions (see Serbcan Inc v. National Trust Co, 2022 ONSC 2644 and D Lands Inc v. KS Victoria and King Inc, 2022 ONSC 1029).

Waiver of grounds for setting aside

14 Is it possible for an applicant in setting-aside proceedings to be considered to have waived its right to invoke a particular ground for setting aside? Under what conditions?

In Quebec, Article 622 of the CCP provides that the arbitration agreement cannot depart from the provisions of the CCP relating to the annulment of an arbitration award; however, it does not preclude a waiver after the fact.

A party may be deemed to have waived its right to invoke a ground for setting aside unless it runs counter to a rule of directive public policy. The waiver will be valid only when it is informed and expressed in full knowledge of the facts.

The waiver may also be implicit if, fully aware of its rights, the party fails to assert them in a timely manner (Anvar v. Zivari, 2015 QCCS 1951 (Anvar)); however, a party will not be considered to have waived its right to invoke a particular ground for setting aside simply because it did not raise the ground during the enforcement proceeding in another jurisdiction (Smart Systems Technologies Inc v. Domotique Secant Inc, 2008 QCCA 444 (Smart Systems)).

In Ontario, the parties may not vary or exclude any provision in the legislation dealing with the setting aside of an award (OAA, Section 3), although a waiver after the fact is technically possible (OAA, Section 4).

Article 4 of the Model Law applies to determine whether a party has waived a right under the Model Law. It provides that the party waiving its rights must have had full knowledge of his or her rights, or a particular defect, and unequivocally and consciously abandoned his or her rights, or his or her right to complain with respect to a particular defect or omission (Telestat Canada v. Juch-Tech, Inc, 2012 ONSC 2785, citing Saskatchewan River Bungalows Ltd v. Maritime Life Assurance Co [1994] 2 SCR 490).

Decision on the setting-aside application

15 What is the effect of the decision on the setting-aside application in your jurisdiction? What challenges or appeals are available?

In Quebec, the setting-aside decision binds the parties and has res judicata effect. The decision is not subject to appeal except by leave from one of the judges of the Court of Appeal of Quebec (Maïo v. Lambert, 2022 QCCA 157 (Maïo); Hypertec Real Estate Inc v. Equinix Canada Ltd, 2023 QCCA 60 (Hypertec)). A party may seek the revocation of the judgment deciding the setting-aside application if one of the circumstances described in Article 345 of the CCP is present.

In Ontario, a party may appeal a decision by the Superior Court of Justice granting or refusing to set aside an arbitral award to the Ontario Court of Appeal (Courts of Justice Act, Section 6(1)(b)). For domestic arbitrations, appeals require leave of the Court of Appeal (OAA, Section 49). For international arbitration awards, whether an appeal requires leave or is available as of right depends on the value and nature of the award and the decision sought to be appealed.

Effects of decisions rendered in other jurisdictions

16 Will courts take into consideration decisions rendered in relation to the same arbitral award in other jurisdictions or give effect to them?

Quebec courts considering an application for the annulment of an award are not bound by the determinations of a foreign court regarding the validity of the award. Access to the Quebec enforcement mechanism can only be controlled by the judicial system of Quebec (Chevron Corp v. Yaiguaje, 2015 SCC 42 (Chevron); Smart Systems); however, Quebec courts may find the other decisions persuasive and relevant.

Similarly, Ontario courts may find other common law jurisdiction decisions persuasive, but they are not binding on Ontario courts.

Applicable procedural law for recognition and enforcement of arbitral awards

Applicable legislation for recognition and enforcement

17 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Canada is a signatory to both the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the ICSID Convention. Canada implemented the ICSID Convention federally in the Settlement of International Investment Disputes Act.

In Quebec, the CCP governs both the homologation of domestic and international arbitral awards made in Quebec and the recognition and enforcement of arbitral awards made outside Quebec. Articles 645 to 647 (the source of which is the Model Law) govern the homologation of awards made in Quebec while Articles 652 to 655 (the source of which is the New York Convention) govern the recognition and enforcement of awards made outside Quebec. As such, Quebec courts may consider the Model Law and the New York Convention when interpreting the provisions of the CCP governing the homologation and the recognition and enforcement of awards.

In Ontario, the ICAA governs the recognition and enforcement of international arbitral awards while the OAA governs the enforcement of domestic awards.

Section 2 of the ICAA provides that the New York Convention has force of law in Ontario in relation to arbitral awards arising out of commercial legal relationships. Section 5 of the ICAA provides that the Model Law has force of law in Ontario.

For domestic awards, a party may apply to the court for enforcement under Section 50 of the OAA. Unless the subject matter is not arbitrable, the award grants an ‘unusual’ remedy or the award is a family arbitration award, the award is generally enforceable in the same manner as a court judgment.

The New York Convention

18 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?

The New York Convention entered into force in Canada on 10 August 1986. As jurisdiction over international commercial arbitration is shared between the federal government and the provinces, the implementation of the Convention required legislative action from each provincial legislature to enter the latter’s legal order. Parliament (including Canada’s territories: Yukon, Northwest Territories and Nunavut) and all 10 provinces have adopted statutes implementing the Convention.

The commercial reservation permitted by the Convention has been adopted by Parliament and all provincial legislatures except Quebec.

Recognition proceedings

Time limit

19 Is there a time limit for applying for the recognition and enforcement of an arbitral award?

In Quebec, the CCP requires that an application for recognition and enforcement of an arbitral award be brought within 10 years of the date of the final award (Itani v. Société générale de Banque au Liban SAL, 2022 QCCA 920, application for leave to appeal to the Supreme Court dismissed, Case No. 40383).

In Ontario, Section 10 of the ICAA requires that an application for recognition and enforcement of an international arbitral award be brought within 10 years of the date of the final award. Section 52(3) of the OAA applies the same time limit for domestic awards.

Competent court

20 Which court has jurisdiction over an application for recognition and enforcement of an arbitral award? Is there a specific court or chamber in place with specific sets of rules applicable to international arbitral awards?

In Quebec, the Court of Quebec has exclusive jurisdiction over an application for the homologation of a domestic or international award made in Quebec and for the recognition and enforcement of a foreign arbitral award if the value of the subject matter of the dispute submitted to arbitration is less than C$85,000 (CCP, Articles 35 and 39). If the value of the dispute is equal to or exceeds C$85,000, the Superior Court of Quebec is the competent court to recognise and enforce the award according to its inherent general jurisdiction (CCP, Article 33). Applications made in the Superior Court of Quebec are tried in the Commercial Chamber (Regulation of the Superior Court of Quebec in civil matters, Section 63), whereas applications made in the Court of Quebec are tried in the Civil Chamber.

In Ontario, the Superior Court of Justice has jurisdiction over the recognition and enforcement of both international awards made in Ontario and foreign arbitral awards (ICAA, Sections 3 and 6(2)). The Superior Court of Justice and the Family Court have jurisdiction over the enforcement of domestic awards (OAA, Section 1).

The Federal Court has jurisdiction over an application for the recognition and enforcement of an arbitral award ‘in relation to matters where at least one of the parties to the arbitration is Her Majesty in right of Canada, a departmental corporation or a Crown corporation or in relation to maritime or admiralty matters’ (Commercial Arbitration Act, Section 5).

Jurisdictional and admissibility issues

21 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement and for the application to be admissible? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Canadian courts, except the federal courts, can be seized of applications for the recognition and enforcement of arbitral awards without any prior jurisdictional inquiry. Canadian law does not require that the defendant have a presence or assets in the enforcing jurisdiction for Canadian courts to have jurisdiction over an application for recognition and enforcement of an arbitral award (Chevron).

Federal courts have jurisdiction to recognise and enforce arbitral awards rendered in matters that have a federal character in a constitutional sense (Compania Maritima Villa Nova SA v. Northern Sales Co [1992] 1 FC 550 (CA), 1991 CarswellNat 158; see also TMR Energy Ltd v. State Property Fund of Ukraine, 2003 FC 1517, Paragraphs 27 to 30), such as maritime law and admiralty law (see the Constitution Act 1867, Section 91).

Form of the recognition proceedings

22 Are the recognition proceedings in your jurisdiction adversarial or ex parte? What are the different steps of the proceedings?

Quebec

A party seeking the recognition of an arbitral award proceeds by way of an originating application for homologation if the award is made in Quebec (CCP, Article 645) or by way of an originating application for recognition and enforcement if the award is made outside Quebec (CCP, Article 652). These proceedings are adversarial and must be served on the party against which homologation or recognition and enforcement of the award is sought.

The defendant must respond within 15 days of service (or 30 days if it has no domicile, residence or establishment in Quebec). The defence of the application is made orally at the hearing unless the case presents a high level of complexity or special circumstances warrant a written defence.

Discovery is unusual in homologation and recognition and enforcement proceedings but may occur if required. In those cases, the scope of the discovery should be limited to the means of defence provided in Articles 646 (for the homologation of arbitral awards made in Quebec) and 653 (for the recognition and enforcement of arbitral awards made outside Quebec) of the CCP.

The hearing of an application for homologation or for recognition and enforcement of an arbitral award comprises the evidence stage, if any, followed by oral arguments.

Ontario

The RCP regulates the procedural steps of recognition proceedings in Ontario. These proceedings are adversarial but generally do not involve a merits hearing with live evidence. The originating process – the notice of application – together with the application record and factum must be served on the opposing party.

The party bringing the application must serve the notice of application at least 10 days before the date of the hearing of the application, except where the notice is served outside Ontario, in which case it must be served at least 20 days before the hearing date (RCP, Rule 38.06(3)). The responding party must deliver a notice of appearance without delay (RCP, Rule 38.07(1)).

The respondent must then serve a factum at least four days before the hearing. If the respondent believes the application record is incomplete, it may serve a respondent’s application record together with its factum.

If the evidence is provided by affidavit, the parties may cross-examine the affidavits outside court.

The hearing of the setting-aside application comprises the evidence stage, if any, followed by oral arguments.

Form of application and required documentation

23 What documentation is required to obtain recognition?

An application for homologation of an award made in Quebec should be accompanied by a copy of the award. An application for recognition and enforcement of an award made outside Quebec must be accompanied by the arbitral award and the arbitration agreement (CCP, Article 652).

In Ontario, both Article 35(2) of the Model Law and Article IV of the New York Convention apply through the ICAA. The latter requires that the party applying for recognition and enforcement of an arbitral award provide (1) the duly authenticated original award or a duly certified copy thereof, and (2) the original agreement (e.g., a contract containing an arbitral clause) or a duly certified copy thereof. For a domestic award, the party applying for enforcement need only provide the original award or a certified copy of the award (OAA, Section 50(2)).

Translation of required documentation

24 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition? If yes, in what form must the translation be?

If the award or the arbitration agreement was drafted in a language other than French or English, the applicant must submit a full translation of those documents certified by the translator (Courts of Justice Act, Sections 125 to 126). In the case of Quebec, the certification must be in Quebec (CCP, Article 652(2)).

Other practical requirements

25 What are the other practical requirements relating to recognition and enforcement? Are there any limitations on the language and length of the submissions and of the documentation filed by the parties?

In Quebec, the tariff of judicial fees in civil matters prescribes the court fees due at the time the application for the homologation or recognition and enforcement is filed. The length of the application is not prescribed by law, and the application may be drafted in French or English (CFL, Section 7). However, on 21 June 2022, a group of lawyers filed an application for judicial review to invalidate Sections 5 and 119 of An Act respecting French, the official and common language of Quebec, which was scheduled to come into force on 1 September 2022. These Sections require that all English-language pleadings emanating from legal persons be accompanied by a certified French translation when filed with a court. On 12 August 2022, the Superior Court suspended Sections 5 and 119 during the proceedings.

Recognition of interim or partial awards

26 Do courts recognise and enforce partial or interim awards?

Quebec courts can homologate arbitral awards and provisional or safeguarding measures made in Quebec (CCP, Articles 645 to 646). One exception to this is where a provisional order is issued ex parte by the arbitrator, in which case the order is binding on the parties but cannot be homologated by the court (CCP, Article 639).

Although the word ‘award’ is not defined in the CCP, Quebec courts consider arbitral decisions that dispose of one or more of the claims filed by the parties to be arbitral awards (Learned Enterprises). Partial or interim awards can, therefore, be homologated by Quebec courts when they rule on a question of substance.

Quebec courts can also recognise and enforce arbitral awards and provisional or safeguard measures issued by foreign arbitral tribunals (CCP, Article 652).

In Ontario, courts may recognise and enforce partial or interim awards on the same basis as final awards, provided that the decision constitutes an award. As with the setting-aside power, powers of recognition and enforcement apply to any award, not only final awards (OAA, Section 50; Model Law, Articles 35 and 36).

Grounds for refusing recognition of an arbitral award

27 What are the grounds on which an arbitral award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the New York Convention?

In Quebec, an arbitral award made in Quebec (domestic or international) and a foreign arbitral award may be refused recognition and enforcement if (CCP, Articles 646, 652 and 653):

the party against whom enforcement is sought provides proof to the competent court that:
- one of the parties lacked the capacity to enter into the arbitration agreement;
- the arbitration agreement is invalid under the law chosen by the parties or, failing any indication in that regard, under the law of the place where the award was made or the measure decided;
- the party against whom the award or measure is invoked was not given proper notice of the appointment of an arbitrator or the arbitral proceedings or was otherwise unable to present its case;
- the award concerns a dispute that falls outside the scope of the arbitration agreement or contains decisions that fall outside the agreement’s scope. If the part of the award that pertains to matters not submitted to arbitration can be separated from the rest of the award, only that part may be set aside;
- the procedure for the composition of the arbitral tribunal or the arbitral procedure did not comply with the parties’ agreement or, failing any indication in that regard, the law of the place where the award was made or the measure decided, unless the agreement violates a legal provision that cannot be derogated from; or
- the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or
the court finds that:
- the subject matter of the dispute cannot be settled by arbitration under the relevant state law; or
- the award conflicts with state public policy.

The grounds for refusing recognition and enforcement of an international arbitral award in Ontario are similar and are set out in Article V of the New York Convention and Article 36 of the Model Law.

Scope of power of the recognition judge

28 When assessing the grounds for refusing recognition, may the recognition judge conduct a full review and reconsider factual or legal findings from the arbitral tribunal in the award? Is the judge bound by the tribunal’s findings? If not, what degree of deference will the judge give to the tribunal’s findings?

A court examining an application for recognition of an arbitration award made outside Quebec cannot review the merits of the dispute (CCP, Article 653) and can only refuse the recognition on the narrow grounds set out in Articles 652 and 653 of the CCP. Similarly, the court examining an application for homologation of an arbitration award made in Quebec cannot review the merits of the dispute (CCP, Article 645) and can only refuse homologation on the narrow grounds set out in Article 646 of the CCP. In both cases, when public policy is at issue, the court must examine the award as a whole as it relates to public policy, without delving into the factual or legal findings (Desputeaux).

In Ontario, Article V of the New York Convention and Article 36 of the Model Law set out the grounds on which a court may refuse to recognise or enforce an arbitral award. When assessing the grounds for refusing recognition, the court will not re-evaluate the factual or legal findings made by the arbitral tribunal.

Waiver of grounds for refusing recognition

29 Is it possible for a party to be considered to have waived its right to invoke a particular ground for refusing recognition of an arbitral award?

A party may be deemed to have waived its right to invoke a ground for refusing recognition unless it runs counter to a rule of directive public policy. The waiver will be valid only when it is informed and expressed in full knowledge of the facts.

The waiver may also be implicit if, fully aware of its rights, the party fails to assert them in a timely manner (Anvar); however, a party will not be considered to have waived its right to invoke a particular ground for setting aside simply because it did not raise the ground during the enforcement proceeding in another jurisdiction (Smart Systems). The same applies for arbitral awards made outside Quebec.

In Ontario, the parties to a domestic arbitration cannot contract out of the enforcement provisions of the OAA, although it is possible to waive a right after the fact (OAA, Sections 3 to 4). For international arbitrations, Article 4 of the Model Law applies and provides that a party that does not state its objection to non-compliance with the Law without undue delay or within the prescribed time limit (if one exists) is deemed to have waived its right to object. This has been interpreted as admitting the possibility of a party waiving its right to object to recognition and enforcement (e.g., Telestat Canada v. Juch-Tech, Inc, 2012 ONSC 2785).

Effect of a decision recognising an arbitral award

30 What is the effect of a decision recognising an arbitral award in your jurisdiction?

A decision homologating an arbitral award made in Quebec (CCP, Article 645) or recognising and enforcing an arbitral award made outside Quebec (CCP, Article 652) gives the arbitral award the same force and effect as a court judgment. As such, it is immediately enforceable, and a party may force the execution of the award through execution measures (e.g., garnishment).

In both cases, the decision may be appealed with leave of a judge of the Court of Appeal (Maïo; Hypertec). A properly initiated appeal stays the execution of the judgment, unless provisional execution of the judgment has been ordered by the trial judge (CCP, Article 355).

Further, a party may seek the revocation of the judgment recognising the award if one of the circumstances described at Article 345 of the CCP is present.

Recognition of an award in Ontario means that the award has the same force and effect as a judgment of an Ontario court and gives it immediate effect. A party must still pursue execution efforts. A party may appeal the recognition of an award. For domestic arbitrations, appeals require leave of the Court of Appeal (OAA, Section 49). For international arbitral awards, whether an appeal requires leave or is available as of right depends on the value and nature of the award and the decision sought to be appealed.

Decisions refusing to recognise an arbitral award

31 What challenges are available against a decision refusing recognition in your jurisdiction?

In Quebec, a decision refusing to recognise an arbitral award is not subject to appeal except by leave from one of the judges of the Court of Appeal of Quebec (Maïo; Hypertec). Further, a party may seek the revocation of a judgment refusing to recognise an award if one of the circumstances described in Article 345 of the CCP is present.

In Ontario, a party may generally appeal a decision refusing recognition of an arbitral award to the Court of Appeal. For domestic arbitrations, appeals require leave of the Court of Appeal (OAA, Section 49). For international arbitral awards, whether an appeal requires leave or is available as of right depends on the value and nature of the award and the decision sought to be appealed.

Recognition or enforcement proceedings pending annulment proceedings

32 What are the effects of annulment proceedings at the seat of the arbitration on recognition or enforcement proceedings in your jurisdiction?

In Quebec, Article 654 of the CCP implements a discretionary power for the court to stay recognition and enforcement of an award (Specter Aviation Limited v. Laprade, 2022 QCCA 1639 (Specter Aviation)).

In Lakah v. USB AG (C.S. Montreal, Court No. 500-11-056733-195, 11 September 2019, Justice Peter Kalichman, leave to appeal refused, 2019 QCCA 1869 (Lakah)) the Superior Court of Quebec stated that the test for a stay pursuant to Article 654 of the CCP involves analysis of the ‘competing concerns on each side of the debate’, with the guiding principles summarised as follows:

the right to a stay is not automatic;
the interests of justice and the guiding principles of procedure are part of the analysis (proportionality, proper administration of justice and the accessibility, quality and promptness of civil justice);
the party seeking the stay must demonstrate, at the very least, that it has arguable grounds to set aside the award and that its request for a stay is not frivolous;
a stay should only be granted exceptionally because the general objectives of arbitration are the expeditious resolution of disputes and the avoidance of protracted litigation;
a foreign court well versed in its own law is better suited to determine the validity of an award rendered in its own jurisdiction. The proper and efficient administration of justice would be better served if the foreign court rules on the issue first;
the estimated time for the completion of the foreign setting-aside proceedings is an important factor in the analysis;
the competing interests considered in weighing the merits of a stay are evaluated in light of the success of the setting-aside proceedings (i.e., whether the party seeking a stay has obtained a favourable judgment on the setting-aside proceedings); and
the party that will be most prejudiced by the decision on the stay application is more likely to win.

In Ontario, the Ontario Superior Court of Justice set out a two-step test to apply Article 36 of the Model Law in determining whether to adjourn enforcement proceedings in cases where there is an ongoing annulment proceeding at the seat of arbitration (Empresa Minera Los Quenuales SA v. Vena Resources, 2015 ONSC 4408). Courts will first determine whether there is an issue to be tried and then consider the balance of convenience. Courts may also exercise their judgement to order security for costs.

Security

33 If the courts adjourn the recognition or enforcement proceedings pending annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security?

In Quebec, Article 654 of the CCP provides that ‘if the court stays its decision, it may, on the request of the party applying for recognition and enforcement of the award, order the other party to provide a suretyship’. The decision to order the defendant to provide suretyship is discretionary (Specter Aviation).

In Lakah, the Superior Court granted the suspension of the recognition proceedings and ordered the award debtor to provide a suretyship in the amount of C$1 million (the condemnation under the award was of US$150 million).

In Ontario, Article 36(2) of the Model Law contemplates that where a court adjourns its decision on recognition or enforcement, it may order appropriate security.

In Europcar Italia SpA v. Alba Tours International Inc [1997] OJ No. 133, the court held that the posting of security would show good faith on the part of the respondent in pursuing its remedy in the foreign courts in a timely fashion. The court ordered full security to be paid because the respondent was financially able to post security, not because there was a risk of non-payment.

In Empresa Minera Los Quenuales SA v. Vena Resources, 2015 ONSC 4408, the court noted that while the annulment proceeding had already been argued and the parties were simply waiting for a decision, posting security would give the respondent an incentive to expedite the annulment decision and to avoid any future steps that would somehow delay it.

Recognition or enforcement of an award set aside at the seat

34 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an arbitral award is set aside after the decision recognising the award has been issued, what challenges are available?

Although there is no specific Quebec case law on this question, Canadian case law stands for the proposition that the court retains a residual discretion under Article V of the New York Convention to recognise and enforce an arbitral award even if it has been set aside at the seat of arbitration; however, case law offers no rules on the exercise of this discretionary power.

If an arbitral award is set aside after the decision recognising the award has been issued, a party may try to revoke (CCP, Article 345) or appeal that decision, citing new evidence.

In Ontario, a court may still enforce a foreign arbitral award, even if the award has been set aside in the jurisdiction in which it was made. Under Article 36 of the Model Law, the language ‘may be refused only’ has been interpreted as giving the court the power to enforce an award even if the award is being challenged or has been nullified at the place it was made (Schreter v. Gasmac Inc (1992) 7 OR (3d) 608).

Service

Service in your jurisdiction

35 What is the procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction? If the extrajudicial and judicial documents are drafted in a language other than the official language of your jurisdiction, is it necessary to serve these documents together with a translation? When is a document considered to be served to the opposite party?

In Quebec, an originating application must be served by a bailiff on the defendant (CCP, Articles 139 to 140). Service by bailiff is effected by delivering the document to the addressee personally, if it is a natural person (CCP, Article 116), or to the place of business of the served party, to an officer or director or an agent, if it is a legal person (CCP, Article 125).

The exhibits supporting the application must be sent to the defendant and the other parties as soon as possible following service of the application itself, in the manner agreed by the parties (CCP, Article 145). Extrajudicial documents can be remitted to a defendant by bailiff, registered mail or email or in person, as long as the plaintiff can prove that the defendant received it.

In Ontario, pursuant to Rule 16.01 of the RCP, an originating process must be served personally on the defendant. All other documents do not need to be served personally and may be served pursuant to the methods of services provided in Rule 16 of the RCP. Extrajudicial documents can be served in the same manner as in Quebec.

Service out of your jurisdiction

36 What is the procedure for service of extrajudicial and judicial documents to a defendant outside your jurisdiction? Is it necessary to serve these documents together with a translation in the language of this jurisdiction? Is your jurisdiction a party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the Hague Service Convention)? Is your jurisdiction a party to other treaties on the same subject matter? When is a document considered to be served to the opposite party?

Since Canada is a party to the Hague Service Convention, service to a defendant from states that are parties to the Convention must be completed in accordance with the Convention (CCP, Article 494; RCP, Rule 17.05(3)). Certain parties to the Convention require that the judicial and extrajudicial documents be translated into an official language of the state before they are served.

As for service in states that are not parties to the Convention, notification is made in accordance with the relevant state law or with the law of the jurisdiction where the notification is made (CCP, Article 494; RCP, Rule 17.05(2)).

Identification of assets

Asset databases

37 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction? Are there any databases or publicly available registers providing information on award debtors’ interests in other companies?

In Quebec, award creditors often use the services of a tracing agency as the publicly available registers do not generally allow for a direct search of a person’s property. To search the Quebec Land Register, which provides public information on land ownership, a creditor must have the land registration numbers. It is also possible to search the Register of Personal and Movable Real Rights to determine whether a debtor’s personal and movable real rights have been affected by other debts or were given as securities in Quebec.

In Ontario, it is possible to conduct searches for assets of individuals under the Bank Act and the Personal Property Security Act (PPSA), as well as writs searches, to see if there are any liens registered against their assets. For corporations, it is possible to conduct searches for credit reports and real estate, as well as searches under the PPSA.

Information available through judicial proceedings

38 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

In Quebec, the award creditor or the bailiff may conduct examinations in aid of execution of a judgment homologating or recognising and enforcing an arbitral award, to obtain information regarding the award debtor’s income, obligations and debts, any sums owing to the debtor, any property the debtor owns or has owned since incurring the debt that is the subject of the judgment, or the property that is the subject of the judgment. During the examination, the debtor may be required to produce a document.

The creditor or the bailiff may also examine any other person who is in a position to provide information about the debtor’s assets or any rights registered in the land register or the register of personal and movable real rights. If the person does not consent to examination, the creditor or the bailiff must obtain a court authorisation to conduct the examination (CCP, Article 688).

In Ontario, the mechanism by which a party can obtain information about an award debtor is through a judgment debtor examination similar to the procedures set out above.

Enforcement proceedings

Attachable property

39 What kinds of assets can be attached within your jurisdiction?

In Quebec, all types of property, including tangible, intangible, movable and immovable property, can be attached. The same applies for Ontario, although the Execution Act stipulates that a party’s principal residence cannot be seized if the equity in the home does not exceed C$10,783.

Availability of interim measures

40 Are interim measures against assets available in your jurisdiction? Is it possible to apply for interim measures under an arbitral award before requesting recognition? Under what conditions?

In Quebec, for both domestic and international arbitration, a party may request interim measures during arbitration proceedings from either the court (CCP, Article 623) or the arbitral tribunal (CCP, Article 638). Interim measures by an arbitral tribunal may be enforced by Quebec courts (CCP, Article 638).

It is also possible for the award creditor to obtain from the court interim measures under an arbitral award that has not yet been recognised and enforced. For instance, an award creditor may apply for a seizure before judgment against the assets of the award debtor before service of the application for homologation or recognition and enforcement of an arbitral award or before a decision is rendered on the merits of the application (CCP, Articles 516 and 521). A seizure before judgment is an exceptional measure, intended to safeguard a creditor’s rights by placing property of the debtor into the hands of justice while a legal proceeding is pending (CCP, Article 516).

A creditor may also apply to the Quebec Courts for a Mareva injunction, often called a freezing order (which orders a defendant not to dispose of any assets it owns or controls regardless of its location) before filing the application for homologation or recognition and enforcement of an arbitral award or in the course of recognition and enforcement proceedings (CCP, Articles 509 to 510).

Similarly, in Ontario, for both domestic and international arbitrations, a party may request interim measures during arbitration proceedings from either the court or the arbitral tribunal, and interim measures ordered by an arbitral tribunal may be enforced by Ontario courts (OAA, Sections 8(1), 18 and 41; Model Law, Articles 9 and 17).

It is also possible for an award creditor to apply to the Ontario courts for a Mareva injunction before filing an application for recognition and enforcement of an arbitral award or in the course of recognition and enforcement proceedings (Courts of Justice Act, Section 101; RCP, Rule 40.02).

Procedure for interim measures

41 What is the procedure to apply interim measures against assets in your jurisdiction?

In Quebec, where a seizure before judgment is sought for fear that recovery of the claim might be jeopardised without it, the moving party requires the court’s prior authorisation (CCP, Article 518). Authorisation may be sought ex parte by way of a sworn declaration in which the seizor affirms the existence of the claim and the facts justifying the seizure (CCP, Article 520). The court will grant the seizure if it concludes that there is reason to fear prima facie that the recovery of the claim may be jeopardised pending a judgment on the merits without the seizure.

A seizure before judgment is carried out by an officiating bailiff under a notice of execution and according to the seizor’s instructions, supported by the seizor’s sworn declaration. If court authorisation is necessary, it must appear on the seizor’s sworn declaration (CCP, Article 520).

The seized party may apply to quash the seizure within five days of service of the notice of execution, on the grounds that the allegations in the seizor’s sworn declaration are insufficient or false (CCP, Article 522).

In Quebec and Ontario, where a Mareva injunction is sought before the filing of an application for homologation or recognition and enforcement of an arbitral award or in the course of a proceeding, the moving party must show the urgency of the measure, the appearance of right and the irreparable harm that may arise if the injunction is not granted, as well as show that the balance of convenience favours the issuance of the Mareva injunction. When granted on an ex parte basis, the Mareva injunction cannot exceed a period of 10 days, after which the parties have the opportunity to be heard on whether the injunction should be renewed or vacated (CCP, Articles 509 to 510; Courts of Justice Act, Section 101; RCP, Rule 40.02).

Interim measures against immovable property

42 What is the procedure for interim measures against immovable property within your jurisdiction?

In Quebec and Ontario, the procedure to apply for interim measures against immovable property and movable property is generally the same as that for assets in general.

Interim measures against movable property

43 What is the procedure for interim measures against movable property within your jurisdiction?

In Quebec and Ontario, the procedure to apply for interim measures against immovable property and movable property is generally the same as that for assets in general.

Interim measures against intangible property

44 What is the procedure for interim measures against intangible property within your jurisdiction?

In Quebec and Ontario, the procedure to apply for interim measures against tangible and intangible property is generally the same as that for assets in general.

Attachment proceedings

45 What is the procedure to attach assets in your jurisdiction? Who are the stakeholders in the process?

Once a Quebec court issues a final judgment homologating or recognising and enforcing the arbitral award, the creditor may seek forced execution if the debtor refuses to comply with the judgment. A creditor wishing to force execution of a judgment must give execution instructions to a bailiff (CCP, Article 680). No prior court authorisation is required.

In Ontario, the process is like that in Quebec: a creditor wishing to enforce a judgment must commence enforcement proceedings, which includes obtaining a writ of seizure and sale (a court order sent to a sheriff to enforce a judgment made by the courts), including providing notice to the sheriff in the jurisdiction where the assets are contained, or other enforcement measures such as garnishment, sequestration or possession. The procedure varies depending on the type of enforcement being sought.

Attachment against immovable property

46 What is the procedure for enforcement measures against immovable property within your jurisdiction?

In Quebec and Ontario, a judgment creditor may ask a bailiff to seize immovable property possessed by the debtor. The seizure of immovable property is effected by registering the minutes of seizure, together with the notice of execution and proof of service on the debtor, in the Land Register (CCP, Article 705; RCP, Rule 60.07). In Quebec, sale under judicial authority is governed by Book VIII, Title III of the CCP.

Additionally, in Ontario, a judgment creditor may apply for a writ of sequestration. Sequestration authorises a sheriff to take possession of property and to collect income from the property until the debtor complies with the judgment. It will not be granted without prior court approval, and the court must be satisfied that other enforcement measures are likely to be ineffective (RCP, Rule 60.10).

Attachment against movable property

47 What is the procedure for enforcement measures against movable property within your jurisdiction?

In Quebec, the movable property of the judgment debtor may be seized to satisfy a judgment, regardless of whether it is in the possession of the debtor or a third party (CCP, Article 702). Movable property is seized by serving the notice of execution on the debtor and the garnishee (CCP, Article 704). The sale under judicial authority of the seized property is governed by Book VIII, Title III of the CCP.

In Ontario, enforcement against the judgment debtor’s personal property is generally through a writ of seizure and sale or, exceptionally, through a writ of sequestration.

Attachment against intangible property

48 What is the procedure for enforcement measures against intangible property within your jurisdiction?

Attachment against intangible property is governed by the same procedural rules as those applicable for movable property.

Attachments against sums deposited in bank accounts or other assets held by banks

49 Are there specific rules applicable to the attachment of assets held by banks? Is it possible to attach in your jurisdiction sums deposited in bank accounts opened in a branch or subsidiary of a foreign bank located in your jurisdiction or abroad? Is it possible to attach in your jurisdiction the bank accounts opened in a branch or subsidiary of a domestic bank located abroad?

In Canada, pursuant to Section 462 of the Bank Act, it is only possible to attach sums deposited in a bank account at the branch of account. As such, for Canadian courts to have jurisdiction over a bank account, the branch or subsidiary, whether of a foreign bank or a domestic bank, must be located within the court’s territorial jurisdiction.

Piercing the corporate veil and alter ego

50 May a creditor of an award rendered against a private debtor attach assets held by another person on the grounds of piercing the corporate veil or alter ego? What are the criteria, and how may a party demonstrate that they are met?

Under Quebec law, the corporate veil may be lifted when the juridical personality of a legal person is being used to dissemble fraud, abuse of right or contravention of a rule of public order (Civil Code of Quebec, Article 317). If the criteria for piercing the corporate veil are met, an award creditor may enforce the award against the property of another person (e.g., Québec (Sous-ministre du Revenu) v. 9087-3118 Québec inc, 2010 QCCA 1470).

The Ontario courts have considered lifting the corporate veil only in the most extraordinary of circumstances. As stated in 1876871 Ontario Inc v. Nova Era Bakery & Pastry IV Ltd, 2018 ONSC 3724, only exceptional cases – cases where applying the Salomon principle would be ‘flagrantly’ unjust – warrant going behind the company and imposing personal liability. Typically, the corporate veil will be pierced when the company is incorporated for an illegal, fraudulent or improper purpose; however, it can also be pierced if, when incorporated, ‘those in control expressly direct a wrongful thing to be done’.

In EnerWorks Inc v. Glenbarra Energy Solutions Inc, 2012 ONSC 414, EnerWorks had successfully sued Glenbarra. It subsequently discovered that Glenbarra assets had been moved to Glenbarra’s subsidiaries or associated corporations. EnerWorks brought an action against many of the subsidiary corporations and individuals for several causes of action, including a claim for piercing the corporate veil. Although Glenbarra pleaded that the claim should be struck out pursuant to Rule 21.01 of the RCP as disclosing no reasonable cause of action, the court rejected this argument. The court was satisfied that enough particulars for the claim were pleaded to indicate that Glenbarra had no existence independent of its owners. Although the merits of this claim were never adjudicated, this case indicates that a creditor of an award may be able to enforce an award against the property of another person by piercing the corporate veil, should the relevant circumstances be met.

Recognition and enforcement against foreign states

Applicable law

51 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

There are no rules that specifically govern recognition and enforcement of arbitral awards against foreign states in Canada; however, subject to certain exceptions, the State Immunity Act (SIA) grants foreign states immunity from suit and execution in all proceedings within Canada, including the enforcement and recognition of arbitral awards. The SIA does not provide for any exception from immunity for arbitration agreements.

Canada is also a signatory of the ICSID Convention, which provides foreign investors with a right to commence arbitration directly against a host state for a breach of investment protections afforded by bilateral or multilateral investment treaties entered into between states. Contracting states such as Canada are obliged to recognise an ICSID award as binding and enforce the pecuniary obligations imposed by that award as if it were a final judgment of a court in that state.

Service of documents to a foreign state

52 What is the procedure for service of extrajudicial and judicial documents to a foreign state? Should they be served through diplomatic channels? Is it necessary to serve extrajudicial and judicial documents together with a translation in the language of the foreign state? When is a document considered to be served to a foreign state?

Section 9 of the SIA directs how service of an originating document against a foreign state is effected: Paragraphs 1 and 2 provide that service of an originating document on a foreign state, except on an agency of that state, may be made:

in any manner agreed by the state;
in accordance with any international convention to which the state is a party; or
to Canada’s Deputy Minister of Foreign Affairs or a designated person, who will then transmit the document to the foreign state. Only a copy of the document is needed.

The modes of service provided in Section 9(1) of the SIA are mandatory.

Section 9(3) of the SIA provides the following:

Service of an originating document on an agency of a foreign state may be made:
in any manner agreed on by the agency;
in accordance with any international Convention applicable to the agency; or
in accordance with any applicable rules of court.

Section 9(4) of the SIA allows the court to prescribe a different mode of service with regard to serving an agency of the state but not the state itself (Sistem Mühendislik İnşaat Sanayi Ve Ticaret Anomic Sirketi v. Kyrgyz Republic, 2015 ONCA 447).

Immunity from jurisdiction

53 May a foreign state invoke sovereign immunity (immunity from jurisdiction) to object to the recognition or enforcement of arbitral awards?

A foreign state is immune from the jurisdiction of Canadian courts, including the recognition and enforcement of arbitral award proceedings, unless one of the exceptions provided for in the SIA applies to the dispute.

A foreign state does not enjoy immunity from suit in matters relating to commercial activities, death or personal or bodily injury, or any damage to or loss of property that occurs in Canada.

Another exception is when the state waives its immunity from jurisdiction. In that respect, the Superior Court of Quebec found that a foreign state, which is a contracting state of the New York Convention, explicitly waived any jurisdictional immunity it would otherwise have in Canada by entering into arbitration according to the UNCITRAL Arbitration Rules in the Netherlands, another contracting state of the New York Convention (CC/Devas (Mauritius) Ltd v. Republic of India, 2022 QCCS 4785, application for leave to appeal granted on 14 March 2023; Republic of India v. CCDM Holdings, 2023 QCCA 327).

Availability of interim measures

54 May award creditors apply interim measures against assets owned by a sovereign state?

The SIA does not provide for any specific rule regarding interim measures against assets owned by a foreign state.

Immunity from enforcement

55 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? Which classes of assets belonging to states are immune from enforcement as a matter of principle? Are there exceptions to immunity? How can it be proven whether an asset is immune from enforcement? Provide practical examples of assets belonging to states that were successfully attached in your jurisdiction.

Pursuant to Subsection 12(1) of the SIA, assets of a foreign state are immune from attachment and execution, except where:

the state has, either explicitly or by implication, waived its immunity from attachment, execution, arrest, detention, seizure or forfeiture, unless the foreign state has withdrawn the waiver of immunity in accordance with any term thereof that permits such withdrawal;
the property is used or is intended to be used for a commercial activity or, if the foreign state is set out on the list referred to in subsection 6.1(2), is used or is intended to be used by it to support terrorism or engage in terrorist activity;
the execution relates to a judgment establishing rights in property that has been acquired by succession or gift or in immovable property located in Canada, or
the foreign state is set out on the list referred to in subsection 6.1(2) and the attachment or execution relates to a judgment rendered in an action brought against it for its support of terrorism or its terrorist activity and to property other than property that has cultural or historical value.

Property of a foreign state that is used, or is intended to be used, in connection with a military activity, and that is military in nature or is under the control of a military authority or defence agency, is also immune from attachment and execution (SIA, Subsection 12(3)).

Waiver of immunity from enforcement

56 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? What are the requirements of waiver?

Pursuant to Subsection 12(1)(a) of the SIA, a foreign state may waive its immunity from enforcement either implicitly or explicitly. In Collavino Inc v. Yemen (Tihama Development Authority, 2007 ABQB 212 (Collavino), the court found that the foreign state waived its immunity from enforcement ‘by agreeing to international commercial arbitration’.

Piercing the corporate veil and alter ego

57 Is it possible for a creditor of an award rendered against a foreign state to attach the assets held by an alter ego of the foreign state within your jurisdiction? What are the criteria, and how may a party demonstrate that they are met? Provide practical examples of assets held by alter egos that were successfully attached by a state’s creditor in your jurisdictions.

The first Canadian decision that appears to have considered whether the assets of a state-owned corporation could be attached to satisfy a foreign judgment obtained against a foreign state is Roxford Enterprises SA v. Cuba, 2003 FCT 763. The Federal Court ruled that, as a general principle, duly created corporations of a foreign state are to be accorded a presumption of independent status; however, this presumption may be dislodged when there is ‘compelling evidence of de facto assimilation by the state of the entity, or its business and property’ and ‘a clear legal basis of a de jure assimilation by the state’. The test adopted in Roxford was subsequently referred to in Collavino.

There is currently a debate on whether the same test applies in Quebec (Air India, Ltd v. CC/Devas (Mauritius) Ltd, 2022 QCCA 1264, application for leave to appeal to the Supreme Court pending, Case No. 40462).

Sanctions

58 May property belonging to persons subject to national or international sanctions be attached? Under what conditions? Is there a specific procedure?

The imposition of sanctions in Canada is authorised through the United Nations, the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act. Whether property owned by sanctioned individuals and entities can be attached is a question determined on a case-by-case basis, with regard to the specific sanctions in place (e.g., Angophora Holdings Limited v. Ovsyankin, 2022 ABKB 711).

Notes

^[1] Mathieu Piché-Messier is a partner and a national business leader and Karine Fahmy, Ira Nishisato and Hugh Meighen are partners at Borden Ladner Gervais LLP.