CANADA Law and Practice Contributed by: John Pirie, Matthew Latella, David Gadsden and Christina Doria, Baker McKenzie
longer. In addition, if the party seeking enforcement pursues interlocutory relief (eg, a Mareva injunction to freeze assets) and such steps become subject to set- aside proceedings or other challenges, the progress of the enforcement proceeding may be adversely impacted. Jurisdictional issues related to service can also delay proceedings. Costs for court filings are modest. 4.6 Challenging Enforcement of Arbitral Awards Most provinces have legislation that sets out the limited circumstances in which the enforcement of a domestic arbitral award can be challenged. These limited circumstances include where there is a pend - ing appeal of the award, a pending application to set aside the award or a pending application for a declara - tion of invalidity. Where the period to appeal, set aside the award or apply for a declaration of invalidity has not elapsed, the court may enforce the award or stay enforcement until the period has elapsed or until the pending proceeding is finally disposed of. In addition, the recognition and enforcement of a domestic award can be challenged on the following narrow grounds: • absence of notice to the other party; • the award deals with a dispute that is outside the scope of the arbitration agreement; or • there is a breach of public policy. International arbitral awards can be challenged under the limited grounds of Article 36 (1)(a)(ii) of the Model Law or Article V of the New York Convention, where the party resisting enforcement can prove that: • a party to the arbitration was under some incapac - ity or the agreement was not valid under the law of the seat of arbitration where the award was made; • the party against whom the award was invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present their case; • the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters
that are beyond the scope of the submission to arbitration; • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, in the absence of such an agreement, was not in accordance with the law of the country where the arbitration took place; or • the award has not yet become binding on the par - ties 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. In addition, enforcement may be refused if the court finds that: • the subject matter of the dispute is not capable of settlement by arbitration under the law of the state where enforcement is sought; or • the recognition or enforcement of the award would be contrary to the public policy of the state where enforcement is sought. The public policy ground to refuse enforcement of a foreign arbitral award has been narrowly construed (as confirmed, for example, in Enrroxs Energy and Mining Group v Saddad , 2022 BCSC 285 at para 52). The public policy defence is “to guard against enforce - ment of an award which offends our local principles of justice and fairness in a fundamental way… or where there was ignorance or corruption on the part of the tribunal which could not be seen to be tolerated or condoned by our courts” ( Schreter v Gamac Inc , 1992 7 OR (3d) 608). The public order exception to the enforcement of for - eign judgments under the Quebec Civil Code (related to the broader public policy exception applicable in the rest of Canada, which has a common law legal system) was recently considered by the Supreme Court of Canada in a complex and detailed decision involving letters of credit, fraud and conflicting arbi - tral awards and foreign judgments. Eurobank Ergasias SA v Bombardier Inc , 2024 SCC 11 featured fraudu - lent conduct by both an arm of the Greek govern - ment and a Greek bank, as part of efforts to avoid the results of an arbitration process the Greek State had formally undertaken to honour. Judgments were obtained by the Greek bank from the Greek courts,
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