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Supreme Court Refuses to Enforce Arbitration Award
Published in the May 2010 issue of Litigation Notes - View Article
The Supreme Court of Canada recently released a decision relating to the enforcement of foreign arbitration awards in Canada and specifically in the Province of Alberta. A commercial dispute arose between Yugraneft Corporation (“Yugraneft”) and Rexx Management Corporation (“Rexx”). Yugraneft is a Russian corporation that develops and operates oil fields in Russia and Rexx is an Alberta corporation that supplied materials to Yugraneft. Following a contractual dispute, Yugraneft commenced arbitration proceedings before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. The tribunal awarded Yugraneft US$952,614.43 on September 6, 2002.
In January of 2006, more than 3 years after the award was rendered, Yugraneft applied to the Alberta Court of Queen’s Bench for recognition and enforcement of the award. Rexx resisted enforcement on the grounds that the application was time barred under Alberta’s Limitations Act and also that the enforcement proceeding should be stayed pending resolution of an ongoing criminal case in the United States, which Rexx said would demonstrate that the award had been obtained as a result of fraud.
The Alberta Limitations Act provides for a two year limitation period in the case of “remedial orders” and a ten year limitation in the case of “judgments or orders for the payment of money”. The Alberta Court of Queen’s Bench ruled that the two year limitation period applied. This was upheld by the Alberta Court of Appeal which held that the term “judgment” encompassed only domestic judgments. Yugraneft appealed to the Supreme Court of Canada, which dismissed the Appeal.
Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19 (CanLII)