Canada / 22 September 1999 / Canada, Ontario Superior Court of Justice / Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A. and others
| Country | Canada |
| Court | Canada, Ontario Superior Court of Justice |
| Date | 22 September 1999 |
| Parties | Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A. and others |
| Applicable NYC Provisions | V |
| Source |
45 OR (3d) 183 | online: CanLII |
| Languages | English |
| Summary | The Applicants were four Mexican companies, and referred to interchangeably by their acronyms, DOMOS, CINCO, COTISA and CITEL. The Respondents, together referred to as STET International S.p.A. (“STET”), entered into a share subscription agreement with COTISA, which contained a clause providing for arbitration by a three-person arbitral tribunal pursuant to the Arbitration Rules of the International Chamber of Commerce (“ICC”) in Ottawa and the application of Mexican law. A dispute arose and STET initiated arbitration. The arbitral tribunal found that it had jurisdiction in respect of the four applicants, after which COTISA withdrew from the proceeding. The arbitral tribunal then issued interim and final awards, finding that all four applicants were jointly and severally liable to compensate STET for losses incurred by the breach of the share subscription agreement. The Applicants applied to set aside the award pursuant to the Ontario International Commercial Arbitration Act (the “ICAA”), which attaches the UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”) as a schedule. The Applicants argued that the award was in conflict with the public policy of Ontario and that they had been denied equality of treatment and an opportunity to present their case because the arbitral tribunal had failed to order disclosure of certain relevant documents. The Applicants further argued that the tribunal was without jurisdiction with respect to three of the Applicants who had not signed the arbitration agreement. STET counter-applied for an order enforcing the award. The Ontario Superior Court of Justice denied the application to set aside and enforced the award. It noted that the grounds for challenging an award under the UNCITRAL Model Law were derived from Article V NYC, and that authorities relating to Article V NYC were applicable to the corresponding provisions of the UNCITRAL Model Law. The Court accepted a general rule of interpretation that the grounds for refusal of enforcement are to be interpreted narrowly, and that in particular, the public policy ground should apply only where enforcement would violate Ontario’s most basic and explicit principles of justice and fairness, or where there was evidence of intolerable ignorance or corruption on the part of the arbitral tribunal. Referring to the Report of the UNCITRAL’s 18th session, it noted that the term “public policy” under the NYC covered fundamental principles of justice in its substantive as well as procedural aspects, and that notions of fairness and justice significantly overlap with the issues over the inability to present one’s case. The Court concluded that in the present case, where COTISA had refused to participate in the arbitration proceeding, inter alia, by refusing to participate in the signing of a confidentiality agreement and by withdrawing when the final hearing had commenced, it had deliberately forfeited the opportunity to be heard. The Court dismissed the other grounds for setting aside for reasons unrelated to the NYC. |
Attachment (1)
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