In Shanghai Investment Co. Ltd. V. Lu et al. 2024 ONSC 2762, the Ontario Superior Court of Justice (Commercial List), allowed a foreign arbitral award to be recognised and made enforceable as a partial summary judgment. The Plaintiff, Shanghai Lianyin Investment Co Ltd. (“SLIC”) sought the recognition and enforcement of a CAD $233 million arbitral award rendered under the rules of the China International Economic and Trade Arbitration Committee (“CIETAC”) against the Defendant Zheng Yao Lu (“Lu”) as a threshold matter; and a declaration that the other defendant, Lichun Guo (“Guo”) held her interest in two properties in Ontario on behalf of Lu, and that SLIC could enforce its award against these properties. The court found that the CIETAC award should be recognised and made enforceable as both of the following requirements under Articles IV and V of the New York Convention (incorporated in the International Commercial Arbitration Act, 2017, S.O. 2017, c. … Read More
Licensing Breaches and Lingering Fiduciary Obligations – Ontario Court of Appeal Rules License Agreement Breach Constitutes Fiduciary Duty Violation
In 7868073 Canada Ltd v 1841978 Ontario Inc, 2024 ONCA 371, the Ontario Court of Appeal recently assessed the legal effects of engaging in competing business ventures and the importance of honoring fiduciary duties stemming from license agreements following a parties departure from a former corporation. Robert Langlois (“Langlois”), alongside two partners, launched a powder-coating business, whereby Langlois granted a perpetual license (the “License”) for his industry “knowledge” to 7868073 Ontario Inc. (“786”), a company which the three parties formed and held equal shares in. In turn, 786 owned shares in two other companies (collectively referred to as “ACS”), which Langlois worked with. When Langlois left ACS to start another business without informing his former partners, ACS alleged that Langlois breached the License. The Court of Appeal affirmed the trial judge’s findings, rejecting the argument that the License was void ab initio due to its unreasonable worldwide scope and restrictions … Read More
Ontario Court Favours Place of Arbitration over Forum Selection Clause in Asset Purchase Agreement
In Tehama Group Inc v. Pythian Services Inc., 2024 ONSC 1819, the Ontario Superior Court of Justice held that the place of an arbitration, not a forum selection clause in a contract, determines the jurisdiction that recourse against an arbitral award must be taken in. The litigants were parties to a cross-border asset purchase agreement (the “APA”). The APA included an arbitration clause for disputes regarding the calculation of the purchase price, and the parties appointed “the Toronto office” of an accounting firm as arbitrator for these disputes. The APA also included broad forum selection and governing law clauses, which required “any suit, action or other proceeding arising out of this Agreement” to be brought exclusively in the courts of New York and in accordance with its laws. A dispute arose regarding an earnout clause in the APA, and the parties proceeded to arbitration. When the Toronto-based arbitrator rendered an … Read More
Letters of credit and the fraud exception: Supreme Court examines applicability to fraud by a third party
A letter of credit or a bank guarantee is an autonomous instrument that is issued by a financial institution on the directions of a customer. The letter of credit seeks to underwrite the customer’s obligations to the beneficiary under the distinct underlying contract. It entitles the beneficiary to payment on demand from the issuing bank, so long as that demand strictly complies with the requirements set out in the letter of credit. The obligation of the financial institution to pay when presented with a valid demand is near absolute. The only recognized exception in Canadian law is when there is fraud by the beneficiary that is brought to the financial institution’s attention prior to payment. In Eurobank Ergasias S.A. v. Bombardier Inc. 2024 SCC 11 (CanLII), the Supreme Court of Canada examined a critical issue of when an issuing bank is required to refuse to honour a demand for payment … Read More
Adjournment Request Denied! Ontario Court Recognizes Arbitral Award from China
In the recent decision of the Ontario Superior Court of Justice (“ONSC”), Xiamen International Trade Group Co., Ltd. v. LinkGlobal Food Inc., 2023 ONSC 6491, the applicant sought the recognition and enforcement of an arbitration judgment of the Xiamen Arbitration Commission (the “Award”). The underlying arbitration dispute related to a contract entered into by the parties wherein the applicant was to purchase protective masks from the respondent for the purchase price of US $532,224.00. The contract between the parties contained an arbitration clause and a choice of law clause providing that the law of the People’s Republic of China governed any dispute over the contract between the parties. In the arbitral proceeding in China, the applicant sought a refund of the purchase price of the masks and compensation for other costs incurred. A panel of three arbitrators unanimously ruled in favour of the applicant and granted the Award. As the … Read More
Website Lawyers | Domain Name Disputes | Counterfeit Websites | Fake Bad Reviews and Remedies
In this blog we discuss a number of internet-based “dirty tricks” that competitors or others may deploy and which may have serious adverse consequences for you or your business. I also briefly mention the types of remedies which may be available to those victimized in this way. Confusingly Similar Domain Names In today’s modern web-based commercial world, it is more important than ever to ensure that potential customers and returning customers are properly connected with your website domain name, and to use domain names that are well-branded and associated with your business. It is not uncommon for competitors, cyber-squatters, or other persons to obtain control of domain names that are confusingly similar to your trademarks, business names, or your domain name. Then there is a real risk that users seeking your website are instead directed elsewhere by that confusingly similar domain name. Recovering a Domain Name In order to recover … Read More
Family Business Litigation | Start Up Company Litigation
We have experience acting for, advising and representing those in closely-held company litigation, both arising from family business disputes and start-up company disputes. Family Business Disputes Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present many unique challenges as they grow, as key members of the company or partnership leave the family business, or when personal relationships of the key members of the family business thereby change or deteriorate. One of the most common differences between a family business and other established businesses, whether or not a shareholders’ agreement, partnership agreement and other legal documentation was used in the formation of the family business, is the informality in operation of the family business, including the often ignored distinction in fact between employees, shareholders, or partners – since family members often take on multiple roles. Please see our webpage on Family and Closely Held … Read More
Divorce and the Family Business
Family Business Challenges from Divorce or Separation Many businesses in Canada are family businesses or have evolved from family businesses. Family businesses present unique challenges as they grow should the personal relationships of the key members of the family business change or deteriorate. Divorce and separation can have serious impact upon family-owned and family-run businesses, whether incorporated companies or partnerships. Changes in a family business and the challenges presented by change can often result in legal disputes between interested parties. Family business disputes are often be protracted, expensive, and disruptive, and may even result in the sale, division or winding up of the family business. Impact of Separation and Divorce on Family Businesses Complex questions arise in the division of property and assets when dealing with a family business during a separation or divorce. The value of the family business may be included in the equalization of net family property … Read More
Service Abroad in Civil and Commercial Litigation
The Hague Service Convention Since 1989 Canada has been a member of Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, (the Hague Service Convention). Incoming Service of Foreign Process We have blogged before about the requirement of the Hague Service Convention that its member States designate a “Central Authority” to accept incoming requests for service. There are alternatives to the Hague Service Convention service of foreign process in Ontario. Service of Ontario Process Abroad As other jurisdictions become, or will become, members of the Hague Service Convention, the Status Table is updated. For instance, see the status of Azerbaijan (November 1, 2023), Singapore (December 1, 2023) and Paraguay (January 1, 2024) on the Status Table. Why Chose Gilbertson Davis LLP? One of the senior commercial litigation lawyers at Gilbertson Davis LLP, though now only practicing in Ontario, has also practiced … Read More
Ontario Superior Court of Justice Finds Expired Arbitration Award Relevant in Motion for Injunctive Relief
In Rogers v. TELUS Communications Inc., 2023 ONSC 5398, the Ontario Superior Court of Justice held that the terms of an expired arbitration decision are relevant when a party seeks injunctive relief that contradicts its terms. The moving and responding parties are both prominent competitors in the Canadian telecommunications market. Under a requirement imposed by the Government of Canada, their customers have the reciprocal ability to “roam” on the other carrier’s network in areas where their own carrier does not provide coverage. This obligation allows Canadian customers to access wireless services across the country. For a time, the parties did not agree on what was displayed to customers when they were roaming on a competitor’s network. The primary dispute was whether the network identifier (“NID”) displayed in the top-left corner of most mobile devices would connote an extension of their own carrier’s network (i.e. “[Carrier]-EXT”), or if it would notify customers … Read More
Ontario Court of Appeal Comments on the Oppression Remedy – Oppression is Focused on Fairness and Equity, not on Legal Rights
In the recent decision of the Ontario Court of Appeal (“ONCA”), Pereira v. TYLT Technologies Inc. (TYLTGO), 2023 ONCA 682, the appellant successfully appealed a judgment dismissing his application for an oppression remedy under the Canada Business Corporations Act, RSC 1985, c C-44 (the “CBCA”). The appellant argued that the application judge erred in only considering the appellant’s expectations as an employee and failing to consider his expectations as a shareholder. The ONCA opined that the application judge took an “overly narrow” approach by placing focus mostly on the documents signed by the parties and not considering all of the circumstances. The ONCA considered some of the major principles related to the oppression remedy, including the following: Oppression is an equitable remedy which seeks to ensure fairness. Thus, conduct found to be oppressive does not need to be “unlawful” per se, because oppression is focused on “fairness and equity”, rather … Read More
Stay of Court Proceedings in Favour of Arbitration – Standard of Proof
In the recent decision Husky Food Importers & Distributors Ltd. v. JH Whittaker & Sons Limited, 2023 ONCA 260, the Ontario Court of Appeal (“ONCA”) reviewed the law of international commercial arbitration, and in particular opined on the issue of the standard of proof that a party needs to meet in order for the court to grant a stay of a court proceeding pursuant to section 9 of the International Commercial Arbitration Act, 2017 (the “Act”), in favour or arbitration. Section 9 of the Act states as follows: Where, pursuant to article II (3) of the Convention or article 8 of the Model Law, a court refers the parties to arbitration, the proceedings of the court are stayed with respect to the matters to which the arbitration relates. The appellant submitted that the proper analytical framework for assessing a request to stay an action under the Act was set out in the … Read More
Recognition of Foreign Judgments and Arbitral Awards – Recent Decision of the Ontario Superior Court of Justice says Ontario Court is Not to Intervene Absent Exceptional Circumstances
The Ontario Superior Court of Justice (“OSCJ”) recently released its decision in Costco Wholesale Corporation v. TicketOps Corporation, 2023 ONSC 573, granting an application to enforce judgments received by the applicant from the United States District Court (Western District of Washington at Seattle) and/or the underlying arbitral awards. At the same time, the OSCJ also rejected the Respondents’ motion to convert the application into an action. Recognition of Awards With regard to the Awards, the OSCJ advises as follows: “In Ontario, foreign arbitral awards are enforceable through the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5 (“ICAA”). The ICAA provides that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”) has force of law in Ontario. The Convention is set out in Schedule 1 to the ICAA. The ICAA also provides that the Model Law on International Commercial Arbitration (“Model Law”) has force of law in Ontario. The Model Law is set out in Schedule 2 to the ICAA.” The OSCJ notes that the Convention and … Read More
Failure To Close A Real Estate Transaction Can Be Very Costly
For many reasons, an agreement of purchase and sale to buy real estate may be breached by either the seller or the purchaser. The innocent party may be entitled to significant compensation. For instance, in the recent Ontario Court of Appeal (ONCA) decision, Rosehaven Homes Limited v. Aluko, 2022 ONCA 817, the ONCA upheld a lower court decision granting summary judgment requiring the appellants to pay damages to the respondent arising from the appellants’ failure to complete an agreement of purchase and sale for the purchase of a home. In that case, the appellants were unable to complete the transaction because they could not obtain sufficient financing. However, the agreement was not conditional on them obtaining financing. The respondent ultimately sold the property at a loss (compared to the sale price agreed to between the parties). The lower court awarded $331,922.27 to the respondent (being the difference between the original … Read More
Court of Appeal Reiterates Limited Scope of Judicial Intervention to Set Aside Arbitral Awards
In the recent Court of Appeal decision of Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, the Court of Appeal overturned a lower court decision setting aside an arbitrator’s award, on the basis that the approach taken by the learned application judge was contrary to that mandated by Alectra Utilities Corporation v. Solar Power Network Inc., 2019 ONCA 254, 145 O.R. (3d) 481, leave to appeal refused, [2019] S.C.C.A. No. 202 (Alectra). Background The Halton Condominium Corporation 137 (HCC 137) located in Oakville has 82 residential units and 166 parking units located within it’s parking garage, along with common elements such as a lobby and elevators. The parking units comprise of parking for the residential unit owners (the Residential Parking) along with 43 commercial parking units (the Commercial Parking) owned by the defendant Mensula Bancorp Inc. (Mensula), Mensula does not own any residential units and its business is located … Read More
Broker and Agent Liability Claims Arbitrator – Reasonable Fees – Good Availability
David Alderson, LL.B, LL.M, Qualified Arbitrator Broker Dispute Arbitrator | Agent Dispute Arbitrator David Alderson is an independent, experienced and qualified Arbitrator. His practice in broker and agent claims in real estate, mortgage, business, securities and investment, insurance and reinsurance, distribution, marine and transportation cases make him an ideal choice as sole or panel arbitrator in broker and agent claims arbitrations. He has been appointed by the courts in commercial arbitration disputes. Broker and Agent Claims Arbitration David can be appointed in arbitrations concerning these professionals: Business (Sale of) Brokers Real Estate Brokers and Agents Realtors Mortgage Brokers Stockbrokers Securities Brokers Commodities Brokers Insurance Brokers and Agents Life Insurance Agents Commercial Brokers Merchandise Broker Shipbrokers Yacht Brokers Freight Brokers Arbitration Expertise David has arbitrated disputes on a wide variety of matters, and has been appointed by the Ontario Superior Court of Justice as sole arbitrator in commercial arbitration matters. He is an arbitrating … Read More
Professional Liability Claims Arbitrator – Experienced and Qualified Arbitrator with Reasonable Fee Rates
Professional Liability Claims Arbitrator David Alderson is an independent, experienced and qualified Arbitrator. Practice in professional liability, professional indemnity and professional negligence cases make him a good choice as sole or panel arbitrator in professional liability claims arbitrations. He has been appointed by the courts in commercial arbitration disputes. Business & Financial Professionals Property and Real Estate Professionals David can be appointed as sole arbitrator concerning claims and disputes involving these professionals: Business & Financial Professionals Directors Officers Accountants Actuaries Auditors Investment Advisors Financial Advisors Financial Planners Financial Analyst Investigators Consultants Trustees Securities Brokers Valuators Lawyers Partners Joint Venture Parties Retirement Plan Administrators Property and Real Estate Real Estate Brokers Real Estate Agents Stakeholders Fiduciaries Architects Engineers Auctioneers Lawyers Fiduciaries Trustees Estate Trustees Administrators Executors Receivers Trustees in Bankruptcy Lawyers Arbitration Expertise David has arbitrated disputes on a wide variety of matters, and has been appointed by the Ontario Superior … Read More