Enforcement of Foreign Judgments – Arbitration
Awards – Limitation Periods
Yugraneft, a Russian corporation, purchased materials for its
oilfields operations from Rexx, an Alberta corporation. A
contractual dispute led to Yugraneft commencing arbitration
proceedings before the International Commercial Arbitration Court
in Russia. The tribunal ordered Rexx to pay nearly $1M USD to
Yugraneft in September 2002. In January 2006, Yugraneft applied to
the Alberta Court of Queen's Bench for recognition and
enforcement of the award. The court dismissed the application,
ruling it was time-barred under the two-year statutory limitation
period in Alberta. The Court of Appeal and the Supreme Court of
Canada both dismissed Yugraneft's appeals.
The Supreme Court of Canada held that, under international
arbitration law, the matter of limitation periods is left to local
procedural law of the jurisdiction where recognition and
enforcement is sought. The grounds set out in the New York
Convention and the Model Law on which recognition and enforcement
of awards can be refused are silent on limitation periods. However,
the Convention stipulates recognition and enforcement shall be in
accordance with local rules of procedure. It permits, but does not
require, a jurisdiction to make enforcement of an award subject to
a time limit.
As an arbitral award is not a judgment or court order for the
payment of money, the two-year limitation period that applies to
most causes of action in Alberta applied. The argument by an
intervenor that no time limit may be imposed that is more onerous
than the most generous time limit available anywhere in Canada was
rejected. This position is at odds with the federalism principles
embodied in Canada's Constitution.
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