Typically, recognition and enforcement of a foreign Arbitral Award is sought against the judgment debtor. In this instance, a Chilean company (the Applicant) sought to enforce a Chilean Arbitral Award in Ontario against an Italian company (the Respondent) that was not party to the arbitration. The Respondent purchased certain assets of the unsuccessful party to the arbitration following restructuring proceedings in Italy.
Although the Respondent has presence in Ontario, several factors swayed in favour of Italy, including the contract whereby the Respondent purchased the assets is governed by Italian law, the Respondent's witnesses are in Italy and most of the relevant documents are in Italian. A multiplicity of proceedings is also a significant risk, If the Ontario Court was to determine the threshold issues on the merits as part of the recognition and enforcement proceedings. The Applicant equally pursued enforcement proceedings in Quebec and Delware which increase the risk of conflicting judgments.
The Court granted temporary stay of the enforcement proceedings in Ontario pending the outcome of the proceedings in Italy because Ontario is not the convenient forum (forum non conveniens) to determine whether the Respondent assumed the liabilities and obligations of the unsuccessful party to the arbitration. A delay in the Applicant's ability to enforce the Arbitral Award in Ontario was found to be a reasonable price for preventing unnecessary and costly duplication of judicial and legal resources.
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