Enforcing Foreign Judgements and Arbitral Awards in Canada
Overview
Enforcing foreign judgements and arbitral awards in Canada relies on three legal pathways: treaty, legislation, and common law. Creditors must prove a “real and substantial connection” and comply with strict procedural and limitation rules. Canadian courts generally uphold foreign judgements and arbitral awards that are final, fair, and properly served, showing strong deference to international tribunals under the New York Convention and UNCITRAL Model Law. The focus is on recognition, not re-litigation.
Introduction:
This article is the third in a three-part series on enforcing judgements in Canada. It focuses on the recognition and enforcement of foreign and extra-provincial judgements, as well as international arbitral awards. While the process is generally creditor-friendly, success depends on establishing jurisdictional connection, procedural compliance, and finality. Canadian courts emphasize recognition over re-litigation and show strong deference to properly conducted foreign proceedings and arbitral tribunals.
Methods of Enforcing Foreign Judgements in Canada
There are three methods of enforcing a foreign judgement in Canada: 1. By treaty; 2. By legislation and 3. Common law. By “foreign” we mean judgements rendered in one province brought to another, or judgements rendered offshore brought to Canada for enforcement.
This article focusses mainly upon money judgements. It is possible, however, to register certain foreign judgements for non-monetary awards (see for example: Pro Swing v. Elta Golf Inc. 2006 SCC 52). In those cases, our Courts will look to the same type of factors discussed in the common law section below.
It is also possible to register foreign judgements in cases of interim relief.
Canadian courts will not enforce judgements for taxes and penalties or indeterminate money orders.
By Treaty:
The Federal Government and Provinces in Canada reciprocate with certain offshore foreign jurisdictions for the reciprocal enforcement of judgements. Put another way, there are treaties where the treaty parties agree each that other’s systems of justice are sound and a matter should not be relitigated. For example, federally Canada and the United Kingdom have the Convention for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters, ratified as the Canada-United Kingdom Civil and Commercial Judgments Convention Act, RSC 1985, c C-30, respecting and enforcing each other’s judgements.
However, Canada is not a signatory to Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters. As such, subject to another applicable treaty, a creditor must employ either the common law techniques discussed below, or a relevant statute.
British Columbia, again by way of the COEA, reciprocates with other provinces, the UK, Australia and several US states to register BC judgements and orders. Significantly, however, BC does not reciprocate with the State of California.
Assuming a treaty applies, the foreign judgement may be registered in the court registry of the receiving province. However, it should be noted that registration is not always automatic. The Canadian courts always maintain a supervisory role over registrations and may intervene. This is a significant source of case law.
By Legislation:
Major Canadian provinces such as BC (COEA) and Ontario and others have passed legislation recognizing each other’s judgements.
The Supreme Court of Canada dealt with the issue of “boomerang judgements” in HMB Holdings Ltd. v. Antigua and Barbuda, 2021 SCC 44.
A boomerang judgement is where are an offshore creditor has a foreign judgement recognized in one province and then asks a court in another jurisdiction to recognize the judgement. In HMB Holdings, the top court upheld a decision of the Ontario Court of Appeal’s refusing to accept an application to register a decision by the British Columbia Supreme Court which in turn recognized an order obtained in default in the UK.
The decision hinged upon what was “carrying on business”. The Court held that the debtor must have an actual presence in the receiving jurisdiction, not a virtual one, such as by way of advertising. Actual presence could be maintaining an office, or visits by company personnel to the receiving jurisdiction. None of those factors existed in the case, and the attempt to register the BC judgement failed.
Common Law:
The common law test enunciated for enforcement in Canada of a foreign money judgement i.e. extra-provincial, is set forth in the seminal Morguard Investments Ltd. v. De Savoye 1990 3 SCR 1440. In that case, the SCC enunciated the “real and substantial connection” test between the province where registration is sought and the foreign jurisdiction, being another province in Canada. The Court held that such a connection could be established even if the creditor had not attorned to the receiving province’s jurisdiction and even if the debtor did not explicitly do business in that province.
The case marks a moving away from strict and rigid rules about the physical doing of business in the receiving jurisdiction to a more flexible standard.
Statement of Claim
The preferred procedure is for the creditor seeking to enforce its judgement extra-territoriality to file a Statement of Claim (Ontario) or Notice of Civil Claim (British Columbia) in a court registry near the debtor’s assets. The claim does not need to go through the underlying facts of the dispute which led to the foreign judgement in any kind of exhaustive detail. Rather, the claim should set forth the fact of the foreign judgement itself; the basis upon which registration is sought; and that the foreign matter is final – all appeals have been exhausted by the debtor.
In other words, the creditor holding the foreign judgment is not relitigating the case. In turn, the Canadian court will not relitigate the case either, assuming the factors set forth above are present.
In British Columbia, Alberta and Prince Edward Island, no notice is required in the province if, in the foreign jurisdiction, the debtor had notice of the underlying claim and where any relevant appeal period has expired in the foreign jurisdiction.
Attention must be paid to Canadian limitation statutes. For example, in Ontario there is a two-year limitation period that begins to run from the making of the final order in the foreign jurisdiction to filing the claim seeking to register the judgement.
Once there is a filed claim, and assuming there is proper service upon the debtor in a receiving jurisdiction that requires service (which can become very complicated), the creditor moves forward on a summary basis. In BC, Rule 9-7 allows trials based on affidavits rather than the time and expense of full trials with live witnesses. Most enforcement cases are determined by way of summary trial procedures.
A Canadian court will generally enforce a foreign money judgement where:
- The foreign issuing tribunal is a judicial body
- Did the debtor attorn to the receiving province’s jurisdiction or is there a “real and substantial” connection?
- Was the foreign judgement a final order? Is the matter concluded with finality in the foreign jurisdiction?
- Is there any evidence of fraud or other misconduct by the creditor in obtaining the order in the foreign jurisdiction that would cause a Canadian court to refuse registration?
However, it should be noted that when a debtor realizes that a determined creditor has followed it to Canada, it will sometimes turn and fight, by attacking the factors set forth above in an attempt to convince a Canadian court that there should be a full trial in Canada on the merits.
For example, a debtor may argue that material facts that underpin the foreign judgement remain very much in dispute. In Lonking (China) Machinery Sales v. Zhao, 2019 BCSC, the BC Court refused to summarily register a judgment obtained by the Plaintiff in China. Defendant Zhao raised defences of fraud and breach of natural justice in the BC summary trial. The Court ruled it was unable to make the necessary inferences to determine those defences on the basis of affidavits alone. The Court ruled that the defences were worthy of a full trial and noted that the amount at stake, $5 million, was sufficiently weighty that the matter should go to the Trial list.
In Liu v. Luo, 2018 BCSC 1237, the BC Court was concerned whether the Chinese Court had followed its own rules of procedure in terms of service upon the Defendant Luo. The amount of money at stake was significant – $2 million. The Court held it would be inappropriate to resolve the factual and procedural concerns raised by Defendant Luo on the basis of a summary trial and remitted the matter to the Trial list.
- ARBITRAL AWARDS
Canadian courts generally accord foreign arbitral awards a high degree of deference.
Treaties
There are a number of treaties that pertain. The recognition and enforcement of foreign arbitral awards is governed by the applicable international arbitration acts adopted by the provinces.
Canada has also passed the United Nations Foreign Awards Convention Act, RSC, c 16 (2nd Supp), implementing the New York Convention, but reserved recognition to commercial arbitral awards.
Canada also passed the Commercial Arbitration Act RSC 1985, c 17 (2nd Supp), which adopts the UNCITRAL Model Law on International Commercial Arbitration (1985) (the “Model Law”). The provinces have also adopted the Model Law.
Canada is also a party to and has implemented the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 18 March 1965.
Provincial Registration of Foreign Arbitral Awards
A British Columbia case from 2014 is instructive. In Assam Company India Ltd. v. Canoro Resources Ltd., 2014 BCSC 370, in India, an Indian company, Assam, invoked an arbitration clause in an agreement made in that country against Canoro, a BC-registered company, for breach of contract. For awhile, Canoro answered the arbitration notice of dispute and made various submissions about the appropriateness of the individuals on the three-Panel of Arbitrators and other arguments.
Then, Canoro left the field; refused to participate further in the litigation. The Indian arbitration proceeded in its stead. Without Canoro present, the arbitral panel nonetheless put Assam to the proof of its case, which Assam achieved. Judgement in the amount of $32 million and transfer of 52.9% of Canoro’s shares to Assam was rendered in Assam’s favour.
Assam came to Canada to register the arbitral judgement as a judgement of the BC Court according to section 35 of the International Commercial Arbitration Act, RSBC 1996 c.233.
Canoro, realizing its peril, that Assam had come to Canada, raised a buffet of defences before the BC court: procedural irregularities in India; that, in India, the “deck was stacked against it”; Canoro’s repeated complaints about capacity of one of the arbitrators; arbitral jurisdiction over the dispute; and in summary, that in Canada the whole matter should be relitigated on the trial list.
Beginning at paragraph 42, the BC Court distilled the relevant principles as follows:
1. Broad deference and respect is to be accorded to international arbitration tribunals;
2. The Court is generally not empowered to scrutinize the arbitrator’s findings on matters of jurisdiction but rather it should accept the arbitrator’s decision on its face and ought not go behind it;
3. It is not the role of the court on this type of application to consider the merits of a substantive issue that was the arbitrators’ to decide;
4. Nor is it proper for the respondent to try and re-litigate these issues in Canada; if the respondent wanted to challenge the jurisdiction or composition of the arbitral tribunal or any of its decisions on the merits, the respondent ought to have taken steps to do so in another forum;
5. The fact that the respondent’s initial objections to the jurisdiction, composition or procedures of the arbitral tribunal were unsuccessful does not give rise to a basis for refusing recognition or enforcement of the arbitral award in this jurisdiction; and,
6. The “contrary to public policy” ground for refusing recognition or enforcement is to be narrowly construed and requires fundamental breaches of justice and fairness and conduct of a sort that could not be tolerated or condoned by BC courts.
The Court refused all of Canoro’s arguments against registering the Indian arbitral award as a Canadian award, and stated:
[53] Canoro took a high risk strategic decision when it opted to abandon both its petition to the Supreme Court of India and its further participation in the arbitration. Having done so, it now seeks to re-litigate before this Court the same objections raised in India, labeling them as “triable issues” of the sort that warrant rejection of Assam’s petition in favor of further discovery and ultimately a full trial here in British Columbia.
[54] I find, however, that in accordance with the legal principles articulated above, Canoro is not entitled to re-litigate its case in British Columbia. It could have and should have pursued the procedural and legal options available to it in India. It did not do so and it must live with the consequences.
Conclusion
Canada’s framework for enforcing foreign judgements and arbitral awards is designed for efficiency, not re-litigation. Courts defer to properly conducted foreign proceedings and international arbitral tribunals, emphasizing finality and procedural fairness. Creditors who act within limitation periods and comply with procedural requirements can expect strong judicial support,while debtors who delay or relitigate rarely find refuge.
Related articles:
Post-Judgement Execution in British Columbia: From Paper to Payment
Identifying Assets in Canada Before and After Judgement
Pre-Judgement Remedies in British Columbia: Securing Recovery Before Trial