Collavino Inc. v. Tihama Development Authority (TDA) an Organ of the Republic of Yemen

• Jurisdiction: Alberta
• Court: Court of Queen's Bench of Alberta (Canada)
• Judge: Wittman,Wittmann
• Neutral Citation: 2007 ABQB 212
• Citation: 2007 ABQB 212,(2007), 420 A.R. 89 (QB),420 AR 89,(2007), 420 AR 89 (QB),420 A.R. 89
• Date: 24 January 2007

Collavino Inc. v. Tihama Dev. Authority (2007), 420 A.R. 89 (QB)

MLB headnote and full text

Temp. Cite: [2007] A.R. TBEd. MY.084

Collavino Incorporated (respondent/applicant) v. Tihama Development Authority (TDA) an Organ of the Republic of Yemen (applicant/respondent)

(0501 05991; 2007 ABQB 212)

Indexed As: Collavino Inc. v. Tihama Development Authority (TDA) an Organ of the Republic of Yemen

Alberta Court of Queen's Bench

Judicial District of Calgary

Wittmann, A.C.J.Q.B.

May 7, 2007.

Summary:

Collavino Inc. and the Tihama Development Authority (TDA) entered into a contract for constructing water canals and works in Yemen. Disputes arose. Collavino obtained an international commercial arbitration award against the TDA. The arbitration tribunal ruled that the only parties were the TDA and Collavino and that Yemen was not a party. Collavino brought an action in Alberta for recognition and enforcement of the award and obtained an ex parte order granting Collavino the ability to garnishee entities allegedly indebted to Yemen. Yemen sought a permanent stay or dismissal of the action against it under the State Immunity Act.

The Alberta Court of Queen's Bench held that the award could not be enforced against Yemen. The action as against Yemen was dismissed. The action as against the TDA as an entity distinct from Yemen could proceed.

Arbitration - Topic 5694

The award - Enforcement of award - Foreign awards - General - [See Conflict of Laws - Topic 4883 , International Law - Topic 2202 and International Law - Topic 2204 ].

Conflict of Laws - Topic 4883

Property - Personalty - Choice of law - Collavino Inc. and the Tihama Development Authority (TDA) entered into a contract for constructing water canals and works in Yemen - Disputes arose - Collavino obtained an international commercial arbitration award against the TDA - Collavino brought an action in Alberta for recognition and enforcement of the award and obtained an ex parte order granting Collavino the ability to garnishee entities allegedly indebted to Yemen - Yemen sought to dismiss or stay the action against it under the State Immunity Act - At issue was whether the TDA was a separate entity from Yemen - The Alberta Court of Queen's Bench held that the TDA was an organ of Yemen, separate from Yemen, such that Collavino's award against the TDA could not be enforced against Yemen, either on the basis that the TDA was Yemen or on the alter ego doctrine - The criteria used in the alter ego test were relevant, namely issues concerning control, ownership of assets and conduct of legal proceedings - Yemeni law was essential to the determination of the TDA's status as it governed the TDA's creation, status, duties and financial and managerial independence - However, Yemeni law was not to be examined without regard for Canadian concepts - Based on Canadian law, the TDA was not an alter ego of Yemen - Yemeni law led to the same conclusion - See paragraphs 67 to 121.

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process - Collavino Inc. and the Tihama Development Authority (TDA) entered into a contract for constructing water canals and works in Yemen - Disputes arose - Collavino obtained an international commercial arbitration award against the TDA - The arbitration tribunal ruled that the only parties were the TDA and Collavino and that Yemen was not a party - Collavino brought an action in Alberta for recognition and enforcement of the award and obtained an ex parte order granting Collavino the ability to garnishee entities allegedly indebted to Yemen - Yemen sought to dismiss or stay the action against it under the State Immunity Act - At issue was whether the arbitration award regarding the status and identity of the parties was final and binding - The Alberta Court of Queen's Bench held that the award was against the TDA, not Yemen - It would be an abuse of process for the issue to be raised again - Although it was a harsh and unacceptable result for Collavino that the TDA's structure effectively resulted in avoidance of payment, this was not a special circumstance that would allow relitigation - While in the narrow sense, issue estoppel did not apply as there was no mutuality of parties, this was an area where the court exercised its inherent jurisdiction to prevent an abuse of process - See paragraphs 45 to 66.

Estoppel - Topic 377

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - When applicable - [See Courts - Topic 2015 ].

Estoppel - Topic 398

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Exceptions - Special circumstances - [See Courts - Topic 2015 ].

International Law - Topic 2202

Sovereignty - Incidents of - Immunity - Exceptions - Proceedings relating to commercial activity of foreign state - Acta gestionis - Collavino Inc. and the Tihama Development Authority (TDA) entered into a contract for constructing water canals and works in Yemen - Disputes arose - Collavino obtained an international commercial arbitration award against the TDA - Collavino brought an action in Alberta for recognition and enforcement of the award and obtained an ex parte order granting Collavino the ability to garnishee entities allegedly indebted to Yemen - Yemen sought to dismiss or stay the action against it under the State Immunity Act - The court concluded that the TDA was an agency of Yemen within the meaning of the Act - At issue was whether the commercial activity exception from state immunity (s. 5) applied - The Alberta Court of Queen's Bench held that the exception applied - The particular transaction from which the proceedings arose was the contract for construction of water canals and works - Accepting that the purpose of the TDA was public, not commercial, did not detract from the plain, obvious and ordinary meaning of "commercial activity" - While the action against Yemen was dismissed, Collavino's action against the TDA could proceed - See paragraphs 122 to 135.

International Law - Topic 2204

Sovereignty - Incidents of - Immunity - Waiver - Collavino Inc. and the Tihama Development Authority (TDA) entered into a contract for constructing water canals and works in Yemen - Disputes arose - Collavino obtained an international commercial arbitration award against the TDA - Collavino brought an action in Alberta for recognition and enforcement of the award and obtained an ex parte order granting Collavino the ability to garnishee entities allegedly indebted to Yemen - Yemen sought to dismiss or stay the action against it under the State Immunity Act - The court concluded that the TDA was an organ of Yemen, separate from Yemen, such that Collavino's award against the TDA could not be enforced against Yemen, but the TDA was an agency of Yemen within the meaning of the State Immunity Act - At issue was whether the TDA had waived immunity - The Alberta Court of Queen's Bench held that the TDA had waived immunity for enforcement purposes - It did so by agreeing to international commercial arbitration - Otherwise, the effect of an award could be thwarted by successfully claiming state immunity in jurisdictions where the TDA had exigible assets - While the action against Yemen was dismissed, Collavino's action against the TDA could proceed - See paragraphs 136 to 139.

International Law - Topic 2206

Sovereignty - Incidents of - Immunity - Foreign agencies (incl. state owned corporations) - [See Conflict of Laws - Topic 4883 ].

Cases Noticed:

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 51].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 55].

Doering v. Grandview (Town), [1976] 2 S.C.R. 621; 7 N.R. 299, refd to. [para. 55].

574095 Alberta Ltd. v. Hamilton Brothers Exploration Co. et al. (2003), 320 A.R. 351; 288 W.A.C. 351; 2003 ABCA 34, refd to. [para. 56].

Royal Bank of Canada v. Elpat Holdings Ltd. (1990), 108 A.R. 59; 74 Alta. L.R.(2d) 207 (Q.B.), refd to. [para. 57].

TMR Energy Ltd. v. State Property Fund of Ukraine (2003), 244 F.T.R. 1; 2003 FC 1517 (Protho.), dist. [para. 58].

Norsk Hydro ASA v. State Property Fund of Ukraine, [2002] E.W.H.C. 2120 (Comm.), refd to. [para. 60].

International Association of Science and Technology for Development et al. v. Hamza (1995), 162 A.R. 349; 83 W.A.C. 349 (C.A.), refd to. [para. 73].

Foresight Shipping Co. v. Union of India et al. (2004), 260 F.T.R. 161; 2004 FC 1501, refd to. [para. 74].

Roxford Enterprises S.A. v. Cuba et al. (2003), 236 F.T.R. 1; 2003 FCT 763 (Protho.), appld. [para. 75].

Ferranti-Packard Ltd. v. Cushman Rentals Ltd. (1981), 30 O.R.(2d) 194 (Div. Ct.), affd. (1981), 31 O.R.(2d) 799 (C.A.), appld. [para. 77].

Trendtex Trading Corp. v. Central Bank of Nigeria, [1977] 1 Q.B. 529 (C.A.), refd to. [para. 78].

Ferguson v. Arctic Transportation Ltd. et al., [1995] 3 F.C. 656; 101 F.T.R. 16 (T.D.), refd to. [para. 81].

Bridas S.A.P.I.C. v. Turkmenistan (Government) (2006), 447 F.3d 411 (5th Cir.), refd to. [para. 83].

S & Davis International v. Yemen (Republic) (2000), 218 F.3d 1292 (11th Cir.), refd to. [para. 85].

D & J Coustas Shipping Co. S.A. v. Cia de Navegacao Lloyd Brasileiro (1990), 48 F.T.R. 161 (T.D.), refd to. [para. 118].

Croteau et al. v. Federal Trade Commission, [2006] O.A.C. Uned. 26; 22 C.P.C.(6th) 320 (C.A.), refd to. [para. 119].

Reference Re Canada Labour Code and State Immunity Act (Can.) [1992] 2 S.C.R. 50; 137 N.R. 81, refd to. [para. 124].

Western Surety Co. v. Elk Valley Logging Ltd. (1985), 23 D.L.R.(4th) 464 (B.C.S.C.), refd to. [para. 126].

Athabasca Chipewyan First Nation v. Canada (Minister of Indian Affairs and Northern Development) et al. (2001), 281 A.R. 38; 248 W.A.C. 38 (C.A.), refd to. [para. 126].

Authors and Works Noticed:

Lange, Donald J., The Doctrine of Res Judicata (2nd Ed. 2004), p. 385 [para. 54].

Redfern, Alan, and Hunter, Martin, Law and Practice of International Commercial Arbitration (4th Ed. 2004), p. 421 [para. 53].

Williams, Sharon A., and de Mestral, A.L.C., An Introduction to International Law (2nd Ed. 1987), pp. 149, 150 [para. 118].

Counsel:

L. Leighton Decore (Biamonte Cairo & Shortreed) and J. Hewitt (Paroian Skipper Hewitt), for the respondent/applicant;

David R. Haigh, Q.C., and Paul A. Beke (Burnet Duckworth & Palmer LLP), for the applicant/respondent.

This application was heard on January 24, 2007, by Wittman, A.C.J.Q.B., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on May 7, 2007.