TMR Energy Ltd. v. State Property Fund of Ukraine

• Jurisdiction: Newfoundland and Labrador
• Court: Supreme Court of Newfoundland and Labrador (Canada)
• Judge: Hall, J.
• Citation: (2004), 245 Nfld. & P.E.I.R. 191 (NLTD),2004 NLSCTD 244
• Date: 16 November 2004

TMR Energy v. State Prop. Fund (2004), 245 Nfld. & P.E.I.R. 191 (NLTD);

  730 A.P.R. 191

MLB headnote and full text

Temp. Cite: [2004] Nfld. & P.E.I.R. TBEd. DE.031

TMR Energy Ltd., a duly constituted legal person incorporated under the laws of Cyprus (applicant) v. State Property Fund of Ukraine, an organ of the State of Ukraine (respondent) and Aviation Scientific Technical Complex named after OK Antonov (ANTK Antonov), a State Enterprise duly constituted as a legal person under the laws of Ukraine (first intervenor) and State of Ukraine (second intervenor)

(200301T3328; 2004 NLSCTD 244)

Indexed As: TMR Energy Ltd. v. State Property Fund of Ukraine

Newfoundland and Labrador Supreme Court

Trial Division

Hall, J.

December 17, 2004.

Summary:

TMR Energy applied to have a foreign arbitral award granted in its favour against State Property Fund of Ukraine (SPF) recognized and enforced pursuant to the Convention on the Recognition and Enforcement of Arbitral Awards. Justice Dunn granted an ex parte interim order that the award be recognized and enforced in the province in the same manner as a judgment of the court. Justice Thompson granted an order continuing Justice Dunn's interim order until further order of the court. Throughout the proceedings, and in proceedings before the Federal Court, TMR's position had been that SPF was an organ of the State of Ukraine and that the property of the State of Ukraine was available to satisfy the arbitral award against SPF. That position had led to the seizure of an aircraft allegedly owned by the State of Ukraine, while the aircraft was in the course of performing a contract between ANTK Antonov and the State of Italy. SPF applied to set aside the orders of Justice Dunn and Justice Thompson. Antonov and the State of Ukraine (intervenors) also argued to have the orders set aside.

The Newfoundland and Labrador Supreme Court, Trial Division, vacated the orders of Justice Dunn and Justice Thompson on the basis of material nondisclosure with respect to state immunity issues, which TMR was aware of, but did not disclose to those Justices. Additionally, the court vacated the Thompson Order on the ground that s. 10(1) of the State Immunity Act provided that "no further step toward judgment" could be taken until 60 days following the date of service of the originating document on the foreign state. That period had not expired on the date of the hearing before Justice Thompson. The aircraft was to be released to Antonov.

Arbitration - Topic 5694

The award - Enforcement of award - Foreign awards - General - On an application by TMR Energy, Justice Dunn granted an ex parte interim order that a foreign arbitral award granted in favour of TMR against State Property Fund of Ukraine (SPF) be recognized and enforced in the province in the same manner as a judgment of the court - Justice Thompson granted an order continuing Justice Dunn's interim order until further order of the court - TMR's position throughout had been that SPF was an organ of the State of Ukraine and that the property of the State of Ukraine was available to satisfy the arbitral award - The Newfoundland and Labrador Supreme Court, Trial Division, set aside the orders of Justice Dunn and Justice Thompson on the basis of material nondisclosure where TMR was aware of state immunity issues, but did not disclose them to the Justices - Additionally, under s. 10(1) of the State Immunity Act "no further step toward judgment" could be taken until 60 days after service of the originating document on the foreign state - That period had not expired on the date of the hearing before Justice Thompson - See paragraphs 35 to 63.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See Estoppel - Topic 390 ].

Estoppel - Topic 390

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Jurisdiction of court in previous action - The Newfoundland and Labrador Supreme Court, Trial Division, stated that in order for res judicata and issue estoppel to apply, there could not be any question possible with respect to the jurisdiction ratione materiae of the court whose earlier pronouncements were said to constitute res judicata and issue estoppel - That was not the case where an appeal of the earlier court's decision was pending and it was still open to the appeal court to decide that the earlier court did not have jurisdiction ratione materiae - See paragraphs 69 to 74.

International Law - Topic 2216

Sovereignty - Incidents of - Immunity - Practice - [See Arbitration - Topic 5694 ].

Practice - Topic 5779

Judgments and orders - Interlocutory or interim orders or judgments - What constitutes - Justice Dunn granted an "Interim Order on Application (ex parte)", which ordered that a foreign arbitral award "be recognized and enforced in the province in the same manner as any other judgment of this court" - Justice Thompson granted an order which stated that the interim order of Justice Dunn "shall be continued until further order of this court" - The Newfoundland and Labrador Supreme Court, Trial Division, held that, notwithstanding the wording of Justice Dunn's order that "the award be recognized and enforced", its true nature was an interim order - The wording of Justice Thompson's order, that the interim order of Justice Dunn "shall be continued", did not convert the interim nature of Justice Dunn's order into a final order - Justice Thompson was doing no more than preserving the status quo and his order was an interim order - See paragraphs 28 to 34.

Practice - Topic 5802

Judgments and orders - Ex parte orders - Duty of applicant - [See Arbitration - Topic 5694 ].

Practice - Topic 5807

Judgments and orders - Ex parte orders - Review of - The Newfoundland and Labrador Supreme Court, Trial Division, stated that "the single most important consideration in any review of an ex parte order under rule 29.13, based upon non-disclosure, is whether the information alleged not to have been disclosed is 'material' and ... is a 'fact ... that may or might affect the outcome of an application.' Whether the non-disclosure arises by reason of accident, negligence, honestly but erroneously-held belief as to materiality, or by deliberate deceit or omission, it is the materiality of the facts omitted which should govern. It is not necessary for the reviewing court, under rule 29.13 to have decided that the material fact or facts omitted would have affected the outcome of the application. It is simply necessary to determine that they 'may or might' affect the outcome" - See paragraph 57.

Practice - Topic 6254

Judgments and orders - Setting aside orders - Ex parte orders - [See Arbitration - Topic 5694 ].

Cases Noticed:

Canadian Paraplegic Association (Newfoundland and Labrador) Inc. v. Sparcott Engineering Ltd. et al. (1997), 150 Nfld. & P.E.I.R. 203; 470 A.P.R. 203 (Nfld. C.A.), refd to. [para. 53].

Evans v. Silicon Valley IPO Network et al. (2004), 195 B.C.A.C. 137; 319 W.A.C. 137; 2004 BCCA 149, refd to. [para. 55].

Volhoffer v. Volhoffer, [1925] 2 W.W.R. 304 (Sask. C.A.), refd to. [para. 58].

TMR Energy Ltd. v. State Property Fund of Ukraine (2003), 244 F.T.R. 1; 2003 CarswellNat 4117; 2003 FC 1517, refd to. [para. 60].

Tritt v. United States of America et al. (1989), 68 O.R.(2d) 284 (H.C.), refd to. [para. 61].

Softrade Inc. v. United Republic of Tanzania (Minister of Water and Livestock Development) et al., [2004] O.T.C. 482 (Sup. Ct.), refd to. [para. 61].

Toronto (City) et al. v. Canadian Union of Public Employees, Local 79 et al. (2003), 311 N.R. 201; 179 O.A.C. 291; 2003 SCC 63, refd to. [para. 70].

Statutes Noticed:

Rules of Court (Nfld. & Lab.), Supreme Court Rules, rule 29.13 [para. 57].

Authors and Works Noticed:

Castel, Jean-Gabriel, Canadian Conflict of Laws (5th Ed. 2002), para. 14.6 [para. 72].

Halsbury's Laws of England (4th Ed. - Re-issue) para. 966 [para. 73].

Spencer-Bower, George S., Turner, Alexander Kingcome, and Handley, K.R., The Doctrine of Res Judicata (3rd Ed. 1996), para. 167 [para. 71].

Counsel:

Augustus Lilly, Q.C., Richard Desgagnes, Azim Hussain and Brenda Horrigan, for TMR Energy Ltd.;

Paul McDonald and George Pollack, for State Property Fund;

Thomas Heintzman, O.C., Q.C., Peter Browne and Reagan O'Dea, for ANTK Antonov;

Frank Newbould, Q.C., Lubomir Kozak, Q.C., Thomas Kendell, Q.C., Stacey O'Dea, for State of Ukraine.

This application was heard on October 6, 7, 21, 22, 28, 29 and November 16, 2004, before Hall, J., of the Newfoundland and Labrador Supreme Court, Trial Division, who delivered the following decision on December 17, 2004.