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Canadian Supreme Court shortens time to collect foreign arbitration awards

Ruling makes it tough to enforce awards.

The Supreme Court of Canada’s May decision in Yugraneft v. Rexx Management Corporation leaves many foreign arbitration awards, including those obtained by U.S. companies against Canadian businesses, with a relatively short shelf life. The court affirmed Alberta’s two-year limit for collecting arbitration awards, a time frame that could make it difficult to enforce awards against debtors who have spread their assets over multiple jurisdictions, making the assets difficult to find and mandating enforcement in a host of jurisdictions.

“For a countrythat holds itself out as arbitration friendly, the Supreme Court of Canada’s decision in Yugraneft is a bit of an embarrassment—not as a matter of judicial policy but as a matter of statutory drafting,” says Joel Richler, a litigation partner at Blake, Cassels & Graydon. “Still, the decision is a slap in the face to the international arbitration bar and inconsistent with Canadian attempts to promote the country as an arbitration venue.”

Reputation Question

Though some argue Yugraneft will change the perception that Canada is arbitration friendly, Barry Leon, an international arbitration partner at Perley-Robertson, Hill & McDougall, says the decision won’t necessarily impair its reputation.


Julius Melnitzer

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