The Lawyers Weekly - June 18, 2010

Yugraneft
Continued From Page 9

The Convention, known as the New York Convention, requires all contracting states to recognize and enforce arbitral awards made in another state’s territory (except in enumerated circumstances).

Ratified and implemented by
all Canadian provinces, the Con-
vention also stipulates in art. III
that the recognition and enforce-
ment of foreign arbitral awards
shall be “in accordance with the
rules of procedure of the territory
where the award is relied upon.”
Lead counsel for Rexx, David
Haigh of Calgary’s Burnet Duck-
worth & Palmer, said not many
courts in the world have considered
the applicability of limitations per-
iods to applications for the recogni-
tion and enforcement of foreign
arbitral awards under the New
York Convention. “I think Yugra-
neft is a leading case in this realm,”
he told The Lawyers Weekly.

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tion law, the matter of limitation
periods is left to local procedural
law of the jurisdiction where recog-
nition and enforcement is sought,”
Justice Rothstein wrote. “The
applicable limitation period in this
case must therefore be found in the
limitations law of Alberta.”
The upshot is that foreign arbi-
tral creditors seeking to enforce
their awards in Canada face a
patchwork of provincial limitation
periods which vary, for example,
from two years in Alberta to 10
years in B.C. and Quebec.

By comparison, across the U. S. (where enforcement of international arbitral awards falls within federal jurisdiction), the period is three years.

Arbitration lawyer Babak Barin
of Montreal’s BCF LLP, counsel for
the intervener ADR Chambers,
told The Lawyers Weekly his client’s
position was “that ideally there
should be one limitation period
across the country. Canada is one
country—we have obviously got
provinces—but we are dealing
with an international treaty.”
Added Barin, “what [the judg-
ment] does is it allows for a not-
so-harmonized application of an
international treaty that, in my
view, was intended to be applied
uniformly.”
The judgment will certainly
fuel existing calls for the creation
of a universally applicable limita-
tion period which could be imple-
mented, for example, by amend-
ing the New York Convention to
require contracting states to com-
mit to a uniform limitation per-
iod. Meanwhile, Canada’s prov-
inces may also choose to
harmonize their limitation laws
for both foreign arbitral awards
and foreign judgments, while for-
eign companies working with
Canadian companies may seek
contractual assurances limiting
the downside risk of their future
international arbitration awards
not being enforced in Canada.

Although Yugraneft knew its supplier was from Alberta and obtained its arbitration award on Sept. 6, 2002, the Russian company did not apply to the Alberta Court of Queen’s Bench to recognize and enforce that award until Jan. 27, 2006—more than three years after the award was made.

Rexx was able to convince all three Canadian court levels that Yugraneft’s application was time-barred by Alberta’s general two-year limitation period contained in s. 3 of the Limitations Act.

The Supreme Court rejected Yugraneft’s argument that its award was covered by the 10-year limitation period in s. 11 of the Limitations Act, which specifically applies to judgments and court orders for the payment of money.