Cross Border Litigation & Arbitration

Globalization has fundamentally changed the scope and dynamics of international trade and business relations. Canada is a major player in world markets. Canada is a member of NAFTA, arguably the single most important trade agreement in the world. Our country has aggressively pursued and achieved several major trade agreements with countries around the world, most notably with several countries in Latin America. The watchword for our federal trade negotiators as well as Canadian businesses actively engaged in trade has been "diversification". There is a growing acceptance that Canada's business community must continue to pursue and achieve a diverse stream of trade relationships and partners.

The result of this trend has been greatly enhanced trade in everything from natural resources and manufactured goods to services. The related consequence of this global commercial landscape is the necessity for legal expertise that addresses the unique challenges of cross-border transactions and disputes.

At Cambridge LLP our Cross-Border Litigation Group has a vast amount of experience with legal issues arising from cross-border business relationships. We are committed to providing our clients with the best possible service and most effective solutions with respect to a full spectrum of international legal challenges.

Our areas of expertise include:

International Estates Law

  • Cross-Border Estate Issues
  • Estate Litigation

Privacy Law

  • Federal Privacy Legislation Compliance
  • The Privacy Act
  • PIPEDA Personal Information Protection and Electronic Documents Act
  • Provincial Privacy Legislation Compliance

Cross-Border Real Estate Law

  • Non-Resident Ownership
  • Land Use Planning
  • Title Registration
  • Taxation of Real Property

Immigration Services

  • Business Visitors
  • Intra-company Transfers
  • Investors and Traders
  • Professionals
  • Visitors Visa (Temporary Resident Visa)
  • Work Permits
  • Student Permits
  • Canada Experience Class
  • Federal Skilled Workers
  • Business Class
  • Family Class Sponsorships
  • Humanitarian and Compassionate Cases
  • Convention Refugee Cases
  • Canadian Citizenshi
  • Provincial Nominee Programs (PNP)
  • Immigration Hearings
  • Detention Hearings
  • Inadmissibility
  • Federal Court and Federal Court of Appeal

Debt Recovery Litigation

Over the past 20 years international trade between Canada and the world has sky-rocketed. The bilateral trade relationship between the United States and Canada in particular is by far the largest trade relationship in the World. Further, the growth of the European Union and the emergence of new mega-economies in China, Russia, India and Brazil has vastly broadened the scope of international trade with Canada.

The inevitable result of this explosion in world trade with Canada is an increased incidence of commercial litigation and arbitration between Canadian businesses and foreign entities. Cambridge LLP's Cross-Border Litigation Group has decades of combined experience in dealing with cross-border disputes. We are expert in the results oriented resolution of disputes on behalf of both Canadian and foreign businesses. Whether the dispute takes the form of Canadian litigation, or international arbitration based in Canada, the United States or abroad, Cambridge LLP has the skill and expertise to deliver on its promise of practical, results-driven value.

Enforcement of Foreign Judgments and Arbitral Awards in Canada

The judgment of a foreign court is not directly enforceable in Ontario.  Such a judgment cannot be used to obtain execution against an Ontario judgment debtor.

On the other hand, where certain requirements are met, an Ontario court will recognize a foreign judgment in personam, thereby permitting indirect enforcement.  In essence the Ontario court will construe the foreign judgment as creating a debt between the parties, that debt deriving from an implied promise on the part of the defendant to pay the amount of the judgment.

The requirements that must be met by the party seeking enforcement are several:

  1. The foreign court must have had jurisdiction pursuant to Canadian principles of conflict of laws.  In this regard the Supreme Court of Canada has authorized the use of the “real and substantial connection” test in determining the issue of the jurisdictional sufficiency of the foreign court, although it will be enough if the party attorned or submitted to the foreign court’s jurisdiction.
  2. The judgment itself must have been final and conclusive.
  3. Traditionally the judgment must have been for a fixed sum of money.  However, in recent years this requirement has been relaxed.

Several defences are available to a defendant, including the defence of fraud, the natural justice defence, and the public policy defence.

Procedurally, the party holding the foreign judgment can institute enforcement by commencing an action in Ontario, typically for the amount of the judgment debt and costs.  It is usually then open to the plaintiff to seek summary judgment based on the foreign judgment.

Cambridge LLP is experienced in the enforcement of foreign judgments.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to institute enforcement proceedings, and, where appropriate, how to mount an effective defence.

Debt Recovery Litigation


Maintaining positive cash flow is essential to virtually all businesses, no matter what industry sector. Despite preventative measures and operational excellence, many businesses will require expert legal counsel from time to time on issues arising from difficult accounts receivable issues. At Cambridge LLP we have decades of combined legal experience delivering results to businesses which have rendered services or supplied goods and materials and have trouble getting paid. Many of our cases have involved sophisticated issues of fraud, conversion, the Sale of Goods Act, cross-border issues and contractual counterclaims. We may be retained on the basis of our competitive hourly rates or, in the alternative, we can provide costs quotes for each segment of the litigation process (value billing). Our underlying principle is to provide value to our clients for a reasonable fee.

Cross Border Litigation & Arbitration – Shareholder Disputes

Shareholder disputes can take many forms, including shareholder oppression, share valuation disputes, breaches of unanimous shareholder agreements, and the misappropriation of corporate opportunities

Perhaps the most common of these is shareholder oppression.  Both the Ontario Business Corporations Act (in the case of Ontario corporations) and the Canada Business Corporations Act (in the case of Federal corporations) provide a statutory remedy for shareholders who have been “oppressed” by those who control the corporation in question.

“Oppression” in this context has a fluid meaning.  However, the courts generally agree that a shareholder may invoke the statutory remedy where his or her “reasonable expectations” as a shareholder have been defeated.  For example, shareholders have invoked the remedy where those in control have refused to abide by the governing by-laws or the shareholder agreement, have exploited the corporation for personal gain, or have excluded the shareholder from participation in the corporation.

As a means of responding to shareholder oppression, and in the hands of lawyers who know how to use it, the oppression remedy provides a powerful tool.  For example, it can be accessed by parties other than shareholders, including creditors of the corporation, and even employees.  In addition, although it is most often used by minority shareholders, the remedy can also be used by shareholders with a controlling interest, as a means of controlling divisive shareholders.  Finally, the remedy itself is extremely flexible: it confers on the court an almost unrestricted discretion to fashion a solution appropriate to the circumstances.

Cambridge LLP is experienced in handling shareholder disputes, including shareholder oppression.  The lawyers at Cambridge LLP are therefore well-positioned to tap the power of the oppression remedy on behalf of their clients.

Cross Border Litigation & Arbitration – Partnership Disputes

Although businesses are often constituted as corporations, they can also be constituted as partnerships.  The virtue of the partnership, as a form of business organization, is simplicity: little or no formality is required either to establish a partnership, or to operate one.

But the simplicity of a partnership can also pose problems if the partners themselves fall into a dispute.  For example, the partnership agreement may be rudimentary, it may be ambiguous, it may even be non-existent.  In all of these situations a partner who has been unjustly treated by the other members of the partnership may be forced to turn to the court to clarify his or her relationship with the other partners, and to vindicate his or her rights.

When dealing with partnership disputes the courts have as their starting point Ontario’s Partnership Act.  The latter sets out a test for determining whether a particular business relationship is in fact a partnership.  The Act also defines the relationship between the partners themselves, and that between the partnership and the public at large.  At the same time, the Act is notoriously vague.  In consequence, a great deal of case law has developed around partnerships.  These decisions deal with everything from preliminary issues, such as whether the relationship in question is in fact a partnership, to questions relating to the nature and scope of the duty which partners owe to one another, and to questions surrounding the dissolution of partnerships.  Because of both the volume and complexity of this case law, the successful litigation of a partnership dispute requires not only an intimate knowledge of the Partnership Act, it also requires a  familiarity with the case law.

Cambridge LLP is experienced in handling partnership disputes.  The lawyers at Cambridge LLP have the necessary familiarity with both the relevant legislation and the applicable case law.  They are therefore well-positioned to litigate partnership disputes on behalf of their clients.

Cross Border Litigation & Arbitration – Oppression Remedy Cases

Shareholder disputes can take many forms, including shareholder oppression, share valuation disputes, breaches of unanimous shareholder agreements, and the misappropriation of corporate opportunities

Perhaps the most common of these is shareholder oppression.  Both the Ontario Business Corporations Act (in the case of Ontario corporations) and the Canada Business Corporations Act (in the case of Federal corporations) provide a statutory remedy for shareholders who have been “oppressed” by those who control the corporation in question.

“Oppression” in this context has a fluid meaning.  However, the courts generally agree that a shareholder may invoke the statutory remedy where his or her “reasonable expectations” as a shareholder have been defeated.  For example, shareholders have invoked the remedy where those in control have refused to abide by the governing by-laws or the shareholder agreement, have exploited the corporation for personal gain, or have excluded the shareholder from participation in the corporation.

As a means of responding to shareholder oppression, and in the hands of lawyers who know how to use it, the oppression remedy provides a powerful tool.  For example, it can be accessed by parties other than shareholders, including creditors of the corporation, and even employees.  In addition, although it is most often used by minority shareholders, the remedy can also be used by shareholders with a controlling interest, as a means of controlling divisive shareholders.  Finally, the remedy itself is extremely flexible: it confers on the court an almost unrestricted discretion to fashion a solution appropriate to the circumstances.

Cambridge LLP is experienced in handling shareholder disputes, including shareholder oppression.  The lawyers at Cambridge LLP are therefore well-positioned to tap the power of the oppression remedy on behalf of their clients.

Anton Piller Orders

Although a species of injunction, an Anton Piller order differs in significant ways from other arrows in the lawyer’s quiver of injunctive relief.

When they were first introduced in the 1970s, Anton Piller orders were designed as a mechanism for the preservation of evidence, particularly in patent and copyright cases.  However, by allowing for the seizure of infringing material they have since been used to restrain ongoing wrongdoing.  In other words, in addition to serving the discovery process, the Anton Piller order has morphed into a remedy in its own right.  Moreover, when it is linked to a Mareva injunction, the Anton Piller order, in the words of David Mullan, “clearly” becomes “a pre-trial remedy”.

As with the Mareva injunction, surprise is crucial to the success of an Anton Piller order.  In consequence, it will almost necessarily be made ex parte.  This, combined with the fundamentally intrusive nature of the order, has encouraged the courts to establish high qualifying standards.  A plaintiff will not be granted an Anton Piller order unless it can demonstrate “a strong prima facie case”–and that is only the beginning.  In Celanese Canada Inc. v. Murray Demolition Corp. the Supreme Court of Canada held that there are four conditions for making an Anton Piller order:

  1. “a strong prima facie case”;
  2. the damage arising from the defendant’s misconduct must be “very serious”;
  3. there must be “convincing evidence” that the defendant is in possession of incriminating material;
  4. there must be a “real possibility” that the defendant will destroy that material before discovery.

Cambridge LLP is experienced in handling Anton Piller orders.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare effective applications for Anton Piller orders, and how to defend against such applications.

 

Mareva Injunctions

The globalization of financial services means that a defendant can easily move assets beyond the reach a plaintiff.  An increasingly popular solution to this problem is the Mareva Injunction.  The latter has the effect of restraining the removal of assets beyond the court’s jurisdiction pending trial.  It can be a powerful tool, not only because it ensures that any future damages award will be meaningful, but also because it inevitably disrupts a defendant’s financial activities.

Because of their powerful character, courts treat Mareva Injunctions with caution.  Before such an injunction will be granted the plaintiff must meet the following requirements:

  1. The plaintiff must make full and frank disclosure of all material matters;
  2.  give particulars of the claim, and fairly state the points made against it by the defendant;
  3.  show some grounds for believing there is a risk of the assets being removed or dissipated before judgment is satisfied;
  4. give an undertaking in damages; and
  5. provide grounds for believing the defendant has assets within the court’s jurisdiction.

Perhaps most importantly, a court will subject the merits of a plaintiff’s case to careful scrutiny, and will reject the application unless the plaintiff is able to convince the court that there is a good prospect of success at trial.  Canadian courts generally require a plaintiff too establish a “strong prima facie case.”

Cambridge LLP is experienced in handling Mareva Injunctions.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand how to prepare effective applications for Mareva Injunctions, and how to defend against such applications.

Cross Border Litigation & Arbitration – Letters Rogatory/Letters of Request

Where parties have commenced litigation concerning a Canadian-related issue, but have done so in a foreign jurisdiction, they may wish to obtain evidence in Ontario.  In such a situation it may be necessary to acquire the assistance of an Ontario court.  Such assistance may be procured by means of so-called “letters of request”, formerly known as letters rogatory.

Ontario’s Evidence Act and the Canada Evidence Act set out similar prerequisites for the enforcement of letters of request.  For example, the witness must be within the court’s jurisdiction, the evidence must pertain to a proceeding pending in the foreign court; and the foreign court must be a court of competent jurisdiction.

In addition to the foregoing, Ontario’s courts have developed a set of criteria for determining whether to enforce a letter of request.  These include the following:

  1. the evidence must be relevant;
  2. the evidence must be necessary, and it must be apparent that it will be produced in the foreign proceeding, if admissible;
  3. the evidence must not be otherwise obtainable;
  4. the order sought must not be contrary to public policy;
  5. the documents sought must be specifically identified; and
  6. the order sought must not be overly burdensome.

Cambridge LLP is experienced in dealing with the issue of letters of request.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare and institute proceedings, and how to respond to such proceedings.

Cross Border Litigation & Arbitration – Forum Non-Conveniens Motions

When cross-border litigation is commenced in an Ontario court, two jurisdictional issues may arise.  First, a defendant may question whether the Ontario court can exercise jurisdiction.  Second, a defendant may argue that even if it can exercise jurisdiction, the Ontario court should not do so.  Typically the latter argument is made in the context of a motion to stay the litigation on grounds of forum non conveniens.

Where a defendant invokes the principle of forum non conveniens, he or she bears the burden of convincing the court that it should decline jurisdiction, and thereby, in effect, veto the plaintiff’s choice of forum.  The rationale for this principle is that the court always retains the power to decline jurisdiction where to do so would ensure both fairness in the process and efficiency in the resolution of the dispute.

In this context the defendant’s burden is not an easy one.  In its decision in Van Breda v. Village Resorts Ltd. the Supreme Court of Canada held that to succeed on a stay motion the defendant must do more than demonstrate that there are other jurisdictions which would be as appropriate as Ontario; the defendant must demonstrate that the alternate jurisdiction is “clearly more appropriate”.  In the words of the Court “It is not a matter of flipping a coin”: the Ontario court must be convinced that a forum exists “that is in a better position to dispose fairly and efficiently of the litigation”.

In making this determination the Ontario court will consider a variety of contextual factors, including the location of the parties and their witnesses, the cost of transferring the case to the alternate jurisdiction, the impact of a transfer on the proceeding, the problems surrounding enforcement of any judgment, and the strengths of the connection of the two parties to the various jurisdictions.

Cambridge LLP is experienced in dealing with the issue of forum non conveniens.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare and institute proceedings, and how to respond to such proceedings.

Jurisdictional Disputes

When cross-border litigation is commenced in an Ontario court, two jurisdictional issues may arise.  First, a defendant may question whether the Ontario court can exercise jurisdiction.  Second, a defendant may argue that even if it can exercise jurisdiction, the Ontario court should not do so.  Traditionally the first of these issues has been referred to as jurisdiction simpliciter, and it is typically invoked by a defendant in the context of a motion to dismiss for want of jurisdiction.

Some Canadian provinces have adopted legislative solutions to the problem of jurisdiction simpliciter.  For example, British Columbia, Saskatchewan, and Nova Scotia have all enacted statutes codifying the connecting factors which allow a court to determine whether it has jurisdiction over a particular case.  Ontario has adopted no such legislation.  Instead the courts have fashioned a solution.  For years the leading case on point was Muscutt v. Courcelles.  More recently, Ontario’s courts, and ultimately the Supreme Court of Canada, have revisited the issue in Van Breda v. Village Resorts Ltd.

In Van Breda the Supreme Court of Canada held that where any one of several factors connecting the case to a particular forum (the so-called “connecting factors”) can be found to exist, the court may assume jurisdiction.  However, this presumption of jurisdiction may be rebutted.  The Court noted that the list of these “connecting factors”, is not closed; however, at the very least it would include factors such as the location of the defendant’s residence, the location of the defendant’s place of business, and the location of the alleged wrong.  Turning to the possibility of rebutting the presumption of jurisdiction, the Court held that the party challenging that presumption bears the burden of establishing facts that demonstrate that the connecting factor in issue does not, in fact, point to any real relationship between the subject matter of the litigation and the jurisdiction–or it points “only to a weak relationship between them.”

Cambridge LLP is experienced in dealing with the issue of jurisdiction simpliciter.  The lawyers at Cambridge LLP are familiar with the applicable law.  They understand how to challenge an action on grounds of want of jurisdiction, and how to respond to such a challenge.

 

Anti-Suit Injunctions

Where a party intends to initiate litigation in a foreign jurisdiction relative to an issue over which litigation has already begun in an Ontario court, parties to the Ontario proceeding can disrupt the foreign suit by bringing a motion in Ontario for a so-called “anti-suit injunction”.  It is important to note, however, that because injunctions typically operate in personam, the anti-suit injunction does not purport to bind the foreign court–obviously such an endeavour would be pointless.  Instead the effect of the anti-suit injunction is to restrain the plaintiff in the foreign suit from proceeding.

Although the anti-suit injunction does not purport to restrain a foreign court, as a practical matter it has that effect.  As such, Ontario courts have adopted a cautious approach, and will only grant such an injunction where certain conditions are met.

Specifically, the principle of curial comity requires that the Ontario court should not act until the foreign suit has been commenced, and the applicant for the injunction has, before the foreign court, sought and been refused a stay.  Further, the Ontario court should entertain the possibility of an injunction only where, in the words of the Supreme Court of Canada in its decision in Amchem Products Inc. v. British Columbia, “it is alleged to be the most appropriate forum and is potentially an appropriate forum”.  If the foreign court refused a stay on grounds of forum non conveniens, and had reasonable grounds for doing so, the Ontario should defer to the foreign court.  On the other hand, if it appears that the foreign court did not act in accordance with the principles of forum conveniens, the Ontario court must consider whether the anti-suit injunction should be granted so as to prevent “injustice” to the applicant.  Finally, the Ontario court should decline to grant the injunction if to do so would deprive the foreign plaintiff of advantages of which, in the words of the S.C.C., “it would be unjust to deprive him”.

Cambridge LLP is experienced in dealing with anti-suit injunctions.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare and institute proceedings, and how to respond to such proceedings.

Franchise Disputes

Thirty years ago franchise law barely existed in Canada.  Today it constitutes a distinct area of law, albeit one that straddles contract law, property law and the law of intellectual property.

The basis of the franchise relationship is the franchise agreement.  The latter is a specialized contract which typically defines the rights and obligations of the parties, and sets out the operating guidelines of the franchise system.  In addition to the franchise agreement, the franchise relationship is shaped by specialized legislation.  In Ontario the applicable statute is the Arthur Wishart Act.  The latter is noteworthy because it imposes disclosure obligations, as well as a generalized duty of “fair dealing”.

Within the framework provided by the applicable franchise agreement and the franchise legislation, a number of issues have issues have emerged as ongoing sources of dispute between franchisors and franchisees.  One recurrent issue has been the precise nature of the duty which franchisors owe to franchisees.  This was explored in detail in Shelanu Inc. v. Print Three Franchising Corp.  Another persistent issue has been that of franchise renewal.  In TDL Group Ltd. v. 1060284 the court considered whether the franchisor owed the franchisee a good-faith obligation to renew when the existing franchise expires.  Yet another source of dispute has been the issue of territorial encroachment.  In Simpson v. First Choice Haircutters Ltd. the court considered the precise scope of the territorial protection granted to franchisees.

Cambridge LLP is experienced in handling franchise disputes.  The lawyers at Cambridge LLP are intimately familiar with the law necessary to the successful pursuit of franchise litigation, and are therefore well-positioned to prepare and manage the claims and defences of both franchisors and franchisees.

Franchises and licensing

Parties to a cross-border franchise agreement often adopt a proactive approach to jurisdictional issues by incorporating “choice of law” and “choice of forum” clauses into their agreement.  Typically these clauses are intended to prevent disagreement over which party’s law prevails, and over where any trial (or arbitration) might occur, by incorporating the choices into the agreement itself.

Over the years these types of clauses have generated a great deal of litigation.  However, where one of the parties is located in Ontario, these types of clauses now face a more serious problem.  Since 2000, the franchise relationship in Ontario has been governed by the Arthur Wishart Act.  Section 9 of the Act provides, in effect, that the parties cannot opt out of the rights set out in the Act itself:

The rights conferred by this Act are in addition to and do not derogate from any other right or remedy a franchisee or franchisor may have at law

In addition, section 10 of the Act precludes parties from attempting to provide, in their franchise agreement, that disputes must be litigated outside Ontario:

Any provision in a franchise agreement purporting to restrict the application of the law of Ontario or to restrict jurisdiction or venue to a forum outside Ontario is void with respect to a claim otherwise enforceable under this Act in Ontario

In other words, not only are parties to a franchise agreement precluded from opting out of the rights provided by the Act, they are also precluded from litigating a dispute in a jurisdiction other than Ontario.

But while the Act is fairly clear, the question will always arise as to whether, in any particular case, it actually applies.  For example in the recent case of Di Stefano v. Energy Automated Systems Inc. the court devoted a substantial amount of time to the question of whether, despite the Act,  the choice of forum provision in the franchise agreement actually applied.

Cambridge LLP is experienced in dealing with cross-border franchise disputes.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare and institute proceedings, and how to respond to such proceedings.

Franchises and licensing

Parties to a cross-border franchise agreement often adopt a proactive approach to jurisdictional issues by incorporating “choice of law” and “choice of forum” clauses into their agreement.  Typically these clauses are intended to prevent disagreement over which party’s law prevails, and over where any trial (or arbitration) might occur, by incorporating the choices into the agreement itself.

Over the years these types of clauses have generated a great deal of litigation.  However, where one of the parties is located in Ontario, these types of clauses now face a more serious problem.  Since 2000, the franchise relationship in Ontario has been governed by the Arthur Wishart Act.  Section 9 of the Act provides, in effect, that the parties cannot opt out of the rights set out in the Act itself:

The rights conferred by this Act are in addition to and do not derogate from any other right or remedy a franchisee or franchisor may have at law

In addition, section 10 of the Act precludes parties from attempting to provide, in their franchise agreement, that disputes must be litigated outside Ontario:

Any provision in a franchise agreement purporting to restrict the application of the law of Ontario or to restrict jurisdiction or venue to a forum outside Ontario is void with respect to a claim otherwise enforceable under this Act in Ontario

In other words, not only are parties to a franchise agreement precluded from opting out of the rights provided by the Act, they are also precluded from litigating a dispute in a jurisdiction other than Ontario.

But while the Act is fairly clear, the question will always arise as to whether, in any particular case, it actually applies.  For example in the recent case of Di Stefano v. Energy Automated Systems Inc. the court devoted a substantial amount of time to the question of whether, despite the Act,  the choice of forum provision in the franchise agreement actually applied.

Cambridge LLP is experienced in dealing with cross-border franchise disputes.  The lawyers at Cambridge LLP are familiar with the applicable law, and they understand both how to prepare and institute proceedings, and how to respond to such proceedings.

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