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2022 QCCA 1439

Air India Ltd. c. CC/Devas (Mauritius) Ltd.

COURT OF APPEAL

CANADA
PROVINCE OF QUEBEC
REGISTRY OF MONTREAL

No.: 500-09-029888-229
(500-11-060766-223)

MINUTES OF HEARING

DATE: October 20, 2022

THE HONOURABLE STEPHEN W. HAMILTON, J.A.

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HEARING

Ariane Simard-Trudel, Clerk at the hearing

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JUDGMENT

[1] On September 20, 2022, the Court quashed the seizure before judgment of a sum of US $17,734,542 held by the Mise en Cause International Air Transport Association for the benefit of the Appellant Air India.

[2] Announcing its intention to seek leave to appeal to the Supreme Court of Canada, the Respondents ask me to suspend the provisional execution of the Court's judgment.

[3] The Appellant contests the motion. Subsidiarity, it asks me to make any suspension order conditional on the Respondents providing security in the amount of $ 1,500,000.

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[4] The applicable statutory provisions giving me the power to suspend execution of the judgment and to order security are Article 390 of the Code of Civil Procedure and Section 65.1 of the Supreme Court of Canada Act:

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[5] The parties agree that the test for the suspension of the execution of the judgment is that set out in Metropolitan Stores¹, as summarized in RJR-Macdonald²:

Metropolitan Stores adopted a three-stage test for courts to apply when considering an application for either a stay or an interlocutory injunction. First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. It may be helpful to consider each aspect of the test and then apply it to the facts presented in these cases.

[6] The parties also agree that the “serious issue to be tried” test is not a high one. The Respondents argue that their position throughout these proceedings has been that the Appellant does not have a legal personality separate from the Republic of India and they cite in support of their position the Federal Court judgment in Roxford Enterprises³

¹ Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R. 110. ↩
² RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, p. 334. ↩
³ Roxford Entreprises S.A. c. Cuba, [2003] 4 FC 1182. ↩

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and the Alberta Court of Queen's Bench judgment in Collavino⁴ as well as a number of international authorities. There are no Quebec judgments and no Supreme Court judgments on the issue. They argue that the Court misstated their position in paragraph 34 of its judgment and limited its analysis to the issue of lifting the corporate veil under Article 317 of the Civil Code, when they were arguing that there was no corporate veil.

[7] In my view, the argument is sufficiently serious to meet the first test. I adopt the conclusion of my colleague Justice Mainville in Pereira⁵ :

[18] Il n'appartient pas au soussigné de se prononcer sur le bien-fondé de la demande de permission d'appel que formuleront les demandeurs auprès de la Cour suprême du Canada. Il suffit de vérifier si les demandeurs ont l'intention de soulever des moyens qui ne paraissent ni frivoles ni vexatoires et qu'ils répondent ainsi au critère de la question sérieuse. C'est manifestement le cas ici.

[8] As for the second test, it is manifest that the Respondents will suffer irreparable harm if the suspension is refused. The seizure will be lifted and the sums held by IATA on behalf of the Appellant will be released to the Appellant and will in the ordinary course be taken beyond the jurisdiction of the Court. Because the Republic of India no longer owns the shares of the Appellant, it will not be possible for the Respondents to seize anew. With no seizure, the appeal to the Supreme Court will be moot. The second test is met.

[9] The principal debate was on the third test. The Respondents argue that their irreparable harm in losing the possibility of executing their arbitral award against the sum seized greatly outweighs the inconvenience to the Appellant of having the seizure continue until the Supreme Court decides. The Appellant argues, quite rightly in my view, that the analysis is not limited to the comparison of the potential harms or inconveniences but must also, in principle, factor in the likelihood of the harm or inconvenience occurring. However, this can never be a mathematical exercise. It might be possible, as in this case, to calculate the potential harms or inconveniences – the Respondents are at risk of losing US $17,734,542 and the Appellant, while not losing that amount, estimates that it is losing US $3,401.15 per day in interest by being deprived of the amount. It is not possible to state with any degree of confidence the percentage likelihood of the Supreme Court granting leave to appeal or overturning the Court's judgment in this matter. In my view, however, that possibility is not so remote that I should ignore the enormous difference in the potential harms or inconveniences. The third test is therefore met and the suspension should be granted.

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⁴ Collavino Incorporated v. Yemen (Tihama Development Authority), 2007 ABQB 212. ↩
⁵ Pereira c. Commission des transports du Québec, 2016 QCCA 765. ↩

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[10] The request for security is based on two elements, court costs and lost interest on the sums seized.

[11] The Appellant estimates the costs of an appeal on the merits at $28,124.30. However, in my view, security should be limited to the court costs that may be incurred in relation to the motion for leave to appeal to the Supreme Court. That amount seems to represent only $1,047.25, based on the Appellant's estimate. If leave is granted, the Appellant can ask the Supreme Court for security for the court costs of the appeal.

[12] I am informed that counsel for the Respondents currently hold $85,000 in trust as security for the court costs incurred to date in the Superior Court and the Court of Appeal. That amount appears adequate to also cover the court costs that may be incurred in relation to the motion for leave to appeal to the Supreme Court. If it is not adequate, I expect counsel to make the necessary arrangements to increase it.

[13] As for the potential lost interest, the Appellant is not currently entitled to any compensation for those amounts. No provision in the Code of Civil Procedure gives a party a right to be compensated for the inconvenience of a quashed seizure. No order for compensation was sought from the Superior Court or this Court or was issued by either court. In my view, and notwithstanding the broad discretion that I have under Article 390 of the Code of Civil Procedure and Section 65.1 of the Supreme Court of Canada Act, it would not be appropriate to order any security for the potential lost interest.

FOR THESE REASONS, THE UNDERSIGNED:

[14] GRANTS the Respondents' Application to Suspend the Provisional Execution of a Judgment of the Court of Appeal;

[15] SUSPENDS the execution of the judgment rendered by the Court on September 20, 2022 in file number 500-11-060766-223, until the first of (a) the expiration of the delay for filing a motion for leave to appeal to the Supreme Court of Canada, if no motion is filed, (b) the judgment of the Supreme Court of Canada refusing leave to appeal, (c) the judgment of the Supreme Court of Canada on the appeal, or (d) the discontinuance of the appeal;

[16] DISMISSES the Appellant's request for security;

[17] THE WHOLE, without legal costs.

STEPHEN W. HAMILTON, J.A.