Case report (free download)
Case Report by Marina Petri, Editor Ignacio Torterola
In the Judgment rendered on 11 July 2016, the Superior Court of Justice of Ontario, Canada, ruled upon the recognition and enforcement of arbitral awards against the Kyrgyz Republic. In particular, the decision deals with the issue which is common to four applications in separate proceedings: the definition of the "ownership interest" of the Kyrgyz Republic in the shares of a Canadian company, which are registered in the name of a subsidiary company, wholly owned by the Kyrgyz Republic. The existence of this "ownership interest" would imply that the shares are subject to seizure by way of execution, pursuant to the 1990 Execution Act.
The applications were dismissed on the basis of a structured interpretation of the legislative materials and the separate agreements defining the relationship between the Kyrgyz Republic and its wholly-owned subsidiary, which qualify as separate legal entities, according to Kyrgyz law. Moreover, the Applicants failed to prove that the Republic has any "ownership interest" in the shares, on the basis of either further agreements between the parties, or trust principles. The mentioned shares are thus not subject to seizure and sale under the Execution Act, since the Republic does not have any "equitable or other right, property, interest or equity of redemption" on them.
Recognition and Enforcement of Award, Ownership Interest, Seizure, Execution, Shares in Wholly-Owned Subsidiary.
Case report provided by International Arbitration Case Law (IACL)