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TMR Energy Limited v. State Property Fund of Ukraine et al.

In Admiralty Practice, Judgments and Enforcement of Judgments on (Updated )

This case concerned the validity of the seizure of an Anatov aircraft owned by the State of Ukraine which had landed in Newfoundland. The Plaintiff had obtained an ex parte order recognizing and enforcing a Swedish arbitration award in its favour against “State Property Fund of Ukraine”. In its Federal Court pleadings the Plaintiff described the Defendant as “State Property Fund, an Organ of the State of Ukraine”. The State of Ukraine had initially been served in the Swedish arbitration proceedings but the arbitration had been discontinued against it. In a lengthy judgment at first instance the Prothonotary considered whether an enforcing court could determine the identity of the judgment debtor (the respondent) under the arbitration award. She also considered issues of state immunity and the jurisdiction of the Federal Court. She held that the enforcing court could determine the identity of the judgment debtor and after hearing expert evidence with respect to Ukrainian law determined that the State of Ukraine was the judgment debtor. Following this Order there were various motions and counter-motions all of which found their way to the Federal Court of Appeal. (Companion enforcement proceedings were also brought in the Newfoundland courts which were ultimately rejected because the requirements of the State Immunity Act were not followed and for failure on the part of the Plaintiff to provide full and fair disclosure.) At the Federal Court of Appeal, the enforcement proceedings were declared null and void on the primary basis that the Prothonotary lacked jurisdiction to register and enforce an award over $50,000. In its judgment, the Federal Court of Appeal also adopted the statement from the English High Court in Norsk Hydro ASA v. State Property Fund of Ukraine [2002] EWHC 2120 “that the enforcing court is neither entitled nor bound to go behind the award in question, explore the reasoning of the arbitration tribunal or second-guess its intentions”. (Note: See also Pan Liberty Navigation Co. Ltd. v World Link (HK) Resources Ltd., 2005 BCCA 206, summarized above, where the British Columbia Court of Appeal ordered a stay in a similar proceeding and also indicated that the approach taken by the English High Court in Norsk Hydro ASA v. State Property Fund of Ukraine [2002] EWHC 2120 was the correct approach.)