SCC Rules on Limitation Periods in International Commercial Arbitration

Slawyers have discussed the Yugraneft case on a number of occasions.

The SCC has now decided the case. It unanimously upheld the decision of the Alberta Court of Appeal, which in turn upheld the trial court, in all cases finding that the winner of the Russian arbitration was out of time to enforce the award in Alberta.

The SCC had some useful things to say about the nature of international obligations and how they apply in such matters. It held that limitation periods are a matter of procedure not governed by the New York Convention, except that in order to comply with the Convention, a member state may not give less favourable treatment to a Convention award than to a domestic one. The favourability test is applied province by province, however. Thus the applicable limitation period may be two years in Alberta, as held by the Alberta courts, but ten years in British Columbia.

The Court held that the limitation period runs from the time the award holder could reasonably have known that the other party had assets in the jurisdiction in which enforcement is sought. Since the losing party in this arbitration was an Alberta company, the Russian winning party should have figured out where its assets were immediately. (The Convention gives three months to the losing party to apply to set the award aside. The limitation period does not start running until this period expires.)

Is that a satisfactory result? Does it provide certainty where none was before?

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