The Supreme Court of Canada’s May decision in Yugraneft v. Rexx Management Corporation leaves many foreign arbitration awards, including those obtained by U.S. companies against Canadian businesses, with a relatively short shelf life. The court affirmed Alberta’s two-year limit for collecting arbitration awards, a time frame that could make it difficult to enforce awards against debtors who have spread their assets over multiple jurisdictions, making the assets difficult to find and mandating enforcement in a host of jurisdictions.
“For a country that holds itself out as arbitration friendly, the Supreme Court of Canada’s decision in Yugraneft is a bit of an embarrassment–not as a matter of judicial policy but as a matter of statutory drafting,” says Joel Richler, a litigation partner at Blake, Cassels & Graydon. “Still, the decision is a slap in the face to the international arbitration bar and inconsistent with Canadian attempts to promote the country as an arbitration venue.”
