The issue arises out of an international arbitration award that Sunlodges obtained against the United Republic of Tanzania pursuant to a Bilateral Investment Treaty between Tanzania and Italy, Sunlodges place of domicile.
Tanzania resists the injunction and submits that it should be set aside for the following reasons:
a. The aircraft is not the property of Tanzania
b. The applicant failed to make full and fair disclosure before Conway J.
c. Sovereign immunity precludes the injunction
d. The applicant has failed to meet the test for a Mareva injunction.
e. Tanzania has not implemented the New York Convention into domestic law.
Subject to subsection (3), no relief by way of an injunction, specific performance or the recovery of land or other property may be granted against a foreign state unless the state consents in writing to that relief and, where the state so consents, the relief granted shall not be greater than that consented to by the state.
Tanzania submits it is never consented to injunctive relief. It points to article 8 of the Bilateral Investment Treaty which provides:
"At the request of either party, the arbitral tribunal may take any interim measures it deems necessary in respect of the subject-matter of the dispute, including measures for the conservation of the goods forming the subject-matter in dispute, such as ordering their deposit with a third person or the sale of perishable goods."
Tanzania submits that the provision limits interim measures to the subject matter of the dispute. All agree that the aircraft in Ontario is not the subject matter of the dispute. I do not, however, think that is the end of the analysis. Article 8 of the Bilateral Investment Treaty also calls for arbitration of any disputes under UNCITRAL rules. That is what the parties did here. Article 32.1 of the UNCITRAL provides:
1. In addition to making a final award, the arbitral tribunal shall be entitled to make interim, interlocutory, or partial awards.
…the judge must not allow himself to become the prisoner of a formula. The fundamental question in each case is whether the granting of an injunction is just and equitable in all the circumstances of the case. These observations set out above were noted by Weiler J.A. in relation to her finding that in order to obtain a Mareva injunction it is unnecessary to incorporate a requirement that a dissipation or transfer of assets was pursued for an improper purpose.
Recognition and implementation of the arbitration decision in the territory of the Contracting Parties shall be governed by their respective national legislation, in compliance with the relevant international conventions they are parties to.
First, article 8.4 of the treaty requires compliance with national legislation in order to enforce the arbitral award in either Italy or Tanzania. It does not require compliance with Tanzanian law in order to enforce the award in other countries.
Whether Ontario will recognize and enforce an international arbitration award turns on Ontario law, not Tanzanian law unless, Tanzanian law is factor that is somehow incorporated into Ontario law by virtue of the manner in which Ontario courts apply the New York Convention, the International Commercial Arbitration Act or the case law applicable to the recognition and enforcement of arbitration awards.
Tanzania submits that the award is not enforceable in Ontario pursuant to the International Commercial Arbitration Act which incorporates into Ontario law the New York Convention because Tanzania has not yet passed legislation that incorporates the New York Convention into the domestic law of Tanzania. This is immaterial. Tanzania's failure to implement the New Your Convention into its domestic law would, at most, mean that enforcement of an international arbitral award in Tanzania is not governed by the New York Convention. Tanzania's failure to implement the New York Convention has no bearing on Ontario's ability to enforce international arbitration awards pursuant to the International Arbitration Act. Tanzania has, however, signed the New York Convention and can therefore be bound by its principles when a party to an arbitration with Tanzania seeks to enforce that arbitral award outside of Tanzania.
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