Case information

Commercial law — Corporations — Arbitration — Are the principles for piercing the corporate veil in article 317 C.C.Q. a complete code for a creditor of a foreign state to enforce its debt against the assets of a foreign state-owned corporation in Quebec — What are the principles governing the determination of whether a foreign state entity possesses a separate juridical personality from the foreign state for the purposes of enforcement of a debt against the foreign state — Civil Code of Québec, art. 317.<br>

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The applicants are past or present creditors of the Republic of India pursuant to two foreign arbitral awards. Pending the homolgation of those awards they successfully applied to a Quebec court for a seizure before judgment by garnishment of the funds belonging to both Air India Ltd. and the Airport Authority of India (AAI) held by the IATA. They did so on the basis that Air India and AAI are the alter egos of India and that their assets could satisfy the execution of arbitration awards made in their favour against India. The Superior Court of Quebec granted an application by AAI to quash the seizure judgment relating to it but dismissed in part the application by Air India to quash and stay the seizure before judgment by garnishment. The court reduced the seizure to 50% of the funds of Air India held by the IATA, and authorized the release of the other 50% of the funds to Air India. The Court of Appeal of Quebec allowed Air India’s appeal, reversed the judgment for seizure of funds held by IATA, and granted Air India’s motion to quash the seizure judgment. The court found that the facts alleged were not sufficient to establish one of the situations which justify piercing the corporate veil under article 317 of the C.C.Q.