Sunridge Gold Corp. v. Delizia Limited

Sunridge Gold Corp. v. Delizia Limited

Appeal allowed; the provisional and final garnishment orders against Sunridge are set aside because (1) after AMSCo incorporation there were no debts owing or accruing by Sunridge to Eritrea/ENAMCo that are garnishable—the AMSCo shares were issued by AMSCo post‑incorporation and cannot be treated as Sunridge debts absent piercing the corporate veil, which is not justified on these facts (no fraud, sham, agency or statutory basis); (2) exploration licence fees are sovereign/regulatory in nature and not commercial activity under the SIA and thus immune from attachment; and (3) independently, the Recognition Order, POG and FOG are nullities because Eritrea was not served as required by SIA...

Citation
2016 FC 392
Parties
Appellant/garnishee: SUNRIDGE GOLD CORP.; Respondent/garnishor: DELIZIA LIMITED; Respondent: STATE OF ERITREA
Court
Federal Court
Jurisdiction
Canada
Judgment Date
8 April 2016
Procedural Posture
Appeal of Garnishment and Enforcement of Foreign Arbitral Award / Motion Appeal From Prothonotary Order (final Order of Garnishment)
Outcome
Appeal allowed; provisional order of garnishment dated July 31, 2013 and final order of garnishment dated January 9, 2015 set aside; appeal relating to production orders dismissed
Legal Topics
State Immunity Act Service Requirements, Commercial Activity Exception, Piercing the Corporate Veil, Recognition and Enforcement of Foreign Arbitral Awards, Production Orders and Scope of Cross Examination
Source Language
English
State Immunity Garnishment/enforcement Corporate Law Private International Law Arbitration Enforcement State Immunity Act Service Requirements Commercial Activity Exception Piercing the Corporate Veil +2 more

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Parties

SUNRIDGE GOLD CORP.

Appellant/garnishee

DELIZIA LIMITED

Respondent/garnishor

STATE OF ERITREA

Respondent

Procedural Posture

Appeal of Garnishment and Enforcement of Foreign Arbitral Award / Motion Appeal From Prothonotary Order (final Order of Garnishment)

Legal Issues

  1. 1 Standard of review for prothonotary orders
  2. 2 Whether final order of garnishment should issue against Sunridge
  3. 3 Whether AMSCo shares issued to ENAMCo are attachable debts of Sunridge

Ratio Decidendi

Appeal allowed; the provisional and final garnishment orders against Sunridge are set aside because (1) after AMSCo incorporation there were no debts owing or accruing by Sunridge to Eritrea/ENAMCo that are garnishable—the AMSCo shares were issued by AMSCo post‑incorporation and cannot be treated as Sunridge debts absent piercing the corporate veil, which is not justified on these facts (no fraud, sham, agency or statutory basis); (2) exploration licence fees are sovereign/regulatory in nature and not commercial activity under the SIA and thus immune from attachment; and (3) independently, the Recognition Order, POG and FOG are nullities because Eritrea was not served as required by SIA...

Court Disposition

Appeal allowed; provisional order of garnishment dated July 31, 2013 and final order of garnishment dated January 9, 2015 set aside; appeal relating to production orders dismissed

Orders

  • Set aside provisional order of garnishment dated July 31, 2013
  • Set aside final order of garnishment dated January 9, 2015