Oakwell Engineering Ltd v Enernorth Industries Inc

Oakwell Engineering Ltd v Enernorth Industries Inc
Oakwell Engineering Ltd v Enernorth Industries Inc
Court	Court of Appeal for Ontario
Full case name	Oakwell Engineering Limited v Enernorth Industries Inc. (formerly known as Energy Power Systems Limited, Engineering Power Systems Group Inc. and Engineering Power Systems Limited respectively)
Decided	June 9, 2006
Citation(s)	Docket No. C43898, 2006 CanLII 19327
Case history
Appealed from	Oakwell Engineering Limited v. Enernorth Industries Inc. 2005 CanLII 27149, Court File Nos. 04-CV-271121CM3 & 04-CV-274860CM2, (2005) 76 O.R. (3d) 528, Superior Ct. (Ontario).
Subsequent action(s)	Enernorth Industries Inc. v. Oakwell Engineering Limited 2007 CanLII 1145, S.C. (Canada).
Court membership
Judges sitting	Laskin, MacFarland and LaForme JJ.A.
Case opinions
Decision by	MacFarland J.A.

Last updated September 28, 2019

Oakwell Engineering Ltd v Enernorth Industries Inc was an appeal to the Court of Appeal for Ontario by Enernorth Industries Inc. (Enernorth), a Canadian company, from a judgment of the Ontario Superior Court of Justice granting an application brought by Oakwell Engineering Limited (Oakwell), a Singaporean company, for an order recognizing and enforcing in Ontario a judgment granted against Enernorth by the High Court of Singapore on October 16, 2003 and affirmed by the Court of Appeal of Singapore on April 27, 2004.

The Court of Appeal for Ontario is an appellate court in Ontario that is based at historic Osgoode Hall in downtown Toronto.

The Superior Court of Justice is a superior court in Ontario. The Court sits in 52 locations across the province, including 17 Family Court locations, and consists of over 300 federally appointed judges.

Court of Appeal of Singapore Supreme appellate court of Singapore

The Court of Appeal of the Republic of Singapore is the nation's highest court and its court of final appeal. It is the upper division of the Supreme Court of Singapore, the lower being the High Court. The Court of Appeal consists of the Chief Justice of Singapore, who is the President of the Court, and the Judges of Appeal. The Chief Justice may ask judges of the High Court to sit as members of the Court of Appeal to hear particular cases. The seat of the Court of Appeal is the Supreme Court Building.

The case is notable because Enernorth claimed that the Singapore judgment should not be recognized in Canada because judicial standards in Singapore were not the same as those in Canada. Among other things, Enernorth alleged that links between the judiciary, business and the executive arm in Singapore suggested a real risk of bias.^[1]

Judicial independence in Singapore Judicial independence in the nation

Judicial independence is protected by Singapore's Constitution, statutes such as the State Courts Act and Supreme Court of Judicature Act, and the common law. Independence of the judiciary is the principle that the judiciary should be separated from legislative and executive power, and shielded from inappropriate pressure from these branches of government, and from private or partisan interests. It is crucial as it serves as a foundation for the rule of law and democracy.

According to analyst Michael Backman, if Enernorth's appeal to the Ontario Court of Appeal had succeeded, this might have had the effect of dissuading companies from using Singaporean law for arbitration and trial, and calling into question the fairness of the Singaporean legal system.^[2] However, Enernorth lost its appeal before the Court of Appeal, and was refused leave to appeal to the Supreme Court of Canada.

Michael Backman is an Australian-born writer who now resides in London. Much of his writing relates to Asia's economies, business, culture and politics.

The Supreme Court of Canada is the highest court of Canada, the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts. Its decisions are the ultimate expression and application of Canadian law and binding upon all lower courts of Canada, except to the extent that they are overridden or otherwise made ineffective by an Act of Parliament or the Act of a provincial legislative assembly pursuant to section 33 of the Canadian Charter of Rights and Freedoms.

History of case

Oakwell and Enernorth formed a joint venture in June 1997 to build two barge-mounted power stations in Andhra Pradesh, India. However, the licenses necessary for the project were never obtained, and a new Indian government requirement to use natural gas instead of furnace oil made the project infeasible.

Andhra Pradesh is one of the 29 states of India. Situated in the south-east of the country, it is the seventh-largest state in India, covering an area of 160,205 km² (61,855 sq mi). As per the 2011 census, it is the tenth-most populous state, with 49,386,799 inhabitants. The largest city in Andhra Pradesh is Visakhapatnam. Telugu, one of the classical languages of India, is the major and official language of Andhra Pradesh.

Oakwell commenced arbitration against Enernorth for failure to release the funds for the project. The two sides signed a Settlement Agreement in December 1998, agreeing that the earlier contract was "terminated" and "discharged", and that Enernorth was "released" from any obligations under the contract. Oakwell sold its stake in the venture to Enernorth. Enernorth paid an initial sum to Oakwell and agreed to pay the remainder within 30 days of "financial closure".

Arbitration Mediated dispute resolution method

Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the courts. The dispute will be decided by one or more persons, which renders the "arbitration award". An arbitration award is legally binding on both sides and enforceable in the courts.

However, Enernorth later posited that as the Indian government had not granted the licenses necessary, the project had not achieved "financial closure", and according to Enernorth's lawyers, the Agreement "did not contain any express obligation on Enernorth to procure financial closure".^[3] Enernorth sold its remaining stake to an Indian company in 2000.^[2]

Court cases in Singapore

In 2002, Oakwell sued Enernorth in the High Court of Singapore to obtain the further payment. The court found in Oakwell's favor, with Justice Lai Kew Chai ruling that Enernorth had an "implied" obligation to obtain financial closure within six months, and awarding Oakwell the sum of S$4.39 million. The case was appealed to Singapore's Court of Appeal, but Chief Justice Yong Pung How upheld Justice Lai's ruling.

Court cases in Canada

Superior Court of Ontario

As Enernorth had no seizable assets in Singapore, Oakwell brought the case against Enernorth to Canada. Justice Gerald Day of the Ontario Superior Court of Justice allowed Oakwell's claim to be enforced.^[4]

Ontario Court of Appeal

However, Enernorth appealed to the Ontario Court of Appeal on the grounds that the lower court erred. According to Enernorth, the Superior Court had considered only whether there was bias against Enernorth in this particular case, but enforcing the judgment would require that Oakwell prove to the court that the standard of justice in Singapore in general must "meet Canadian constitutional standards".^[5]

As evidence, Enernorth obtained the testimony of expert witnesses, including Ross Worthington, Adjunct Professor of Governance at the National Key Centre for Ethics, Law, Justice and Governance at Griffith University, Australia; and Francis Seow, former Solicitor-General of Singapore. In his affidavit, Worthington stated that "all aspects of the governance of Singapore, including the judiciary, are carefully manipulated and ultimately controlled by a core executive of individuals who use their powers to maintain their own power and further their own political, economic, social and familial interests."^[6] Seow's affidavit claimed that the court proceedings in Singapore had not been heard by an independent judiciary due to the "consuming and controlling power of Singapore's ruling party over all facets of life in Singapore", and that defamation suits had been used by the Government of Singapore to suppress opposition politicians and non-compliant media, citing the example of the prosecution of J.B. Jeyaretnam.^[7]

The Singapore Ministry of Law rejected the allegations of bias on the part of the Singapore judiciary as "spurious".^[1]

Enernorth's appeal was dismissed by the Court of Appeal for Ontario in a decision dated June 9, 2006.^[5] The judgment supported Justice Day's findings that the evidence of Enernorth's expert witnesses was "either unreliable ... or too general to prove that there was not a fair trial in this case". It also supported the findings that "there was a lack of evidence of corruption or bias [within Singapore legal system] in private commercial cases and no cogent evidence of bias in this specific case".^[8]

Canadian Supreme Court

Enernorth then applied to the Supreme Court of Canada for leave to appeal against the decision of the Ontario Court of Appeal. Before the Supreme Court, Enernorth argued that to recognize judgments such as those from Singapore meant that Canadian judges were "mere functionaries or sheriffs for foreign legal systems, no matter how corrupt they are". Oakwell responded that it was for Canadian courts to decide on this, based on the criteria laid out by the courts. Among other things, it pointed out that Enernorth had neither alleged bias nor contested the Singapore courts' jurisdiction when the case was heard in Singapore. When the case was moved to Canada, two of Enernorth's expert witnesses – including Francis Seow – had admitted they were unaware of any commercial case from Singapore that had been attacked as unfair or biased. On January 18, 2007, Chief Justice Beverley McLachlin and Justices Louise Charron and Marshall Rothstein, sitting in the Supreme Court, dismissed Enernorth's leave application without providing detailed reasons and ordered it to bear the costs of the application.^[1]^[9]

Notes

1 2 3 K. C. Vijayan (January 27, 2007), "Payout fight over 'biased judiciary' rejected: Firm's final bid to Canada's highest court fails, so S'pore court judgment stands", The Straits Times .
1 2 Donald Greenlees (May 9, 2006), "Courts in Singapore come under scrutiny", International Herald Tribune , archived from the original on May 9, 2006.
↑ Alex Waipang Au (May 2006), The deadly embrace of politics, Yawning Bread, archived from the original on February 4, 2012.
↑ Oakwell Engineering Limited v. Enernorth Industries Inc. 2005 CanLII 27149 , Court File Nos. 04-CV-271121CM3 & 04-CV-274860CM2, (2005) 76 O.R. (3d) 528, Superior Court of Justice (Ontario,Canada).
1 2 Oakwell Engineering Ltd. v. Enernorth Industries Inc. 2006 CanLII 19327 at para. 11, Docket No. C43898, Court of Appeal (Ontario,Canada) ("Oakwell v. Enernorth (C.A.)").
↑ Oakwell Engineering Limited v. Enernorth Industries Inc.: Memorandum of Fact and Law of the Appellant, Enernorth Industries Inc. [Docket No. C43898] (PDF), WeirFoulds LLP, September 16, 2005, para. 18, archived from the original (PDF) on February 16, 2009 ("Appellant's Memorandum").
↑ Appellant's Memorandum, paras. 20 and 24.
↑ Oakwell v. Enernorth (C.A.), paras. 23–24.
↑ Enernorth Industries Inc. v. Oakwell Engineering Limited 2007 CanLII 1145, Supreme Court (Canada).

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References

Oakwell Engineering Limited v. Enernorth Industries Inc. 2005 CanLII 27149 , Court File Nos. 04-CV-271121CM3 & 04-CV-274860CM2, (2005) 76 O.R. (3d) 528, Superior Court of Justice (Ontario,Canada).
Oakwell Engineering Ltd. v. Enernorth Industries Inc. 2006 CanLII 19327 , Docket No. C43898, Court of Appeal (Ontario,Canada) ("Oakwell v. Enernorth (C.A.)").
Enernorth Industries Inc. v. Oakwell Engineering Limited 2007 CanLII 1145, Supreme Court (Canada).