Canadian courts friendly to foreign judgment creditors

The recent decision of the Supreme Court of Canada (SCC) in Chevron Corp v Yaiguaje should assist Indian and other foreign judgment creditors seeking to enforce against a debtor’s assets in Canada, including Canadian assets held by entities related to the debtor. The decision confirms that the barriers to enforcement of foreign judgments in Canada are low, and continues the trend toward facilitating international business relations and respecting the decisions of foreign courts.

A party that has obtained a judgment from a foreign court can apply to a Canadian court to recognize the judgment and enforce it against the debtor’s assets in Canada. Unlike actions at first instance, a Canadian court asked to recognize and enforce a foreign judgment does not need to be satisfied that there is a real and substantial connection between the Canadian jurisdiction and the claim or parties.

The only real and substantial connection required is to the jurisdiction of the foreign court that granted the judgment. To assume jurisdiction in an action to recognize and enforce a foreign judgment, a Canadian court need only be satisfied that the foreign judgment debtor was properly served with the statement of claim in the enforcement action. Actions for recognition and enforcement can be brought in Canada even if the judgment debtor currently has no Canadian assets.

Torys LLP is an international business law firm that works with clients who expect the best advice and service. John Laskin and John Terry are partners and Sarah Whitmore is an associate at the firm.