IN THE SUPREME COURT OF BRITISH COLUMBIA

Transcription

1 IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Between: And CE International Resources Holdings LLC v. Yeap Soon Sit, 2013 BCSC 1804 CE International Resources Holdings LLC Date: Docket: S Registry: Vancouver Petitioner Yeap Soon Sit, S.A. Minerals Ltd. Partnership and Tantalum Technology Inc. Respondent Before: The Honourable Justice Fisher Reasons for Judgment Counsel for the Petitioner: Counsel for the Respondent, Yeap Soon Sit: A.M. Gunn, Q.C. A.V. Jaiquish, Articled Student H. Parsons, Articled Student D. Lunny No one appearing for the Respondents, S.A. Minerals Ltd. Partnership and Tantalum Technology Inc.: Place and Date of Hearing: Place and Date of Judgment: Vancouver, B.C. August 15, 16, September 25, 2013 Vancouver, B.C. October 1, 2013

2 CE International Resources Holdings LLC v. Yeap Soon Sit Page 2 [1] The Petitioner, CE International Resources Holdings (CEIR), seeks an order recognizing and enforcing a final arbitral award issued on May 24, 2013 in the United States, under the International Commercial Arbitration Act, RSBC 1996, c 233 (the ICAA) and the Foreign Arbitral Awards Act, RSBC 1996, c 154 (the FAAA). [2] This application was first set down for hearing on July 24, 2013 and was adjourned to August 15 and 16, 2013 to allow CEIR to serve the respondents substitutionally and give them time to file responding materials. Until then, none of the respondents were represented by counsel but Mr. Lunny appeared on behalf of Mr. Yeap for the first time. He is now counsel of record for Mr. Yeap in these proceedings. The other respondents have not appeared, have not retained counsel and have not filed any materials. [3] On August 15 and 16, CEIR sought three orders: (1) leave to further amend the petition to seek the order recognizing and enforcing the final arbitral award; (2) service of the application and its supporting materials be deemed to have been effective service of the Further Amended Petition and the time to file responses be abridged to the date of the hearing; and (3) recognition and enforcement of the final arbitral award. Mr. Lunny objected to CEIR s approach in respect of the procedural aspects of this application. He submitted that the application to enforce the foreign arbitral award is a stand-alone fresh claim that should have been brought by way of a new petition; that even if leave is granted to amend the petition, the new relief sought cannot be granted simultaneously with an order granting leave to amend; and that Mr. Yeap is entitled to personal service of the Further Amended Petition and time to file a response. [4] CEIR took this rather unusual approach because, prior to July 24, 2013, Mr. Yeap s prior counsel had withdrawn, after which, on February 5, 2013, Mr. Yeap was found to be in contempt of a prior order of this Court. Since then he has taken no steps to purge his contempt or otherwise participate in these proceedings. However, now that Mr. Yeap has retained new counsel, such an approach is no longer

3 CE International Resources Holdings LLC v. Yeap Soon Sit Page 3 necessary. While I expressed concerns about Mr. Yeap s delay in providing CEIR or the Court with the basis on which he may seek to oppose the recognition order, I considered it in the interests of justice to grant leave for CEIR to further amend the petition, to require CEIR to serve the Further Amended Petition on Mr. Yeap and the other respondents on or before August 21, 2013, and to require Mr. Yeap and the other respondents to file and serve a response to that application and to make full written submissions on or before August 30, 2013, with CEIR to file and serve full written reply submissions on or before September 6, In addition to filing and serving submissions, both CEIR and Mr. Yeap filed additional affidavit material, and objections were made by each for various reasons. Because of this, these parties appeared again on September 25, 2013 for a full oral hearing. [5] I considered it appropriate to grant leave for CEIR to further amend the petition as I saw no substantive difference in proceeding with an amended originating application or a new one. Mr. Lunny submitted that the form of amendment proposed by CEIR disclosed no cause of action, as it sought only to add new relief without setting out the factual basis for that relief. I did not accede to that argument. In my view, it is clear, particularly when the history of this proceeding is considered, that CEIR s application for recognition and enforcement is a right granted under s. 35 of the ICAA. However, I did direct Mr. Gunn to supplement the amendment with the factual basis for the additional relief being sought and he has now done so. Mr. Yeap has had full opportunity to respond to the Further Amended Petition. Background [6] The background of this matter is described at paras of my reasons for judgment in the contempt application (2013 BCSC 186), which I will reproduce here for convenience: CEIR and Mr. Yeap are parties to an international commercial arbitration in New York. CEIR claims breach of contract, fraud and conversion against Mr. Yeap and two corporate entities, S.A. Minerals Ltd. (SAM) and Tantalum Technology Inc. (TTI). It seeks damages of over $8 million USD, plus interest and costs.

4 CE International Resources Holdings LLC v. Yeap Soon Sit Page 4 On September 14, 2012, CEIR initiated this petition against Mr. Yeap, seeking an ex parte freezing order, or Mareva injunction, in aid of the international arbitration. I granted that order on a short term basis - to October 31, and provided Mr. Yeap liberty to apply to set it aside on 48 hours notice (the Freezing Order). The Freezing Order applied to worldwide assets not exceeding a value of $10 million USD. My intention was that the order would provide sufficient time for CEIR to seek similar relief as an interim measure in the arbitration. Mr. Yeap did not apply to set aside the Freezing Order. On September 18, 2012, CEIR applied to the arbitrator for interim measures and there followed a schedule of written submissions from all parties. Also on September 18, 2013, CEIR obtained a freezing order from the High Court of Singapore in respect of Mr. Yeap s assets to a value of $7 million USD. On September 28, 2012, CEIR applied to this Court for disclosure of Mr. Yeap s assets. This application was made with notice. Mr. A.H. Brown appeared on behalf of Mr. Yeap. He sought an adjournment, which was not granted. Mr. Brown was not in a position to argue the matter. However, I granted an order requiring that Mr. Yeap provide a list of assets, verified by affidavit, by October 9, That list was provided to counsel for CEIR on October 9, 2012 with an unsworn affidavit and a sworn affidavit the following day. CEIR considered the asset list deficient. On October 26, 2012, CEIR obtained an interim award in the arbitration (the Interim Award). The arbitrator made provisional findings that Mr. Yeap demonstrated a pattern of fraudulent and dishonest conduct that went well beyond non-performance of the relevant contracts. The Interim Award provided similar relief to the Freezing Order issued by this Court; it required Mr. Yeap, SAM and TTI to provide security of $10 million USD and froze assets pending this security being provided. No security has been posted under the Interim Award. On October 30, 2012, Mr. Yeap and CEIR consented to an order extending the Freezing Order to November 16, On November 9, 2012, CEIR applied on short leave for a number of orders: (1) to amend the petition by adding SAM and TTI as respondents and seeking an order recognizing and enforcing the Interim Award; (2) for substituted service on SAM and TTI; (3) to have the Interim Award recognized and enforced, or alternatively to have the Freezing Order extended; and (4) to require Mr. Yeap to provide a further and better list of assets, for liberty to cross-examine on the same, and for ancillary relief against SAM and TTI to also provide a list of assets. Mr. Brown opposed the short leave and sought an adjournment, which was granted with respect to most of the relief sought but denied with respect to the application for a further and better list of assets by Mr. Yeap and cross-examination. I ordered Mr. Yeap to provide counsel for CEIR with a further and better list, verified by affidavit, within seven days (by November 16, 2012), and I granted CEIR liberty to cross-examine him on his further affidavit. This is the order that is the subject of the contempt application. On November 9, 2012, I also made orders regarding service to SAM and TTI and extending the Freezing Order until further order of this Court. I made the latter order for the purpose of allowing CEIR to obtain the disclosure it sought

5 CE International Resources Holdings LLC v. Yeap Soon Sit Page 5 in respect of the Freezing Order. Although Mr. Brown made no submissions on this issue, he pointed out that he had the right to apply to set the Freezing Order aside at any time. On December 13, 2012, CEIR proceeded with the balance of its application and added an application to find Mr. Yeap in contempt of the November 9, 2012 order regarding the further and better list of assets. Mr. Brown appeared for Mr. Yeap. He took no position on the application to amend the petition and to recognize and enforce the Interim Award but raised several issues in relation to some of the relief sought. He opposed the contempt application and made submissions on the issues of non-compliance raised by CEIR in Mr. Gunn s oral submissions but advised the Court he was not prepared to fully respond. I allowed CEIR s application to amend the petition and to recognize and enforce the Interim Award, but denied its application for ancillary relief in respect of SAM and TTI, as such relief was not granted in the Interim Award. I adjourned the contempt application. I directed CEIR to proceed to crossexamine Mr. Yeap on his further and better affidavit before proceeding any further and gave liberty to set down a show cause hearing on the contempt application if necessary. On December 18, 2012, Mr. Gunn on behalf of CEIR gave notice that Mr. Yeap attend for cross-examination on his further and better list of assets and affidavit on January 7, 2013 in Vancouver. On December 29, 2012, Mr. Brown advised that Mr. Yeap was scheduled for an MRI on January 7 and therefore unable to attend that day. He stated that he hoped to be given alternate dates when Mr. Yeap could travel to Vancouver to attend the examination. CEIR did not agree to adjourn the January 7 examination for a number of reasons which were set out in correspondence from Mr. Gunn on January 2, CEIR attended for the cross-examination on January 7, 2013 but Mr. Yeap did not. There was no further communication from Mr. Brown, who is now off the record in respect of the contempt application and will be taking steps to withdraw as counsel for all purposes. Meanwhile, on December 10, 2012, CEIR obtained an order in the United States District Court of New York confirming the Interim Award and subsequently moved for an order of contempt against Mr. Yeap for his failure to comply with the court s judgment. Mr. Yeap was ordered to testify at a deposition concerning his ability to comply with the Interim Award. This deposition was to take place in Vancouver on January 7, 2013, concurrently with the cross-examination scheduled in this proceeding. As indicated above, Mr. Yeap did not attend on January 7. He also did not attend a show cause hearing in New York on January 14, On January 24, 2013, the New York court granted CEIR s motion to hold Mr. Yeap in civil contempt for wilfully and deliberately refusing to comply with the December 10, 2012 order. The court fined Mr. Yeap $5,000 per business day, escalating to $20,000 per day after 20 business days, and also ordered his arrest and civil commitment, wherever he may be found in the jurisdiction of the United States, and his detention pending further order of the court.

6 CE International Resources Holdings LLC v. Yeap Soon Sit Page 6 [7] On February 5, 2013, I found Mr. Yeap to be in contempt of the November 9, 2012 order to provide a further and better list of assets. I awarded special costs to CEIR and sanctioned Mr. Yeap with an order of committal and a fine of $5,000 per business day, continuing until satisfactory evidence of compliance is provided to the Court. Since that time Mr. Yeap has taken no steps to purge his contempt and has apparently remained outside Canada. [8] On May 24, 2013, CEIR obtained a final award against SAM, TTI and Mr. Yeap in the arbitration (the Final Award). [9] The issue in the arbitration involved liability under two contracts and claims of fraud against Mr. Yeap. The first contract was an Amended Purchase Contract in which SAM sold to CEIR approximately 125,000 lbs. of rare metals (or syncons). CEIR was required to, and did in May 2009, make a provisional payment of 90% of the purchase price, which amounted to $4,376,561. The second contract was a 2011 Sales Contract in which TTI purchased from CEIR approximately the same amount of syncons for a price of $8,055,000. The syncons were never delivered by SAM to CEIR and TTI never paid the purchase price to CEIR. [10] The arbitrator held that SAM and Mr. Yeap were jointly and severally liable to CEIR for breach of the Amended Purchase Contract for failure to deliver the syncons, and that TTI and Mr. Yeap were jointly and severally liable to CEIR under the 2011 Sales Contract. He also held that he had jurisdiction over Mr. Yeap as a party to the contracts, including their respective arbitration clauses, on the basis that TTI acted as Mr. Yeap s alter ego and that Mr. Yeap was estopped from denying that he was a party to both contracts. [11] While he did not need to determine CEIR s claim of fraud, the arbitrator stated in the Final Award that he would have done so based on the evidence before him. He found that Mr. Yeap benefitted from a fraudulent course of conduct by obtaining payment of the $4,376,561 by CEIR to SAM and transferring $2,345,000 shortly thereafter from SAM s account to his own personal account. [12] The arbitrator ordered (1) Mr. Yeap or SAM to deliver the syncons to CEIR within 30 days; (2) if the syncons were delivered, TTI was to either renounce its

7 CE International Resources Holdings LLC v. Yeap Soon Sit Page 7 claim to them or pay the $8,055,000 contract price to CEIR within 60 days; (3) if the syncons were not delivered, Mr. Yeap and TTI were to pay to CEIR $8,055,000 in respect of the 2011 Sales Contract, and Mr. Yeap and SAM were to pay to CEIR $7,583,161 in respect of the Amended Purchase Contract; the liability of Mr. Yeap was not to exceed $8,055,000 and if any respondent paid any amount to CEIR the liability of the other respondents would also be reduced. In addition, the arbitrator awarded payment by Mr. Yeap, TTI and SAM of administrative fees and compensation and expenses for the arbitrator and an emergency arbitrator ($118,309), pre-award interest ($1,253,270), post-award interest at 9% per annum, and attorney fees and disbursements (approximately $400,000), increasing the final award to approximately $9.9 million. [13] The syncons have not been delivered to CEIR and no payments have been made pursuant to the award. On June 27, 2013, the Final Award was confirmed in the United States District Court, Southern District of New York. That court ordered judgment to be entered in favour of CEIR against Mr. Yeap and TTI, jointly and severally, in the amount of $9,930,494 plus post-judgment interest on any unpaid balance from July 28, Mr. Yeap took no steps to object to the New York court s confirmation of the award. Recognition and enforcement [14] In this application, CEIR seeks an order under s. 35 of the ICAA recognizing and enforcing the Final Award. It also relies on the FAAA, which includes as a schedule the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention). [15] Section 35(1)of the ICAA provides: (1) Subject to this section and section 36, an arbitral award, irrespective of the state in which it was made, must be recognized as binding and, on application to the Supreme Court, must be enforced. [16] Section 35(2) requires CEIR as the party applying for enforcement to supply either the duly authenticated original arbitral award or a duly certified copy of it,

8 CE International Resources Holdings LLC v. Yeap Soon Sit Page 8 and the original arbitration agreement or a duly certified copy of it. There is no dispute that these requirements have been met by CEIR. [17] Section 36(1) of the ICAA sets out the grounds on which a court may refuse to recognize or enforce a foreign arbitral award: (1) Recognition or enforcement of an arbitral award, irrespective of the state in which it was made, may be refused only (a) at the request of the party against whom it is invoked, if that party furnishes to the competent court where recognition or enforcement is sought proof that (i) a party to the arbitration agreement was under some incapacity, (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made, (iii) the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present the party's case, (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the arbitral award which contains decisions on matters submitted to arbitration may be recognized and enforced, (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement, was not in accordance with the law of the state where the arbitration took place, or (vi) the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made, or (b) if the court finds that (i) the subject matter of the dispute is not capable of settlement by arbitration under the law of British Columbia, or (ii) the recognition or enforcement of the arbitral award would be contrary to the public policy in British Columbia. [18] Similar provisions are found in Articles IV and V of the Convention. [19] The ICAA implements in British Columbia the 1985 UNCITRAL Model Law on International Arbitration (the Model Law). It is well known that a high degree of

9 CE International Resources Holdings LLC v. Yeap Soon Sit Page 9 deference is to be given to decisions of arbitrators in international arbitrations. This is based on concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes as discussed in Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc, 473 US 614 at 629 (1985) and adopted by the BC Court of Appeal in Quintette Coal Limited v Nippon Steel Corporation, [1990] BCJ No 2241 (CA). The court held that these principles in Mitsubishi are as compelling in this jurisdiction as they are in the United States or elsewhere, and concluded, at 229: It is meet, therefore, as a matter of policy, to adopt a standard which seeks to preserve the autonomy of the forum selected by the parties and to minimize judicial intervention when reviewing international commercial arbitral awards in British Columbia. That is the standard to be followed in this case. [20] In Corp Transnacional de Inversiones v STET International, [1999] OJ No 3573 at 190 (Sup Ct), aff d [2000] OJ No 3408 (CA), leave to appeal refused, [2000] SCCA No 581, the court discussed the governing principals of the Model Law: The Model Law is a collaborative effort among nations to facilitate the resolution of international commercial disputes through the arbitral process. It is in force in numerous jurisdictions around the world... Article 5 of the Model Law expressly limits the scope for judicial intervention except by application to set aside the award or to resist enforcement of an award under one or more of the limited grounds specified in Articles 34 or 36. Under Article 34 of the Model Law, the applicants bear the onus of proving that the awards should be set aside. If the applicants fail to satisfy this onus, Articles 35 and 36 of the Model Law expressly require this court to recognize and enforce the awards. The broad deference and respect to be accorded to decisions made by arbitral tribunals pursuant to the Model Law has been recognized in this jurisdiction by the Ontario Court of Appeal in Automatic Systems Inc. v. Bracknell Corp. (1994), 18 O.R. (3d) 257 at p. 264, 113 D.L.R. (4th) 449 at p. 456: The purpose of the United Nations Conventions and the legislation adopting them is to ensure that the method of resolving disputes in the forum and according to the rules chosen by the parties, is respected. Canadian courts have recognized that predictability in the enforcement of dispute resolution provisions is an indispensable precondition to any international business transaction and facilitates and encourages the pursuit of freer trade on an international scale: Kaverit Steel & Crane Ltd. v. Kone Corp. (1992), 87 D.L.R. (4th) 129 at p. 139, 85 Alta. L.R. (2d) 287 (C.A.).

10 CE International Resources Holdings LLC v. Yeap Soon Sit Page 10 [21] While Quintette Coal and Corp Transnacional involved applications to set aside foreign arbitral awards, Adamas Management & Services Inc v Aurado Energy Inc, 2004 NBQB 342, involved an application to recognize and enforce one. In applying the legislation in New Brunswick (which is equivalent to the ICAA), the court held at para. 18: Recognition and enforcement of the Award in New Brunswick is consistent with the objects and purposes of the ICAA, namely to give effect to parties' contractual intentions to refer matters to arbitration, as well as achieve consistency among jurisdictions and predictability in the resolution of international commercial disputes. By achieving such consistency and predictability, the ICAA encourages use of international arbitration as a means of alternative dispute resolution, thereby facilitation [sic] and promoting international trade and commerce. [citations omitted]. [22] These authorities clearly establish that under the ICAA (and the FAAA) the court is required to recognize and enforce foreign arbitral awards unless the party opposing recognition satisfies the onus of proving that one or more of the grounds set out in s. 36(1)(a) or (b) apply. The positions of the parties [23] CEIR submits that it has satisfied the conditions precedent to recognition and enforcement under s. 35 of the ICAA, Mr. Yeap has failed to establish any of the prescribed exceptions to enforcement set out in s. 36, and it is therefore entitled to an order enforcing the Final Award. [24] Mr. Yeap opposes the order sought primarily on the basis that he was not a party to the arbitration agreements. He also raises an issue of procedural fairness in the arbitration. He relies on s. 36(1)(a)(iv) and s. 36(1)(b) of the ICAA and the decision of this court in Javor v Francouer, 2003 BCSC 350, aff d 2004 BCCA 134. Mr. Yeap as a party to the arbitration agreements [25] Mr. Yeap says that he was a signatory to the arbitration agreements only in his capacity as signing authority for SAM and TTI and was not, in his personal capacity, a party to those agreements. He disputes the arbitrator s finding in the

11 CE International Resources Holdings LLC v. Yeap Soon Sit Page 11 Final Award that he was a party to the agreements and says this is not a basis against which jurisdiction over him could be found in British Columbia. [26] His primary argument opposing recognition stems from Javor, where the court refused to recognize a foreign arbitral award of costs against an individual who was not a party to an arbitration agreement. [27] In Javor, an arbitration took place in California pursuant to an arbitration agreement between Mr. Javor and Fusion-Crete, Inc. as claimants and Fusion-Crete Products Inc. as respondent. During the proceeding, the arbitrator found that Mr. Francoeur was the alter ego of Fusion-Crete Products Inc. and subsequently, he was added as a party to the arbitration proceeding and an order for costs was made against him. However, the arbitrator did not find that Mr. Francoeur was a party to the arbitration agreement. He was not a named party and was not a signatory to it in his individual capacity. [28] In dismissing the application for recognition as against Francoeur, Holmes J. held as follows, at paras : An arbitration agreement is the common foundation upon which each of the two statutes [the ICAA and the FAAA] rest. The obvious goal of each is to allow enforcement of an award against a party signatory to the agreement. The parties voluntarily contract to accept enforcement by the court in their home jurisdiction should they be found in breach of contract in an arbitration award held in another jurisdiction. In the circumstances here the issue is whether a person who was not party to an arbitration agreement but was found by an arbitrator to be a proper party to the arbitration proceeding can have an award for costs against him enforced under the FAAA or the ICAA. [29] He concluded that neither the ICAA nor the FAAA provided for enforcement of arbitration awards against a person who was not a party to the arbitration agreement. He held that under s. 36(1)(a)(v) of the ICAA, the arbitration procedure was not in accordance with the agreement of the parties because the arbitration agreement did not provide for the involvement of Mr. Francoeur as a party, and under s. 36(1)(b)(i), the claim against Francoeur for personal liability could not

12 CE International Resources Holdings LLC v. Yeap Soon Sit Page 12 properly have been the subject of arbitration in British Columbia as he was not a party. [30] Mr. Gunn does not take issue with the principle in Javor that arbitration awards cannot be recognized and enforced against persons who are not parties to arbitration agreements. He submits, however, that Javor does not apply in the circumstances here, because the arbitrator specifically found that Mr. Yeap was a party to the arbitration agreements. He says that the issue of jurisdiction over Mr. Yeap was thoroughly addressed by the arbitrator, and his findings on this issue are not matters for a court to consider in an application for recognition and enforcement. [31] Mr. Lunny submits that CEIR s position ignores the statutory framework governing applications to enforce foreign arbitral awards, which necessarily involves this Court s review over the issue of jurisdiction and whether an arbitral award could be enforced in British Columbia. He also challenges whether the arbitrator actually made a finding that Mr. Yeap was a party to the arbitration agreements and submits that the reference in the Final Award on this point is a finding wholly unfounded by his reasons in the Interim Award. [32] I cannot accept Mr. Lunny s submission. It assumes that the identity of the parties is an issue for the court to consider de novo on an application to recognize an arbitral award, that the arbitrator s decision that Mr. Yeap was a party to the arbitration agreements is not binding on this court, and that the court is empowered to scrutinize the arbitrator s findings of jurisdiction. The court must accept the arbitrator s decision on its face and cannot go behind it. This is what the court did in Javor by accepting the arbitrator s finding that Mr. Francoeur was a party to the arbitration proceeding but not the arbitration agreement. [33] I agree with Mr. Gunn s submission. Although Mr. Yeap was not a signatory to the contracts in his personal capacity, he was added as a party to the arbitration in July In doing so, CEIR alleged various theories by which a non-signatory may be made a party to an arbitration agreement. Mr. Yeap challenged this throughout the arbitration, made extensive submissions, and by doing so agreed to arbitrate the

13 CE International Resources Holdings LLC v. Yeap Soon Sit Page 13 issue of whether he was a party. The arbitrator considered all of the theories advanced by CEIR and determined that he had jurisdiction over Mr. Yeap on two bases: (a) TTI was the alter ego of Mr. Yeap (determined under British Virgin Islands law, the jurisdiction of TTI s incorporation); and (b) Mr. Yeap was estopped from denying that he was a party to both contracts (determined under New York law, which was the substantive law of the contracts). [34] On this issue, the Final Award incorporated by reference the comprehensive reasons in the Interim Award. The arbitrator made extensive findings against Mr. Yeap in respect of his dealings with SAM and TTI and had no doubt that a British Virgin Islands court would pierce the corporate veil of TTI and find that it acted as Mr. Yeap s alter ego. At para. 48 of the Interim Award he concluded that he had jurisdiction over Mr. Yeap in relation to the 2011 TTI Contract on this basis. At para. 49, he explained that under New York law, a non-signatory to an arbitration agreement may be estopped from avoiding arbitration where he knowingly accepts the benefits of an agreement with an arbitration clause. He found that Mr. Yeap had knowingly accepted the benefits of both contracts, including their respective arbitration clauses, and was estopped from avoiding arbitration under those clauses. He confirmed this in the Final Award, finding (at para. 60) that he had jurisdiction over Mr. Yeap in relation to both contracts, and more specifically that Mr. Yeap was a party to both contracts and to the arbitration clauses incorporated in them. [35] These findings and conclusions are consistent with international arbitration law in this jurisdiction and elsewhere. The ICAA defines a party to an arbitration agreement as including a person claiming through or under a party and nonsignatories have been held to be bound by arbitration agreements in various ways that include piercing the corporate veil (alter ego) and estoppel: see Nigel Blackaby & Constantine Partasides, Redfern and Hunter on International Arbitration (Oxford: Oxford University Press, 2009) at ; Gary B. Born, International Commercial Arbitration, vol 1 (Alphen aan den Rijn, The Netherlands: Kluwer Law International, 2009) at ; J. Kenneth McEwan and Ludmila B. Herbst, Commercial Arbitration in Canada: A Guide to Domestic and International Arbitrations (Toronto:

14 CE International Resources Holdings LLC v. Yeap Soon Sit Page 14 Thomson Reuters Canada Limited, 2013) at 2:110. Moreover, these are questions that are normally determined in the arbitration under the applicable law: see for example, Pan Liberty Navigation Co v World Link (HK) Resources Ltd., 2005 BCCA 206 at para. 19. [36] The issue of the arbitrator s jurisdiction and Mr. Yeap s status as a party was a matter for the arbitrator to decide. The arbitration agreements provided that the proceedings were to be governed by the International Dispute Resolution Procedures of the American Arbitration Association. Article 15(1) of those rules provides that the arbitrator has the power to rule on his own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement. In my opinion, it is not the role of this Court on such an application to consider the merits of a substantive issue that was the arbitrator s to decide. [37] Nor is it proper for Mr. Yeap to re-litigate such an issue here. Mr. Yeap was represented in the arbitration by experienced U.S. counsel. If he wanted to further challenge the arbitrator s jurisdiction to determine his party status, or to challenge the decision on its merits, he ought to have taken steps to do so in another forum. Instead, he chose only to challenge this issue within the arbitration itself. He took no steps to raise this issue during any of the proceedings taken in this jurisdiction and elsewhere to freeze his assets and to recognize the Interim Award, and he took no steps to do so before the Final Award was confirmed in the District Court of New York. [38] The fact that Mr. Yeap was unsuccessful on this issue before the arbitrator does not give rise to a basis for refusing recognition under s. 36(1)(a)(v) of the ICAA, as the procedure followed in the arbitration was in accordance with the arbitration agreements. Nor does it give rise to a basis for refusing recognition under s. 36(1)(a)(iv), as the Final Award deals with disputes falling within the submission to arbitration, and the decision on the arbitrator s jurisdiction and Mr. Yeap s status as a party was within the scope of the of the submission to arbitration. [39] Further, I see no basis to refuse recognition under s. 36(1)(b)(i) or (ii).

15 CE International Resources Holdings LLC v. Yeap Soon Sit Page 15 [40] Section 36(1)(b)(i) applies where the subject matter of the dispute is not capable of settlement by arbitration under the law of British Columbia. Mr. Lunny submits that Mr. Yeap could not be the subject of an arbitral award in British Columbia because was not a signatory to the arbitration agreements in his personal capacity. He relies on Javor at para. 30, where the court held that the jurisdiction of arbitrators in British Columbia is confined to jurisdiction over parties to arbitration agreements. In the circumstances of this case, where Mr. Yeap was determined to be a party to the agreements, this is a circular argument. [41] Section 36(1)(b)(ii) applies where recognition or enforcement would be contrary to public policy in British Columbia. This ground is to be narrowly construed. In Corp Transnacional, the court referred at 192 to this passage from Schreter v Gasmac Inc, [1992] OJ No 257 (Gen Div) at 623: The concept of imposing our public policy on foreign awards is to guard against enforcement of an award which offends our local principles of justice and fairness in a fundamental way, and in a way which the parties could attribute to the fact that the award was made in another jurisdiction where the procedural or substantive rules diverge markedly from our own, or where there was ignorance or corruption on the part of the tribunal which could not be seen to be tolerated or condoned by our courts. [42] There is nothing in the arbitrator s determination on the issue of Mr. Yeap s status as a party that can be said to offend our local principles of justice and fairness. [43] I have addressed the merits of Mr. Yeap s argument regarding his status as a party despite CEIR s primary position that he is estopped from raising this issue due to his failure to do so at any earlier stage of the proceedings before this Court. I do not consider it necessary to decide if an estoppel arises in these circumstances. However, the fact that this issue was raised only now is of concern to me in light of Mr. Yeap s failure to take any steps to set aside the Freezing Order and more importantly, to object when this Court was asked to recognize and enforce the Interim Award. To refuse to recognize the Final Award in these circumstances would result in inconsistent orders. While I appreciate that the Interim Award was subject to

16 CE International Resources Holdings LLC v. Yeap Soon Sit Page 16 change, the Final Award in fact confirmed the findings and conclusions contained in it. In my view, the timing of his objection, in the context of the history of both the arbitration and this proceeding, reflects poorly on Mr. Yeap and demonstrates the weakness of his arguments. Procedural fairness [44] Mr. Yeap also raises an issue of procedural fairness in the conduct of the arbitration that Mr. Lunny suggests relates to the application of s. 36(1)(b)(ii), the public policy grounds for refusing recognition. [45] Mr. Yeap s Thai counsel in the arbitration, Dr. Rungsaeng Kittayapong, provided a declaration attesting to the arbitrator s decision to set the hearing on January 14 to 16, 2013 despite the fact that neither he (Dr. Kittayapong) nor an expert witness on Thai law were available to attend on those days. [46] This declaration is not proper evidence. It is unsworn but attached as an exhibit to the affidavit of Mr. Lunny s legal assistant. However, I am prepared to consider it because I do not think it raises an issue that justifies a refusal of the order sought in any event. [47] Dr. Kittayapong alleges that the decision to set the hearing on those days was unfair to Mr. Yeap because he was not given the opportunity to present his argument, based on Thai law, that he was not a party to the arbitration agreements as a result of the dissolution of SAM as a Thai limited partnership. [48] Marc Goldstein, CEIR s counsel in the arbitration, provided an affidavit setting out in considerable detail how the arbitration was conducted and the extent of Mr. Yeap s participation. He deposed that Dr. Kittayapong did not participate in the arbitration after October 1, 2012, when the U.S. law firm of Shearman & Sterling began to represent Mr. Yeap.

17 CE International Resources Holdings LLC v. Yeap Soon Sit Page 17 [49] The arbitrator set the dates of January after the matter had been postponed the previous month. He did not consider Dr. Kittayapong s presence to be necessary, as explained at para. 26 of the Final Award: Counsel for [Mr. Yeap] continued to object to the dates in January, on the basis of the unavailability during that entire month of [Mr. Yeap s] Thai counsel, Dr. Kittayapong. No objection was made that Shearman & Sterling was unavailable, not could any objection be made on the basis of the unavailability of [Mr. Yeap], who had already announced that he would not attend the hearing in person or by videoconference. The purported unavailability of [Mr. Yeap s] expert witness on Thai law was not relevant, since his presence was not required. Accordingly, and given that the interests of [Mr. Yeap] at the hearing would be more than adequately represented by Shearman & Sterling, I fixed January 14-16, 2013 as the dates for the adjourned evidentiary hearing. Shearman & Sterling, on behalf of [Mr. Yeap], strenuously objected to this and reserved all rights and objections arising from the scheduling of the hearing on those dates. [50] It is apparent from these reasons that the arbitrator considered procedural fairness issues in setting the hearing dates. [51] In any event, neither Mr. Yeap nor Shearman & Sterling appeared at the January hearing and there is nothing in Mr. Yeap s materials before me explaining this. Moreover, there was no issue of Thai law decided adversely to Mr. Yeap, as the decision finding him a party to the arbitration agreements was based on British Virgin Islands and U.S. law. [52] Accordingly, there is nothing in the evidence provided by Mr. Yeap in this application that gives rise to an unfairness that comes close to satisfying any public policy basis for refusing to recognize the Final Award. Order [53] CEIR is granted an order recognizing and enforcing the Final Award. As the successful party, it is also entitled to its costs. Fisher, J.