The respondents brought a motion to stay an oppression application commenced by a significant noteholder under a corporate debt indenture.
They argued that a “no action” clause in the indenture barred the proceeding unless procedural preconditions were satisfied, including notice to the trustee and trustee enforcement.
The court held that although no‑action clauses are often interpreted broadly, their scope depends on the wording of the indenture and the trustee’s contractual powers.
Because the trustee’s enforcement authority under the indenture was limited to pursuing payment defaults, it did not extend to bringing oppression proceedings.
The applicant’s oppression claim was therefore not captured by the clause and the motion to stay was dismissed.
