Michel G. Sylvestre

The appellants challenged a permanent injunction restraining a Canadian bank from honouring a letter of counter-guarantee in favour of a Greek bank.

The Greek bank had paid the beneficiary of an underlying letter of guarantee despite an interim order of an ICC arbitral tribunal prohibiting payment, and despite knowledge that the final arbitral award was imminent.

The majority held that where a beneficiary of a counter-guarantee has knowledge of and participates in a third party's fraud under the primary letter of guarantee, that fraud becomes the beneficiary's own and the fraud exception to the autonomy of letters of credit applies.

The dissent would have allowed the appeal, finding that the Greek courts' determination that the demand for payment was valid could not be disregarded, and that the beneficiary was innocent of any fraud.

Appeal dismissed, Karakatsanis and Côté JJ. dissenting.

The Court clarified the two-step framework for proving discrimination under s. 10 of the Quebec Charter and held that prima facie discrimination must be proven on a balance of probabilities.

It found insufficient evidence connecting the U.S. security-clearance refusal to Mr. Latif’s ethnic or national origin, making the tribunal’s finding unreasonable.

Both appeals were dismissed, with costs as ordered.

The applicant, a respondent who did not participate in the appeal proceedings, brought a motion for an extension of time and for a revision of the costs order to clarify that the costs awarded to the successful appellant did not apply to it.

The Supreme Court of Canada granted the motion, noting that the costs award was intended only against the participating respondent.

The Court also granted the extension of time, as discussions had been ongoing and the appellant did not object to the delay.