COURT OF APPEAL FOR ONTARIO DATE: 20210428 DOCKET: M52370 (C69265)

Paciocco J.A. (Motion Judge)

BETWEEN

UD Trading Group Holding PTE. Limited, UIL Singapore PTE. Limited, UIL Malaysia Limited, UIL Commodities DMCC, Vadox Corp. and Prateek Gupta Plaintiffs/Moving Parties/Responding Parties by Cross-Motion (Appellants/Moving Parties)

and

TransAsia Private Capital Limited , TA Private Capital Security Agent Ltd. , Rutmet Inc. and Export Development Canada Defendants/Responding Parties/Moving Parties by Cross-Motion (Respondents/ Responding Parties )

Counsel: Michael D. Schafler, Kenneth Kraft, Ara Basmadjian, and Rebecca Curcio, for the moving parties George J. Pollack and Chenyang Li, for the responding parties

Heard: April 19, 2021 by video conference

Endorsement

Overview

[1] On March 17, 2021, C. Gilmore J. dismissed a motion for an anti-suit injunction brought by the moving party plaintiffs, Prateek Gupta, UD Trading Group Holding PTE. Limited (“UDTG”), and several related companies, including three subsidiaries of UDTG (the “UIL Companies”).

[2] In the same endorsement, the motion judge allowed a cross-motion by the responding party defendants, TransAsia Private Capital Limited and TA Private Capital Security Agent Ltd. (collectively referred to as “TAP”) to permanently stay the underlying action initiated by the moving parties in Ontario (the “Underlying Action”) on the basis of forum non conveniens and forum selection clauses. The moving parties have appealed this aspect of the motion judge’s order.

[3] By endorsement dated April 20, 2021, I dismissed the moving parties’ request for a stay pending appeal and/or an order expediting the appeal, for reasons to follow. These are those reasons.

Material Facts

[4] The Underlying Action arises from a series of complex international commercial transactions involving the moving parties, the responding parties, and other corporate parties.

The key players

[5] Before unfolding the agreements and transactions that matter to the motion before me, it is helpful to begin with a brief outline of the key players:

• Rutmet Inc. (“Rutmet”) is an Ontario-based metal trading company operating in Ontario.
• Export Development Canada (“EDC”) is a Canadian Crown corporation and insurance provider operating in Ontario and throughout Canada.
• TransAsia Private Capital Limited, one of the TAP companies, is an asset management company incorporated and headquartered in Hong Kong, with offices in Singapore. It does not carry on business in Ontario or Canada.
• TA Private Capital Security Agent Ltd., the other TAP company, is incorporated and headquartered in the British Virgin Islands. It operates as an affiliate of TransAsia Private Capital Limited and does not carry on business in Ontario or Canada.
• UDTG was incorporated in Singapore, where its head office is located. Along with its subsidiaries, some of which are set out below, UDTG carries on business primarily in Asia and the Middle East and has offices in Dubai, United Arab Emirates (“UAE”). UDTG provides its customers with access to metal products and raw materials.
• Prateek Gupta is a director of UDTG and is resident in Dubai.
• The UIL Companies are three subsidiaries of UDTG, incorporated and headquartered in Singapore, Malaysia, and the UAE, respectively. The UIL Companies are in the business of metal trading.
• Vadox Corp. is a subsidiary of UDTG’s holding company, PPrime Limited. Vadox Corp. is incorporated and headquartered in the British Virgin Islands. It has no active operations. Although it is a moving party, it is unnecessary to refer to Vadox Corp. to unfold the relevant narrative.

The relevant agreements and transactions

[6] Reduced to the simplest of terms, Rutmet owed money to TAP as the result of a May 24, 2019 loan agreement for US$60 million (the “Rutmet Loan Agreement”). In exchange for liquidity, the Rutmet Loan Agreement provided TAP with security in the form of Rutmet’s receivables, which TAP was authorized to collect or bill directly from Rutmet’s customers, along with fees and interest. As a condition of the Rutmet Loan Agreement, Rutmet obtained accounts receivable insurance from EDC, the benefits of which Rutmet assigned to TAP (the “EDC Policy”).

[7] Rutmet had accounts receivable from metal sales to the UIL Companies. UDTG provided Rutmet with an unlimited corporate guarantee for the indebtedness of the UIL Companies (the “UDTG Guarantee”). Mr. Gupta provided Rutmet with an additional US$30 million guarantee for those same debts (the “Gupta Guarantee”).

[8] By September 2019, Rutmet had defaulted on payments it owed to TAP under the Rutmet Loan Agreement. On November 22, 2019, Rutmet and TAP executed a forbearance agreement in which TAP agreed to refrain from exercising its rights as a creditor against Rutmet until December 13, 2019 (the “Forbearance Agreement”). In return, Rutmet granted TAP a power of attorney to make claims on its behalf to enforce the UDTG and Gupta Guarantees. Rutmet also executed a power of attorney authorizing TAP to make arrangements to secure the proceeds of insurance for unpaid receivables under the EDC Policy.

[9] The forbearance period under the Forbearance Agreement ended on December 13, 2019, with Rutmet having failed to cure its defaults before the deadline. TAP then notified Rutmet of TAP’s intention to enforce its security.

The relevant legal proceedings

[10] On February 13, 2020, TAP commenced a receivership application in Ontario against Rutmet (the “Receivership Application”). That Application led to the compelled disclosure by Rutmet of information necessary to permit TAP to submit a claim for coverage under the EDC Policy. The Receivership Application was then abandoned.

[11] TAP then submitted a claim to EDC under the Policy, but coverage was denied. On July 22, 2020, TAP brought an application in Ontario against EDC for declarations relating to EDC’s refusal to provide coverage under the Policy (the “EDC Application”). The EDC Application remains outstanding.

[12] As assignee, TAP also took steps to enforce the UDTG Guarantee of the debt owed by the UIL Companies to Rutmet. On July 9, 2020, TAP instituted an action in Singapore to enforce the UDTG Guarantee (the “Singapore Action”).

[13] UDTG secured an order extending the time required to file a statement of defence in the Singapore Action until August 18, 2020. On that date, instead of filing a statement of defence, UDTG applied for a stay of the Singapore Action on the basis that Ontario is the most appropriate forum (the “Singapore Stay Application”). The Singapore Stay Application has been adjourned multiple times. At the time I heard this motion, the Singapore Stay Application was scheduled for April 23, 2021.

[14] Mr. Gupta resides in Dubai. On August 18, 2020, to conform with UAE law, TAP (via Rutmet) served Mr. Gupta with a final demand for payment under the Gupta Guarantee. If Mr. Gupta failed to pay, that notice permitted TAP to commence an enforcement action in Dubai on August 26, 2020.

[15] On August 19, 2020, the day after Mr. Gupta was notified that the Gupta Guarantee would be enforced, the moving parties notified TAP that they had commenced the Underlying Action in Ontario on August 12, 2020. The relief sought in the Underlying Action includes declarations that (a) there are no outstanding receivables from the UIL Companies, and (b) there are no amounts owing under either of the UDTG or Gupta Guarantees.

[16] In support of their claims, the moving parties contend TAP already recouped the funds owed by the UIL Companies to Rutmet (and assigned to TAP under the Rutmet Loan Agreement). They maintain this was accomplished when receivables owed to UDTG from metal sales were assigned and then paid to Triton Metallics Pte. Ltd. (“Triton”), a company the moving parties claim is controlled by TAP.

[17] The moving parties further allege that, despite having been paid in this way, TAP then improperly enforced “additional security” for the Rutmet Loan Agreement. This alleged additional security took the form of shares in Gympie Eldorado Mining Pty Limited (“GEM”) and Hangji Global Limited (the “GEM and Hangji Security”). The moving parties contend that, although the relevant agreements indicate that the GEM and Hangji Security relates to independent loans TAP made to two of the UIL Companies (the “UIL Loan Agreements”), in fact, the GEM and Hangji Security was provided to secure the Rutmet Loan Agreement.

[18] The moving parties allege the GEM and Hangji Security was arranged under the UIL Loan Agreements to hide its true nature from EDC ( i.e., as additional security for the Rutmet Loan Agreement), so that EDC would not rely on the riskiness of the GEM and Hangji Security to increase the deductible component on Rutmet’s accounts receivable insurance. The moving parties claim that this structure effectively increased the value of the EDC Policy in favour of TAP by US$30 million.

[19] The moving parties claim they agreed to this arrangement at TAP’s insistence, on whom they had become financially dependent. They claim TAP was unjustly enriched by realizing on the GEM and Hangji Security under the UIL Loan Agreements after already having been made whole through Triton for the Rutmet Loan Agreement. In the Underlying Action, the moving parties not only seek to prevent TAP from enforcing the UDTG and Gupta Guarantees, they also seek damages from TAP for its alleged unjust enrichment.

[20] On August 26, 2020, having provided the requisite five business days’ notice, TAP (via Rutmet) commenced an action in Dubai to enforce the Gupta Guarantee (the “UAE Action”). Mr. Gupta has filed a “Statement of Reply”, the UAE equivalent of a statement of defence, and the UAE Action is currently in the pre-trial phase.

[21] By notice of motion dated September 3, 2020, the moving parties asked the Ontario Superior Court of Justice for interim and anti-suit injunctions restraining TAP and Rutmet from continuing the Singapore Action and the UAE Action, and for an order consolidating the Underlying Action with the Receivership Application and the EDC Application (the “Anti-Suit Motion”).

[22] On September 8, 2020, Conway J. dismissed the moving parties’ request for an interim injunction. On September 16, 2020, Conway J. set a date of November 10, 2020 for a hearing on the merits of the Anti-Suit Motion. In the meantime, she urged the parties not to take steps in the Singapore Action or the UAE Action that would render the Anti-Suit Motion moot. The parties negotiated a stand-still arrangement, including relating to the Singapore Stay Application.

[23] By notice of cross-motion, dated September 22, 2020, TAP sought orders from the Superior Court, including a permanent stay of the Underlying Action on the basis that the Ontario courts lack jurisdiction due to forum non conveniens (the “Permanent Stay Motion”).

[24] TAP denies the allegations made in the Underlying Action, including the claim that they have been paid through Triton, and contends that the Underlying Action is a pretense intended to delay and frustrate TAP’s legitimate enforcement actions abroad.

The decision under appeal

[25] The Anti-Suit Motion and the Permanent Stay Motion were heard together on January 19, 2021 before the motion judge, C. Gilmore J. On March 17, 2021, the motion judge issued her decision dismissing the moving parties’ Anti-Suit Motion and granting the responding parties’ Permanent Stay Motion with respect to the Underlying Action.

[26] On April 6, 2021, the moving parties filed a notice of appeal of the motion judge’s decision in this court. Although the moving parties allege the motion judge made a number of errors in dismissing the Anti-Suit Motion, they concede it was open to her to deny an anti-suit injunction because there was evidence before her that there were numerous potential alternative jurisdictions.

[27] Therefore, the moving parties appeal only the motion judge’s order granting the Permanent Stay Motion. They say she erroneously concluded that, having denied the anti-suit injunction, a permanent stay on the basis of forum non conveniens should automatically issue on the same grounds.

The Issues

[28] The issues on this motion can be stated simply:

(1) Should a stay pending appeal be granted with respect to the motion judge’s March 17, 2021 order imposing a permanent stay of the Underlying Action? (2) Should the appeal be expedited?

Analysis

1. The Stay Motion

[29] Where a party seeks a stay pending appeal, the overarching consideration is whether the interests of justice call for a stay: BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16; 2257573 Ontario Inc. v. Furney, 2020 ONCA 742, at para. 20. This determination is informed by the three factors described in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334:

(a) A preliminary assessment must be made of the merits of the case to ensure there is a serious question to be determined on the appeal; (b) It must be determined whether the moving party would suffer irreparable harm if the stay were refused; and (c) An assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the merits.

[30] As Laskin J.A. noted in Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674, at p. 677, these three criteria are not “watertight compartments” and the “strength of one may compensate for the weakness of another.”

[31] As I will explain, having undertaken this assessment, I am not satisfied that it is in the interests of justice to order a stay pending appeal.

(a) A Serious Issue to be Determined on Appeal

[32] Jamal J.A. recently described the pertinent inquiry in Furney, at para. 22:

The threshold to establish a serious question on the appeal is low. The court must make a preliminary assessment of the merits of the case and determine whether the issue on appeal is neither frivolous nor vexatious. [Citations omitted.]

[33] An appeal is “frivolous” when it is devoid of merit or with little prospect of success: Heidari v. Naghshbandi, 2020 ONCA 757, 153 O.R. (3d) 756, at para. 10. It is “vexatious” if “taken to annoy or embarrass the respondent or conducted in a vexatious manner, including an oblique motive for launching the appeal”: Heidari, at para. 10.

The appeal is neither frivolous nor vexatious

[34] In my view, this appeal is not frivolous. Sopinka J. made clear in Amchem Products Incorporated v. British Columbia (Workers’ Compensation Board), [1993] 1 S.C.R. 897, at p. 913, that there is a “fundamental difference” between a domestic court issuing an anti-suit injunction, which in effect determines matters for a foreign court, and a domestic court staying a proceeding before itself. The former raises issues of international comity, but the latter does not. The inquiries into the suitability of forum therefore differ.

[35] Most notably, in determining whether to grant an anti-suit injunction, the inquiry is based on the foreign court’s perspective. The domestic judge considering whether to issue an anti-suit injunction is to ask whether, applying Ontario’s principles of forum non conveniens, the court where the action sought to be restrained was commenced could reasonably have concluded there was no alternative forum that was “clearly more appropriate”. If the answer is yes, the decision of the foreign court to assume jurisdiction should not be interfered with: Amchem, at pp. 931-32.

[36] By contrast, in determining whether a domestic action should be stayed, the domestic court must determine for itself whether there is another forum that is “clearly more appropriate [than the domestic court] for disposing of the litigation and thus ensuring fairness to the parties and a more efficient process for resolving their dispute”. A stay is appropriate only if this is so: Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, at paras. 108-109.

[37] These inquiries can result in an anti-suit injunction being denied without the parallel domestic action being stayed, unlike the outcome arrived at by the motion judge. This will occur, for example, if both the domestic and foreign forums are equally appropriate. In such circumstances, a foreign court could reasonably conclude there is no alternative forum that is “clearly more appropriate”, thereby warranting denial of an anti-suit injunction. But a domestic court would not necessarily stay the parallel domestic action since the domestic court would be equally appropriate; in other words, the foreign forum would not be “clearly more appropriate”.

[38] The moving parties have identified features of the decision under appeal that lend some support to the suggestion that the motion judge may have erroneously elided the two tests. Therefore, the appeal is not frivolous.

[39] Nor am I persuaded that the appeal was launched to annoy or embarrass the respondents or that it is being conducted in a vexatious manner. I am not prepared to find on the record before me that this appeal was brought with an oblique motive, for instance to delay or frustrate the enforcement of the Guarantees, which would be improper.

The seriousness of the issue in this case does not overcome weaknesses in the other RJR-MacDonald factors

[40] During oral submissions before me, the moving parties placed great emphasis on the strength of their appeal. They suggested the case law appears to reflect the proposition that stays pending appeal tend to be granted where the strength of the appeal to be determined exceeds the low threshold of a “serious question”.

[41] I do not want to be taken as endorsing this as a principled basis for resolving stay pending appeal motions. I will say, however, that where a preliminary assessment of the merits of the appeal shows it to be strong, this is a proper consideration in deciding whether to grant the stay, given the repeated recognition in this court that the strength of one RJR-MacDonald factor may compensate for the weakness of others.

[42] Based on their submissions before me, I understand the moving parties to be emphasizing the strength of their appeal in support of this stay motion. However, in my view, this is not a case where the strength of the appeal compensates for the weakness in the other factors that I identify below.

[43] First, a key feature of the moving parties’ argument on appeal is the claim that the motion judge failed to undertake a proper forum non conveniens analysis as set out in the “leading case” of Van Breda. However, the Underlying Action that is the subject of the appeal advances claims which are fundamentally contractual in nature. In Van Breda, Lebel J. repeatedly confined the principles he developed to the assumption of jurisdiction in tort actions: Van Breda, at paras. 68, 80 and 85.

[44] Recently, in Forbes Energy Group Inc. v. Parsian Energy Rad Gas, 2019 ONCA 372, 93 B.L.R. (5th) 169, at paras. 7-8, in resolving a forum non conveniens issue in a contract case, this court applied the factors Laskin J.A. identified in a pre-Van Breda contractual decision called Young v. Tyco International of Canada Ltd., 2008 ONCA 709, 300 D.L.R. (4th) 384, at para. 26.

[45] I am not suggesting that general guidance cannot be taken from the Van Breda principles in resolving forum non conveniens issues in contract cases. That is commonly done: see e.g., Patterson v. EM Technologies, Inc, 2013 ONSC 5849, at para. 17; Wilson c. Fernand Campeau & Fils Inc., 2020 ONCA 384, at paras. 9-12; Osman v. Markplan Inc., 2018 ABCA 215, [2018] A.W.L.D. 2510, at para. 8. The point is that the absence of an express reference by the motion judge to the Van Breda decision may not have the stark significance the moving parties ascribe to it, and an appeal panel may ultimately be persuaded that in the course of her decision, in substance, the motion judge consulted the correct considerations.

[46] Second, forum selection clauses, namely those in the Guarantees assigned to TAP through the Forbearance Agreement, and in agreements relating to the GEM and Hangji Security, specifically authorized TAP to commence actions outside of Ontario. Relying on the decisions in Douez v. Facebook, Inc., 2017 SCC 33, [2017] 1 S.C.R. 751 and ECS Educational Consulting Services Canada Ltd. v. Al Nahyan (2000), 44 C.P.C. (4th) 111, the motion judge concluded that the moving parties should be held to those forum selection clauses. The forum selection clauses stand as a material impediment to the moving parties’ claim that the motion judge erred in permanently staying the Underlying Action.

[47] I have considered the counterarguments the moving parties made before me. Nevertheless, on a preliminary examination, I do not find those arguments sustain the view that the serious issue criterion is strong enough to overcome any weaknesses there may be in the other RJR-MacDonald factors.

(b) Irreparable Harm

[48] The moving parties urge that the failure to grant a stay pending appeal will cause them irreparable harm by: (i) creating a litigation disadvantage; (ii) putting them at risk of insolvency; and (iii) prejudicing them in the Singapore and UAE Actions by leaving in place the factual findings made by the motion judge pending appeal.

[49] As I will explain, I do not accept any of these arguments.

(i) A litigation disadvantage has not been established

[50] The moving parties submit a litigation disadvantage will occur if a stay pending appeal is not ordered while the Singapore and UAE Actions proceed. If decisions are rendered by the Asian courts, the moving parties point out that the Underlying Action will be rendered moot. They will thereby lose the opportunity to have the merits of the decision determined in Ontario and they will be forced to litigate in multiple jurisdictions.

[51] One problem with this submission is that there is no legal order in place preventing the responding parties from moving forward with the Singapore Action or the UAE Action. That will not change, whether I grant the stay or not. However, based on their submissions, the parties appear to agree that if I order a stay pending appeal, it may delay the responding parties’ foreign enforcement efforts pending the Ontario appeal. I will therefore proceed on that basis. Even so, I do not accept that the loss of litigation advantage alleged by the moving parties constitutes irreparable harm.

[52] It is important to appreciate that the moving parties have no right to have the matters in dispute litigated only in Ontario. Their request for an anti-suit injunction failed; they have not appealed that decision.

[53] Nor do the moving parties have any legal or normative claim of right to have the issues disposed of in Ontario before the Singapore or UAE Actions are resolved. The Singapore Action preceded the Underlying Action. The responding parties had already given notice that the UAE Action would be commenced before they were served with the moving parties’ statement of claim in the Underlying Action. The moving parties can have no reasonable expectation that the Ontario proceedings should take precedence.

[54] Moreover, even if the moving parties’ appeal succeeds in showing the Underlying Action in Ontario should not have been permanently stayed, the risk remains that matters will be resolved by the Singapore Action and/or the UAE Action before any decision on the merits in Ontario. As the moving parties pointed out in argument, citing Amchem, at p. 914, where no one forum is clearly more appropriate than another and parallel litigation occurs, it is anticipated and acceptable that the first decision rendered will resolve the matter.

[55] Nor do I have any basis on which to conclude that the quality of equity or justice will be compromised if the matters in issue are determined in the Singapore or UAE Actions, rather than in Ontario. There is no evidence before me to suggest the moving parties will be unable to raise their position that TAP has already been paid as a defence in those Actions, or that the foreign proceedings will otherwise be unfair. It is therefore difficult to accept that irreparable harm arises from the risk that the Singapore Action and/or the UAE Action could proceed before this appeal.

[56] I turn now to the moving parties’ objection to being required to litigate in multiple jurisdictions. In my view, there is weight to the responding parties’ position and the motion judge’s observation that the moving parties have themselves compounded the multiplicity of proceedings by initiating the Underlying Action in Ontario. The moving parties’ objection does not resonate with me given that they are asking this court in their appeal to re-add the Underlying Action to the ongoing litigation mix.

[57] Accordingly, I can find no irreparable harm arising from any litigation disadvantage if the stay pending appeal is refused.

(ii) The risk of insolvency is not supported by the evidence

[58] I agree with the responding parties that the moving parties did not adequately explain how my refusal to stay the motion judge’s permanent stay of the Underlying Action pending appeal could threaten their solvency. There is no evidence to support a finding that the litigation costs could cripple them if the motion judge’s stay is not lifted pending appeal, if that indeed is their concern.

[59] In his affidavit filed in support of this motion, Mr. Gupta appears to suggest that the spectre of insolvency arises in part from the risk that his assets will be exposed to attachment orders in the UAE. That outcome depends on the responding parties successfully prosecuting the UAE Action on the merits. On the evidence before me, I cannot find irreparable harm based on the financial implications of presumptively fair legal determinations made in other jurisdictions.

[60] In any event, even if the moving parties had established a basis on which to conclude that they could be put at risk of insolvency if a stay pending appeal is not ordered, this consideration would cut both ways. The responding parties could rely on the moving parties’ risk of insolvency to argue that the balance of convenience favours denying the stay, since any knock-on delay in enforcement in Asia could compromise the responding parties’ ability to recover funds from parties in supposedly dire financial straits.

(iii) The findings made by the motion judge will not cause irreparable harm

[61] In addition, the moving parties rely on findings made by the motion judge which they say amount to summary judgment against them undermining their position regarding the alleged Triton payments and the GEM and Hangji Security. They say these findings will irreparably prejudice them in the Asian proceedings if a stay pending appeal is not granted. I am not persuaded that these or any other findings made by the motion judge would cause irreparable harm if her decision is not stayed pending appeal.

[62] First, I do not read the motion judge as having made any findings against the moving parties’ contention that TAP was already paid for the debts it is attempting to enforce in Singapore and the UAE.

[63] The impugned passages must be read in context. When she made those findings, the motion judge was addressing the moving parties’ submission that the litigation is presumptively linked to Ontario because TAP’s claim against UDTG arose from the Rutmet Loan Agreement, making Rutmet the material debtor. In my view, the motion judge was doing no more than rejecting this argument by noting that the outstanding material issue in the litigation is “whether certain debts have been paid and the collateral validly enforced” under the UIL Loan Agreements. Her point was that the UIL Loan Agreements cannot be conflated with the Rutmet Loan Agreement for the purpose of identifying the appropriate forum for the litigation. As the motion judge noted earlier in summarizing the arguments of the parties, neither the UIL Loan Agreements, nor the alleged transactions with Triton that led to TAP’s alleged repayment under the Rutmet Loan Agreement, are linked to Ontario. Hence her finding that the moving parties failed to demonstrate a presumptive connecting factor to Ontario.

[64] Moreover, even if the motion judge’s factual findings do somehow lend support to arguments the responding parties will advance in the Singapore Action and/or the UAE Action, the moving parties cannot be heard to complain. They initiated the Anti-Suit Motion and, in doing so, advanced factual claims to support their position. The findings the motion judge made were in large measure responsive to those claims. A party’s decision to voluntarily assume litigation risk does not qualify as irreparable harm: M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, 51 C.P.C. (8th) 253, at paras. 39-40. Put simply the moving parties created the risk of the outcome they now seek to identify as irremediable harm.

[65] Accordingly, I am not persuaded that the moving parties would suffer irreparable harm if a stay pending appeal is denied.

(c) The Balance of Convenience

[66] I have already addressed the potential harm the moving parties rely upon. I have found none that would be irreparable.

[67] I accept the moving parties’ representations that they took steps to ameliorate potential harm to the responding parties flowing from a stay, such as agreeing to post security for costs and moving to expedite the appeal.

[68] However, these initiatives do not account for the most material inconvenience a stay would visit on the responding parties. Both the Singapore Action and the UAE Action have already been delayed for many months. As noted, granting the stay would likely cause further delay. Delay works against the responding parties’ financial interests. As I have indicated, there is no basis before me on which to apprehend that the respective foreign courts will proceed unfairly in adjudicating the Singapore and UAE Actions.

[69] In my view, the balance of convenience favours the responding parties.

(d) Other Considerations

[70] The moving parties also argued before me that the responding parties attorned to the jurisdiction of Ontario by initiating the Receivership Application and the EDC Application in Ontario, and by serving a notice of motion for security for costs of this appeal. I am not persuaded that attornment considerations play any role in this motion for a stay pending appeal.

[71] The moving parties did not have standing in the Receivership Application or the EDC Application, and both proceedings were brought against parties carrying on business in Ontario. I fail to see how TAP’s decision to institute those proceedings can fairly be interpreted as an attornment to Ontario in the Underlying Action, which was predicated upon offshore agreements and transactions involving foreign corporations.

[72] Nor does the responding parties’ decision to bring a security for costs motion in this appeal assist the moving parties. Attornment occurs where a party takes steps suggesting they have accepted jurisdiction, which typically are “steps to defend the merits of a proceeding”: Gerard J. Kennedy, “Jurisdiction Motions and Access to Justice: An Ontario Tale” (2018) 55 Osgoode Hall L.J. 79, at p. 103. Attornment does not occur where a party merely contests the jurisdiction of the court: Lilydale Cooperative Ltd. v. Meyn Canada Inc., 2019 ONCA 761, 439 D.L.R. (4th) 385, at para. 52. Nor does it occur where a party takes procedural steps that deal solely with the procedural mechanics of the jurisdiction hearing: Fraser v. 4358376 Canada Inc., 2014 ONCA 553, 324 O.A.C. 68, at para. 15.

[73] In my view, the responding parties’ motion for security for costs in this jurisdiction appeal is a procedural step related to the resolution of the jurisdictional dispute the appeal addresses. It cannot be taken as an act of attornment.

[74] The decisions relied upon by the moving parties do not hold otherwise. In T Films S.A. v. Cinemavault Releasing International Inc., 2014 ONSC 4138, the motion by the respondents for security for costs constituted attornment because it related to the costs of the underlying proceeding.

[75] Nor is there help to be found in the endorsement in 1092072 Ontario Inc. (Elfe Juvenile Products) v. GCan Insurance Co.. McWatt J.’s obiter dictum observation, at para. 15, that a security for costs motion would be an act of attornment concerned a hypothetical motion related to the substantive underlying action. Indeed, McWatt J. later held, at para. 18, that a party who “disputes jurisdiction” without engaging in the “merits” of the case will not generally be found to attorn.

(e) Conclusion on the Stay Motion

[76] It is not in the interests of justice to stay pending appeal the motion judge’s order to permanently stay the Underlying Action. I am not persuaded that the moving parties will be irrevocably harmed if the requested stay pending appeal is denied, and I am persuaded that the balance of convenience favours the responding parties. Although the issues to be adjudicated on the appeal are not frivolous or vexatious, the grounds of appeal are not so strong as to compensate for the weaknesses I have identified in the other RJR-MacDonald factors.

[77] I would therefore deny the motion for a stay pending appeal.

2. The Motion to Expedite the Appeal

[78] Appeals of this kind are to be expedited only where the motion judge is satisfied the urgency of the matter requires an earlier hearing date: “Practice Direction Concerning Civil Appeals at the Court of Appeal for Ontario”, (March 1, 2017), at 12.1(4).

[79] I see no urgency in having this appeal heard. The moving parties’ request for an expedited appeal was presented, at least in part, as a concession to reduce the harm a stay pending appeal would cause to the responding parties. No stay pending appeal is being ordered, and the responding parties oppose expedition.

[80] I would therefore deny the request to expedite the appeal.

Disposition

[81] The motion for a stay pending appeal is dismissed, as is the motion for an expedited appeal.

[82] As agreed by the parties, costs in this motion are set at $10,000, inclusive of HST and disbursements, to be allocated by the panel hearing the appeal.

“David M. Paciocco J.A.”