COURT FILE NO.: CV-20-00645507-00CL DATE: 20210317

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 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

AND:

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

BEFORE: C. Gilmore, J.

COUNSEL: David G. Boghosian and George Pakozdi, Counsel for the Plaintiffs George J. Pollack and Chenyang Li, Counsel, for the Defendants TAP Private Capital Limited and TA Private Capital Security Agent Ltd. Rahul Shastri, Counsel for the Defendant Rutmet Inc. Jamie Macdonald and Erika Woolgar, Counsel for the Defendant Export Development Canada.

HEARD: January 19, 2021

ENDORSEMENT

Overview

[1] The Plaintiffs (referred to collectively herein as “UDG”) bring an anti-suit injunction to enjoin proceedings against the Plaintiff Prateek Gupta (“Mr. Gupta”) in Dubai and United Arab Emirates (“UAE”), and against the Plaintiff UD Trading Group Holding PTE. Limited (“UDTG”) in Singapore. The proceedings are in respect of a debt which the Defendants TAP Private Capital Limited and TA Private Capital Security Agent Ltd. (“the TAP Defendants” or “TAP”) allege is outstanding.

[2] UDG seeks the injunction on the grounds that the debt has been satisfied and that there is no basis on which to enforce the subject guarantees. UDG seeks to resolve this issue with TAP in Ontario, which UDG says is the natural forum for the litigation. UDG claims that TAP is taking advantage of the financial difficulties facing the Plaintiffs and is attempting to enforce the guarantees on a piecemeal basis in different jurisdictions.

[3] TAP’s position is that the injunction motion must fail because UDG is attempting to enjoin proceedings commenced against it in jurisdictions in which it is resident, and fails the tests set out by the Supreme Court of Canada (“SCC”) in Amchem [1] and RJR-MacDonald. [2]

[4] On its cross-motion, TAP seeks to dismiss or stay the underlying proceeding for lack of jurisdiction or on the basis of forum non conveniens or forum selection clauses in agreements which expressly permits TAP to commence proceedings in the British Virgin Island (“BVI”), Hong Kong, Singapore or the forum of its choice.

[5] I find that UDG has not met the test for a permanent anti-suit injunction as set out in Amchem. As will be set out below, I find that UDG has commenced the within action to bolster its argument that Ontario is the most convenient forum when the facts reveal the contrary. Its action in Ontario should be stayed.

Background Facts

[6] UDG is a metal trader. The Plaintiff entities may be described as follows:

a. UDTG is incorporated pursuant to the laws of Singapore, with its head office in Singapore. UDTG is the parent company of UIL Singapore, UIL Malaysia, and UIL Commodities. It has operations in Asia and the Middle East and has offices in Dubai.

b. UIL Singapore is incorporated pursuant to the laws of Singapore, with operations based in Singapore. Its offices, employees, and business records are also located in Singapore.

c. UIL Malaysia is incorporated pursuant to the laws of Malaysia with operations based in Malaysia. Its offices, employees, and business records are also located in Malaysia.

d. UIL Commodities is incorporated pursuant to the laws of Dubai, with operations in the Middle East. Its head offices, employees, and business records are located in Dubai.

e. Vadox is incorporated pursuant the laws of the British Virgin Islands (“BVI”), with offices in the BVI. It has no active operations.

f. Mr. Gupta is a resident of Dubai. He has resided in Dubai since approximately 2014. Mr. Gupta is also a director of UDTG and the sole shareholder of Prime Limited – the holding company for UDTG.

[7] TAP carries on business as a lender specializing in short-term trade financing, mid-term supply chain financing, mid to long-term loans and project financing. Among other things, TAP provides receivables financing to companies that trade in copper and other raw metal products. TAP Private Capital Limited is incorporated pursuant to the laws of Hong Kong. TA Private Capital Security Agent Ltd. is incorporated pursuant to the laws of the BVI.

[8] TAP has its head office in Hong Kong and offices in Singapore. It does not carry on business or have any employees in Ontario or Canada. TAP’s funding operations are regulated by the Securities and Futures Commission of Hong Kong and the Monetary Authority of Singapore.

[9] Rutmet Inc. (“Rutmet”) is incorporated pursuant to the laws of Ontario and has offices in Ontario. Rutmet purchases metal and metal products for sale to third party buyers.

[10] Export Development Canada (“EDC”) is a Canadian Crown corporation and has offices in Canada.

The Underlying Action and the Singapore and UAE Action

[11] In July 2020, TAP commenced an action in Singapore claiming $63,303,806 USD owing on outstanding UIL receivables. Rutmet is a named Plaintiff in that action as TAP commenced the action on behalf of Rutmet pursuant to a Power of Attorney, General Security Agreement and Security Deed executed by Rutmet. UDTG is the sole Defendant in that action.

[12] In the Singapore action, TAP seeks to enforce the Corporate Guarantee for the UIL receivables. In August 2020, UDTG sought and was granted a stay of the Singapore action on the basis that Singapore is forum non conveniens.

[13] Mr. Gupta was served with a “Final Demand” in the UAE courts for $30M USD pursuant to the Personal Guarantee. The demand was made by TAP but on behalf of Rutmet through the Power of Attorney.

[14] The UIL Loan Agreements stipulate that the lender (TAP) may take proceedings against the Borrower in any court of competent jurisdiction.

[15] In the underlying action, UDG claims that after setting off security enforcement of the UIL receivables by TAP, there is no further obligation which would permit TAP to enforce on its personal and corporate guarantees. The dispute between the parties (“the dispute”) is whether the obligations of the underlying receivables and the guarantees have been satisfied.

[16] UDG’s position is that it has pledged certain collateral as security for loans made by TAP to Rutmet for the funding of metal purchases under a loan facility between TAP and Rutmet dated May 24, 2019 (“the Rutmet Loan Agreement”). This was a factoring agreement under which Rutmet was paid an amount for its receivables by TAP, prior to the receivables coming due. TAP then collected the receivables directly from the buyers and was paid fees and interest as well.

[17] TAP also provided a factoring facility to UIL Singapore and UIL Malaysia similar to the factoring arrangement between TAP and Rutmet.

[18] Collateral for the UIL Loan Agreements (not the Rutmet Loan Agreement) was granted as additional security. The collateral is made up of 2,035,500 shares of Hangji Global Limited (“Hangji”), a company incorporated under the laws of and located in BVI, and 100% of the shares of Gympie Eldorado Mining (“GEM”), a company incorporated under the laws of and located in Australia (together “the collateral”). There is a dispute as to the value of the collateral pledged.

[19] By way of additional collateral for the Rutmet Loan, UDG granted an unlimited corporate guarantee in favour of Rutmet and a limited personal guarantee from Mr. Gupta in the amount of $30M USD. The guarantees will be more fully explored below.

[20] UDG alleges that TAP has inappropriately seized the collateral referred to above that was for loans made by TAP to Rutmet pursuant to the Rutmet Loan Agreement. TAP’s position is that the collateral was pledged for loans made by TAP to UIL Malaysia under an agreement dated August 8, 2018 (“the UIL Malaysia Agreement”) and to UIL Singapore under an agreement dated October 3, 2018 (“the UIL Singapore Agreement, together the “UIL Loan Agreements”).

[21] The UIL Loan Agreements were novated by novation agreements dated August 27, 2019 and September 9, 2019 to Triton Metallics Pte. Ltd. (“Triton”), thereby replacing UIL Singapore and UIL Malaysia as the borrower under the UIL Loan Agreements. Triton is a Singapore corporation. The novation agreements resulted in the receivables owing to UDG from metal sales funded by TAP pursuant to the UIL Loan Agreements being assigned to Triton. However, the underlying collateral continued to secure the debts under the UIL Loan Agreements.

[22] Triton is a Singapore company whose sole shareholder and director is Chourasia Uday. After novation, control of Triton was acquired by Hargreaves International Limited (“Hargreaves”) from Mr. Uday. Hargreaves is a BVI company controlled by Mr. Intorn Kam. Mr. Kam resides in Singapore.

[23] UDG alleges that it has already paid the receivables to Triton. It relies on certain settlement invoices attached as Exhibit “AA” to the affidavit of Mr. Gupta. UDG alleges that TAP via Triton has in fact collected $9,917,399 USD more than it was actually owed. UDG submits that customers of UIL subsidiaries made payments-in-kind to Triton such that the loan facility was entirely paid.

[24] TAP disputes that the invoices were paid and questions the authenticity of the settlement agreements. TAP submits that despite being prepared by parties located in India, UAE, Hong Kong and Singapore, each of the invoices has misspelled the word “settlement” as “SETTELEMENT.”

[25] UDG’s position is that Triton and TAP are non-arm’s length entities and payment of Triton’s receivables is also satisfaction of the debts owing under the UIL Agreements. TAP’s position is that it has not recovered any of the indebtedness owed by Triton under the UIL Loan Agreements notwithstanding the security that was given. The GEM shares are not profitable, and its assets are under an Environmental Protection Order subject to investigation by the Government of Queensland, Australia. The Hangji shares are listed on a secondary stock exchange and have no material value.

[26] UDG submits that even after TAP (via Triton) had been paid in excess of what it was owed, it took steps to realize on the GEM and Gympie security. UDG alleges that in doing so, TAP realized a windfall of $65M USD. Further, TAP took steps to enforce the collateral in bad faith knowing there were no amounts outstanding on the UIL loan facility, that loan having been settled directly with Triton.

[27] TAP’s position is that Triton, Hargreaves and TAP are not affiliated corporations and that the debts owing under the Rutmet Loan Agreement and the UIL Loan Agreements remain outstanding.

The Rutmet Loan and EDC

[28] Rutmet supplied metal to the UIL subsidiaries under certain trade contracts which were insured by EDC. Rutmet is indebted to TAP pursuant to several loan agreements. Money was advanced to Rutmet by TAP to buy metal products.

[29] The trading arrangement was covered under an insurance policy to Rutmet issued by EDC, which provided insurance for accounts receivable owing to Rutmet by the UIL subsidiaries. The guarantees permit assignment by the Vendor. TAP gave notice to Rutmet in October 2019 and January 2020 that it was assigning the guarantees to TAP as assignee. Rutmet provided TAP with a Power of Attorney which authorized TAP to submit an insurance claim to EDC for Rutmet’s unpaid receivables with a direction to pay TAP. EDC refused to pay out the claim without proof of Rutmet’s receivables.

[30] Rutmet and TAP had a factoring agreement whereby Rutmet was paid an amount for its receivables by TAP prior to the receivables coming due. TAP then collected the receivables directly from the buyers. The factoring facility provided to Rutmet was $60M USD by May 2019. This agreement, the Rutmet Loan Agreement, is governed by the laws of Hong Kong.

[31] In order to gain information in relation to Rutmet’s receivables, TAP commenced an Application on the Commercial List on February 13, 2020 to appoint a Receiver. Rutmet opposed the Application. However, the Application did not ultimately proceed as Rutmet agreed to provide the information sought by TAP. TAP subsequently abandoned the Receivership Application. UDG alleges that TAP abandoned the Receivership proceeding in order to improve its chances of succeeding in its defence of the anti-suit injunction.

[32] TAP has commenced a separate Application against EDC for a declaration regarding the interpretation of the insurance policy issued to Rutmet in July 2020. EDC appeared on this motion but took no position. TAP seeks to recover $60.9M USD on the policy.

[33] UTDG admits it has not paid Rutmet but alleges that TAP has realized on security pledged by UTDG in favour of TAP worth up to $65M, an amount which exceeds the debt to Rutmet. As such, UTDG commenced the within action on the Commercial List in Toronto in December 2020, claiming that it does not owe TAP anything and that in fact TAP owes UTDG $10.5M plus damages.

The Guarantees

[34] As indicated above and using the Power of Attorney from Rutmet, TAP has commenced proceedings to enforce the corporate guarantee against UDTG in Singapore on July 9, 2020 and issued a demand letter to enforce the personal guarantee against Mr. Gupta in Dubai on August 25, 2020.

[35] The relevant wording of the corporate and personal guarantees is set out below:

Corporate Guarantee:

a. The Guarantee shall be governed and construed in accordance with the laws of the Province of Ontario.

b. The Guarantor [(i.e., UDTG)] irrevocably agrees for the exclusive benefit of the Vendor [(i.e., Rutmet)] that the courts of Ontario at Toronto shall have exclusive jurisdiction in relation to any dispute and any suit [sic] action or proceeding (referred to in this Clause 18 as “Proceedings”) which may arise out of or in connection with this Guarantee and for such purposes irrevocably submits to the jurisdiction of the [sic] such courts.

c. Nothing in this Clause 18 shall affect the right of the Vendor to serve process in any manner permitted by law or limit the right of the Vendor to take Proceedings against the Guarantor in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings by the Vendor in any other jurisdiction, whether concurrently or not.

d. The Guarantor irrevocably waives any objection which it may now or hereafter have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any such court as is referred to in this Clause 12, and further irrevocably agrees that a judgment or order in any Proceeding brought in the Ontario courts shall be conclusive and binding upon the Guarantor and may be enforced without review in the courts of any other jurisdiction.

Personal Guarantee

The Guarantor [(i.e., Mr. Gupta)] agrees that any legal suit, action or proceeding arising out of or relating to this Guarantee may be instituted in the courts of the Province of Ontario at Toronto and the Guarantor hereby accepts and irrevocably submits to the jurisdiction of the said courts and acknowledges their competence and agrees to be bound by any judgment thereof, provided that nothing herein shall limit the Vendor’s [(i.e., Rutmet’s)] right to bring proceedings against the Guarantor elsewhere.

[36] UDG commenced an Application in Singapore on August 18, 2020 to stay TAP’s claim on the basis that Singapore is forum non conveniens. The stay Application has not been heard and no steps have been taken in Dubai due to UDG’s insistence that there be a standstill of all steps pending the hearing of this motion. UDG’s motion in Ontario was filed on September 3, 2020. TAP’s cross-motion for a dismissal or permanent stay of UDG’s claim in Ontario was brought on September 22, 2020.

[37] UDG’s position is that the debt owing to TAP has been satisfied and there is, therefore, no basis upon which to enforce the guarantees. Specifically, UDG argues that its customers have paid Triton in kind through “cargo-to-cargo” trading (a common way of satisfying debt in the commodities trading industry) and since Triton and TAP are affiliated, TAP has been repaid. In fact, Triton received over $65M USD in Settlement invoices in September and October 2019 which is more than what TAP claimed in its demand letter to Triton in December 2019.

[38] The proceedings in Asia and the UAE are at a pause and TAP is not taking any affirmative steps at this time given Justice Conway’s endorsement of September 16, 2020 which directs that “nothing is to occur in those foreign proceedings that will compromise the Plaintiffs’ rights pending the hearing and decision on the anti-suit injunction.”

The Positions of the Parties

[39] UDG argues that three of the five outstanding proceedings are in Ontario. If UDG is successful in proving that it does not owe TAP any money, the actions on the guarantees will be moot. It was TAP who chose to commence the Receivership Application and the action against EDC. Both of those actions are in Ontario, although UDG concedes that the Receivership Application was abandoned.

[40] The guarantees have forum selection clauses naming Ontario (one of which refers to Ontario as the “exclusive” jurisdiction) and both stipulate that they are to be governed by Ontario law. Since the witnesses are scattered across the globe, there is no disadvantage to TAP in having all matters heard in Ontario. Having the main dispute heard in Ontario will avoid a multiplicity of proceedings in different jurisdictions and avoid the risk of conflicting decisions.

[41] TAP’s position is that the proceedings underlying this motion and cross-motion have a minimal nexus with Ontario or Canada. Neither the Plaintiffs nor the primary Defendants are resident or carry on business in Canada. The enforcement of the personal guarantee is against Mr. Gupta who resides in Dubai. The enforcement of the corporate guarantees relates to UTDG which carries on business in Singapore.

[42] As well, there are forum selection clauses in agreements put in issue by UDG which direct the parties to litigate their disputes in BVI, Hong Kong or Singapore.

[43] TAP submits that the damages sought by UDG in the underlying proceeding relate to breaches of contracts between UDG and TAP, which concern assets outside of Canada. TAP’s dealings with Rutmet and EDC are entirely different contractual arrangements to which UDG is not a party.

The Issues

1. Should the Anti-Suit Injunction be Allowed?

a. The Amchem Test

[44] In Amchem, the SCC set out the test for an anti-suit injunction.

[45] The test sets out that an anti-suit injunction may be granted where:

a. The domestic court is the natural forum with the closest connection to the action and the parties. The domestic court must apply the principles of forum non conveniens to determine that a foreign court assuming jurisdiction could reasonably conclude that no other alternative forum is clearly more appropriate; and

b. The continuation or discontinuance of a foreign proceeding amounts to a serious injustice.

c. It is preferable that the party seeking the anti-suit injunction first seek a stay of the foreign proceeding. Specifically, the court in Amchem stated, at pp. 930-931:

Moreover, although the application is heard summarily and based on affidavit evidence, the order results in a permanent injunction which ordinarily is granted only after trial. In order to resort to this special remedy consonant with the principles of comity, it is preferable that the decision of the foreign court not be pre-empted until a proceeding has been launched in that court and the applicant for an injunction in the domestic court has sought from the foreign court a stay or other termination of the foreign proceedings and failed.

[46] TAP argues that UDG has not complied with the test in Amchem in that it has not pursued a stay of the litigation in either Dubai or Singapore. UDG argues that pursuing a stay is not a necessary prerequisite, and relies on Hudon v. Geos Language Corp. (1997), , 34 O.R. (3d) 14 (Div. Ct.), at paras 22-23 [Hudon] and Bell’O International LLC v. Flooring & Lumber Co., [2001] O.T.C. 362, at para 11 [Bell’O].

[47] In Hudon, the plaintiff was employed by the defendant in Japan as an English language teacher. During a vacation trip to China she suffered serious injuries in a car accident. When she returned to Toronto, she was still in a deep coma. The plaintiff commenced an action in Ontario against the defendant for $10M in general damages. Her employment contract and the subject insurance policy were governed by the law of Japan. The defendant brought an action in Japan for a declaration that it was not liable in tort or contract for any damages suffered by the plaintiff. The defendant also moved in Ontario for an order staying the action on the ground that Ontario was not a convenient forum. The plaintiff moved for and was granted an anti-suit injunction, but did not move to stay the Japanese action.

[48] The defendant appealed the injunction order. The Divisional Court dismissed the appeal on the grounds that Amchem did not stand for the proposition that proceeding with a stay in the foreign jurisdiction is not a condition precedent. The court did not, therefore, set aside the anti-suit injunction order granted by Ontario Court of Justice (General Division).

[49] While I agree with the interpretation of Amchem in Hudon, the defendant in that case commenced the Japan action and brought a stay motion in Ontario after the Ontario action had already been issued and served. Further, as TAP points out, and I agree, this is not a single Plaintiff with modest means. UDG is a large sophisticated multinational enterprise. Indeed, UDG has suspended the stay hearing in Singapore where it has business and offices.

[50] UDG also relies on Bell’O. In that case, the defendants moved to restrain the plaintiffs from proceeding with an action in New Jersey. The motion was brought after the plaintiffs had lost an injunction motion in Ontario and were denied an appeal by the Divisional Court. The injunction was granted to prevent the plaintiffs from suing in another jurisdiction after they had lost in Ontario. In this case, UDG asks the Court to grant an injunction in Ontario which it commenced after a foreign proceeding had been started. The facts are the opposite to the ones in Bell’O.

[51] The Plaintiffs also rely on RDX Technologies Corporation v. Appel, 2019 ABQB 477. In that case, partnership units in a biodiesel plant were sold to RDX by CWT pursuant to a Unit Purchase Agreement (“UPA”). RDX sued the CWT enterprises for breaches of the UPA. The UPA contained a provision that Alberta was the exclusive jurisdiction for any litigation arising from the UPA. CWT obtained a judgment in New York and commenced an application in Ontario to enforce that judgment.

[52] CWT then filed a stay application in the Alberta action claiming that New York was the more appropriate forum. RDX filed an anti-suit injunction. The issue of whether it should seek and be denied a stay in Ontario arose. A stay application in Ontario had been filed but not yet heard. The court found that this on its own was insufficient to deny a hearing of the anti-suit injunction. However, this case does not really assist the court either since the court determined that CWT had attorned to the jurisdiction of the Court of Queen’s Bench of Alberta through the res judicata application, the original Alberta action had never been heard and the court determined that the res judicata issue had to be heard before judgment enforcement proceedings could move forward.

[53] TAP relies on Hollinger International Inc. v. Hollinger Inc.. In that case the court held that a sophisticated commercial party is obliged to first seek a stay from the foreign court, before seeking an anti-suit injunction. In the case at bar, the stay motion in Singapore is pending. The stay motion in Dubai has never gone forward because of UDG’s position that it will not be successful. Specifically, UDG argues that the court in Dubai will reject any challenge to its jurisdiction and will not apply the principles of forum non conveniens because it will accept jurisdiction solely based on Mr. Gupta’s residence in Dubai. UDG submits this was confirmed by TAP’s expert in cross-examination.

[54] TAP’s expert, Mr. Zwairi testified in cross-examination that a UAE court would assume jurisdiction over the case even if the case was being litigated in Canada and even if there was a forum selection clause that specified a forum other than UAE. Mr. Zwairi’s view was that because Mr. Gupta was a resident of Dubai, the civil court in Dubai would most likely assume jurisdiction over the case, even given the abovementioned circumstances. [3]

[55] TAP argues that the anti-suit injunction should not be granted because UDG must first seek stays from Dubai and Singapore courts. Those courts must be given the opportunity to consider whether they are the most appropriate forum for the litigation relating to the Personal and Corporate Guarantees.

Analysis

[56] The fact that UDG has not pursued a stay in either Singapore or Dubai is not fatal to its injunction application as per a strict reading of Amchem and some supporting case law. The problem, however, is that without the pursuit of a stay there is no way to determine the second part of the test with respect to whether a foreign court could conclude that no other clearly more appropriate forum exists by applying principles similar to those in Ontario.

[57] TAP takes issue with UDG’s interpretation of its expert’s view on the applicable considerations under the UAE law with respect to whether it will assume jurisdiction over a matter. According to Mr. Zwairi’s report, a UAE civil court will assume jurisdiction on the basis of conditions articulated in Articles 20 and 21 of its Civil Procedure Code. Specifically, a UAE civil court will consider factors which include the residence and domicile of the defendant, the place of execution of the contract, and whether the proceeding concerns UAE family law and/or real property. [4] These are similar to the principles that an Ontario court would consider in applying the forum non conveniens test.

[58] While Mr. Zwairi opines that Mr. Gupta would be unsuccessful on a forum challenge in Dubai, it does not mean that the court in Dubai would not have considered principles similar to those in Ontario in refusing a stay application. I therefore do not agree with UDG that the court in Dubai will inevitably reject any challenge to its jurisdiction.

[59] I agree with the Defendants that this is a case where pursuing the stays in both Singapore and Dubai would be essential in determining the most convenient forum, particularly where the majority of witnesses and all business transactions took place in Asia. The facts in this case make it clear that the pursuit of a stay cannot simply be glossed over as “optional.”

[60] Further, since a permanent anti-suit injunction is sought, a determination in relation to the RJR-Macdonald test is not required. However, if I am wrong, I would have found that that test is not met as UDG has not demonstrated that it would suffer irreparable harm or that the balance of convenience favours such an injunction where the primary parties to the dispute reside and carry on business in Singapore and Dubai.

[61] I therefore find that, in this case, the Plaintiffs should have pursued their stay motions in order to meet the requirements under Amchem. Failure to do so leaves this court with no option but to focus solely on the forum on conveniens arguments.

b. Forum Non Conveniens

[62] In applying this part of the test, the court must determine whether a foreign court could reasonably conclude that no other more appropriate forum exists upon principles similar to those in Ontario.

[63] In examining whether Ontario is the most appropriate forum, a number of factors must be considered including the residency of the parties and location of witnesses, the applicable law, avoidance of a multiplicity of proceedings, and the ease of enforcing an eventual judgment.

[64] Both UTG and TAP are domiciled in Singapore and Mr. Gupta is domiciled in Dubai. Based on the issue of residency of the corporations and Mr. Gupta, Singapore and Dubai are clearly the more convenient forums.

[65] In terms of the location of witnesses, UDG seeks to call a large number of witnesses who are based primarily out of Dubai and Singapore. The issues related to whether or not Triton was paid by UDG customers is also a significant issue, which requires evidence from witnesses in the UAE, India, Hong Kong and Singapore. Triton is a Hong Kong based company.

[66] With respect to the applicable law, the collateral which UDG claims was improperly seized is governed by agreements that specify the laws of BVI, Hong Kong and Australia as the governing laws. TAP’s position is that the central dispute is whether debts have been paid and collateral validly executed on in accordance with foreign law.

[67] TAP further submits that UDG’s own theory of the case revolves around corporate transactions which occurred in Dubai and Singapore in relation to payments for commodities between Middle Eastern and South East Asian parties. Attempting to transplant the case to Ontario will deprive TAP of the advantage of having easy access to its witnesses, none of whom reside in Ontario.

[68] UDG takes a very different view on this part of the test. UDG submits that the guarantees sought to be enforced by TAP were given to Rutmet as security for funds owed by UDTG to Rutmet, not to TAP. Further TAP is seeking to pursue its claim through EDC, a Canadian Crown Corporation. The debtor in this case is Rutmet, an Ontario corporation. The debtor is not the Plaintiff.

[69] Further, UDG submits that TAP’s decision to commence proceedings in Ontario by way of the Receivership Application is clear evidence of an intention to submit or attorn to Ontario jurisdiction. The fact that TAP ultimately abandoned the Receivership Application should be given no weight by this Court as there remain two ongoing Ontario applications: TAP’s Application for payment from EDC under the Rutmet Loan Agreement and the Rutmet action which alleges that the Rutmet Loan Agreement has been fully satisfied and Rutmet is owed money by TAP.

[70] It is trite to say that commercial reality dictates that the same matters should not be litigated in different forums. [5] UDG complains that if TAP has its way, this matter will be litigated in Ontario (the EDC Application), Singapore and UAE. This would not only raise the spectre of inconsistent decisions but would put the Ontario court in a difficult position when it is time to decide both the Rutmet and the EDC litigation.

[71] TAP submits that the alleged multiplicity of proceedings has been manufactured by UDG by commencing litigation in Ontario rather than defending the UAE and Singapore actions.

[72] With respect to the enforcement of any eventual judgment, TAP is particularly concerned about the enforceability of a Canadian judgment in Dubai, if a Dubai court determines it had exclusive jurisdiction over the dispute.

[73] Given all of the above, I do not find that UDG has demonstrated a presumptive connecting factor for the following reasons:

a. None of the torts alleged by UDG were committed in Canada; The UIL Malaysia Loan Agreement is governed by the laws of Hong Kong and the UIL Singapore Loan Agreement is governed by the laws of Singapore.

b. None of the Plaintiffs reside in Ontario.

c. TAP is not resident in Ontario.

d. None of the contracts in dispute between UDG and TAP were made in Canada.

e. The security agreements governing the collateral were not entered into in Canada.

f. The Novation Agreements with Triton were entered into in Singapore and Dubai.

g. There is evidence (by way of Exhibits “P” and “Q” to Mr. Sullivan’s affidavit sworn September 21, 2020) that Hargreaves and Triton are separate and independent entities from TAP. Neither Hargreaves nor Triton are Ontario corporations.

h. The Rutmet loan is a different matter to which UDG is not a party. The security for the Rutmet loan is the receivables owed to Rutmet by the UIL Buyers. The UIL Loan Agreements are entirely different and are secured by Hangji and GEM shares. The two debts involved different borrowers and are secured by different assets. The Plaintiff seeks to conflate these unrelated debts.

i. There is evidence that the debt under the UIL Agreements remain outstanding as the Plaintiff has only produced a spreadsheet of alleged payments (Exhibit “AA” to Mr. Gupta’s affidavit with the “Settelement” invoices which remain in dispute) with no actual proof of payment. The essential nature of the dispute is not whether the guarantees are enforceable in Ontario, but rather whether certain debts have been paid and the collateral validly enforced.

j. Rutmet assigned the guarantees to TAP pursuant to the Rutmet Loan Agreement. This permits TAP to take proceedings against the Guarantors. As will be discussed below, the forum selection clauses permit TAP to pursue such proceedings in jurisdictions other than Ontario, if it so chooses.

k. The now abandoned Receivership Application cannot be used to claim that the Defendants have attorned to Ontario jurisdiction. That Application was commenced to obtain information about Rutmet so that TAP could commence its claim to collect on the insured receivables. Once it had that information, there was no reason to continue the Receivership. As I found above, the Rutmet loan is a different loan from the one on which TAP is suing in Singapore and Dubai.

l. TAP’s Application in relation to EDC seeks judicial interpretation of the Policy to determine coverage claimed by TAP in relation to the Rutmet Loan Agreement. EDC has refused to pay TAP’s claim on the basis that there is a dispute in relation to the receivables owing. The commencement of an Application in Ontario for an interpretation of an insurance policy related to a different loan cannot be sufficient for UDG to claim a presumptive connecting factor to Ontario.

m. UDG alleges that TAP has improperly seized the Collateral which is sufficient to extinguish Rutmet’s debt to TAP. However, none of the agreements governing the collateral have any relationship to Canada and, in fact, stipulate that disputes related to the collateral are to be resolved in BVI, Australia and Hong Kong.

n. As per Haaretz.com v. Goldhar, 2018 SCC 28, [2018] 2 S.C.R. 3, at para 63, it is the Plaintiffs’ burden to establish that all of the witnesses who reside outside of Ontario would be compellable witnesses in Ontario and that the witnesses could be compelled to testify by videoconference. No expert evidence on this important issue was led by the Plaintiffs given that almost all witnesses reside outside of Canada. Further, a failure to have the ability to compel witnesses to give evidence in Ontario would put the Defendants at a distinct disadvantage in terms of the fairness of the proceedings.

c. Forum Selection Clauses

[74] The Personal and Corporate Guarantee contain forum selection clauses. With respect to the Corporate Guarantee, the forum selection clauses are contained in paragraph 18 (reproduced above). While paragraph 18.2 stipulates that Ontario at Toronto shall have exclusive jurisdiction in relation to any dispute in connection with the guarantee, paragraph 18.3 does not prevent TAP, as the Vendor by POA, from taking proceedings “in any other court of competent jurisdiction…whether concurrently or not.”

[75] The Personal Guarantee stipulates that Mr. Gupta agrees that any action related to the Personal Guarantee may be instituted in Ontario but does not prevent TAP as the Vendor by POA to bring proceedings against Mr. Gupta elsewhere.

[76] In addition, the Agreements that govern the collateral given by GEM and Hangji have specific forum selection clauses. The GEM Intercreditor Agreement requires that Hong Kong has the exclusive jurisdiction over any dispute or a finance party (i.e. TAP) has the option to take concurrent proceedings in other jurisdictions (clause 20.1 and 20.1.2).

[77] Similarly, Hangji Intercreditor Agreement stipulates that BVI has exclusion jurisdiction over any disputes under the Agreement but that a Finance Party (i.e. TAP) may take concurrent proceedings in other jurisdictions (clause 19.1 and 19.1.2).

[78] TAP submits that UDG’s claims arise out of the Security Documents and as such they are obliged to bring any disputes in the courts of Hong Kong or BVI in relation to the enforcement of the collateral. Only a “financing party” such as TAP has the right to select another forum.

[79] As set out by Nordheimer, J. in ECS Educational Consulting Services Canada Ltd. v. Al Nahyan, [2000] O.J. No. 211 at para 51:

…it seems to me of some considerable importance to the determination of this issue that the plaintiff entered into agreements where it expressly agreed to submit disputes to the courts of UAE. In this age of the ‘global economy’, businesses will increasingly be faced with the prospect of dealing with different judicial systems in different parts of the world….I also assume that business people assess those different judicial systems before agreeing to attorn to their jurisdiction or that they are prepared to take the risks, if such be the case, of so doing.

[80] In Douez v. Facebook Inc., 2017 SCC 33, [2017] 1 SCR 751, the SCC set out the two-part test for enforcement of a forum selection clause. First, the party seeking to enforce the clause must establish that the clause is valid, clear and enforceable and that it applies to the cause of action before the court: at para. 28. Once that is done, the onus shifts to the Plaintiff who must show why the court should not enforce the forum selection clause: at para. 29. The court went on to make two important statements about forum selection clauses. First, that sophisticated parties are deemed to have informed themselves of the risks of foreign legal systems and accepted those risks in agreeing to a forum selection clause and second, that forum selection clauses are generally encouraged because they provide international commercial relations with stability and foreseeability: at para. 31.

[81] In terms of enforcement of the GEM and Hangji Collateral, it is clear that those documents have specific forum selection clauses. UDG is a sophisticated party who is deemed to have assessed the risks of disputes about the collateral being adjudicated in Hong Kong, BVI or another forum of the TAP’s choice.

[82] With respect to the guarantees, TAP, as the Vendor by way of assignment of the guarantees, is not obligated to enforce them in Ontario. The Vendor may choose the forum. I agree with Justice Nordheimer in ECS Consulting, at para. 51, when he said that a failure to enforce forum selection clauses would send the wrong message and allow Canadian businesses to resile from agreements after the fact.

[83] Given all of the above, I find that the forum selection clauses are clear and unambiguous, and permit TAP as the Vendor or assignee to choose the forum in relation to litigation arising under the relevant agreements or guarantees. I agree with the Defendants that the within action is a step taken by the Plaintiffs to attempt to gain a jurisdictional advantage where none exists.

Summary

[84] In summary, I do not find that the Plaintiffs have met the required tests and its request for an anti-suit injunction is denied. Further, its Ontario action must be permanently stayed to avoid a multiplicity of proceedings. The Plaintiffs should proceed to file their defences in Singapore and Dubai to allow those actions to move forward.

[85] This Order does not affect the ongoing Application involving EDC. This Court views that as a separate matter. If the Defendants are able to collect sufficient amounts to satisfy the Rutmet loan, the insurance claim may ultimately be withdrawn. Alternatively, if they are unable to collect, that matter can proceed as a separate piece of litigation without any risk of inconsistent results.

Orders and Costs

[86] The Plaintiffs’ motion is denied. The Defendants’ motion for a permanent stay of the within action is allowed.

[87] If the parties cannot agree on costs, I will receive written submissions of no more than 5 pages, exclusive of any Bill of Costs or Offer to Settle. Costs are due on a seven-day turnaround starting with the Defendants, seven days after the release of this Endorsement. If no costs are received after 35 days, costs will be deemed to be settled. Costs are to be sent by email directly to my assistant at therese.navrotski@ontario.ca

C. Gilmore, J. Date: March 17, 2021

[1] Amchem Products Inc. v. British Columbia (Workers’ Compensation Board), , [1993] 1 S.C.R. 897 [Amchem].

[2] RJR-MacDonald Inc. v. Canada (Attorney General), , [1994] 1 S.C.R. 311 [RJR-MacDonald].

[3] Cross-examination of Mr. Abdelmajeed Al Zwairi, October 15, 2020, questions 30-34.

[4] Expert Report of Abdelmajeed Al Zwairi dated September 22, 2020, at para. 5.25.

[5] Quickie Convenience Stores Corp. v. Parkland Fuel Corporation, 2020 ONCA 453, at para 32.