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A perceived risk of foreign corruption prosecution does not absolve a party from paying a legitimate contractual debt.
The appellant, Best Theratronics Ltd. (BTL), appealed a trial judgment ordering it to pay an outstanding debt to Kirloskar Technologies (P) Ltd. (KTPL), its former agent in India.
BTL argued it should be relieved of the debt due to a perceived risk of prosecution under the Corruption of Foreign Public Officials Act (CFPOA) related to alleged corrupt practices by KTPL in India, and sought to delay payment.
The Court of Appeal dismissed the appeal, upholding the trial judge's finding that the alleged criminal conduct was unrelated to the debt at issue and that BTL failed to provide sufficient evidence to support its public policy argument against enforcing the contract.
The court reiterated that public policy considerations for setting aside contractual provisions should be applied sparingly.
Judgment granted for unpaid commissions; email from collections specialist constituted acknowledgment of debt under Limitations Act.
The plaintiff brought an action for unpaid commissions owed by the defendant for the sale of medical equipment in India and Nepal.
The defendant raised three defences: that part of the claim was statute-barred, that it was entitled to a set-off for breach of contract, and that paying the debt risked prosecution under the Corruption of Foreign Public Officials Act due to unproven charges in India.
The court rejected all defences, finding that the defendant had acknowledged the debt via email, that no liquidated sums were owed for a set-off, and that the foreign criminal charges were irrelevant.
Judgment was granted in favour of the plaintiff for the full amount claimed.
Action stayed due to foreign forum selection clause, but domestic injunction against bank extended.
The Republic of Korea (South Korea) moved to dismiss Best Theratronics Ltd.'s breach of contract action and set aside an injunction preventing The ICICI Bank of Canada from disbursing funds under a Standby Letter of Credit (SBLC).
Best Theratronics Ltd. cross-moved to extend the injunction.
The court found that a forum selection clause in the contract granted exclusive jurisdiction to South Korean courts for the main action between Best and South Korea, leading to a stay of those proceedings in Ontario.
However, the court extended the temporary injunction against The ICICI Bank of Canada, noting that the SBLC was governed by Ontario law and the Bank was not bound by the forum selection clause.
The injunction was continued on terms to allow Best to pursue remedies in South Korea, with provisions for its eventual termination.
