Court File and Parties
Court File No.: CV-21-00659190-00CL Date: 20220422 Superior Court of Justice – Ontario Commercial List
Re: Tower-EBC G.P./S.E.N.C., Applicant And: Baffinland Iron Mines Corporation, Baffinland Iron Mines LP, Respondents
Before: L. A. Pattillo J.
Counsel: Ira Nishisato, Hugh Meighen, Erin Peters and Richard H. Shaban, for the Applicant Kent E. Thomson, Maureen Littlejohn, Anisah Hasan, Sean R. Campbell, for the Respondents
Heard by Videoconference: September 20, 2021
Endorsement
[1] This is an application by Tower-EBC G.P./S.E.N.C. (“TEBC”) for Judgment enforcing both the Partial Final Award on liability and damages dated December 9, 2020, and the Final Award dated May 19, 2021, rendered by an arbitral tribunal (the “Tribunal”) in an arbitration between TEBC and the respondents, Baffinland Iron Mines Corporation and Baffinland Iron Mines LP (collectively “BIM”).
[2] The Partial Final Award unanimously held that BIM had wrongfully terminated the contracts between the parties. The Tribunal split, however, in respect of the award of damages. The Majority Award (Messrs. Goldstein and Keefe) awarded TEBC damages of either $70,340,292 or $66,763,347, made up as follows:
a) $27,299,534 in consideration of TEBC’s Contractor’s Equipment upon the condition that TEBC, if requested by BIM to do so, would deliver full and effective legal title to BIM for all of the Equipment within 30 days of the Final Award. In the alternative, if BIM notified TEBC within 30 days of the Final Award that BIM elected not to take title to the Equipment, its liability for damages in regard to the Equipment were deemed to be satisfied by payment of $23,722,589 and the full return of the Equipment to TEBC on the 2021 sealift (the “Standby Claim”);
b) $58,372,496 for TEBC’s lost profit (the “Lost Profit Claim”);
c) $12,982,803 as compensation in respect of CRS claims (the “CRS Claims”);
d) $17,800,000 as compensation for Contractor-supplied Materials;
e) $2,034,463 as compensation pursuant to the Parties’ stipulation on smaller claims;
f) Pre-judgment interest at a rate of six percent per annum, compounded monthly, with an accrual date of October 25, 2018.
[3] The Tribunal’s Final Award awarded TEBC costs of the arbitration of $3,626,598.64 comprised of TEBC’s awarded legal costs; TEBC’s awarded share of the ICC administrative expense and TEBC’s awarded share of the fees and expenses of the Tribunal.
[4] TEBC’s application is brought pursuant to s. 50(1) of the Arbitration Act, 1991, SO 1991, c. 17 (the “Act”). Section 50(3) of the Act provides:
The court shall give a judgment enforcing an award made in Ontario unless,
(a) the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed;
(b) there is a pending appeal, application to set the award aside or application for a declaration of invalidity;
(c) the award has been set aside or the arbitration is the subject of a declaration of invalidity; or
(d) the award is a family arbitration award.
[5] BIM raises three defences to the application:
BIM has commenced a pending application to set aside the Majority Award pursuant to s. 46 of the Act; for an order granting it leave to appeal the Majority Award and the Final Award under s. 45(1) of the Act; and, if leave to appeal is granted, an order granting the appeal and setting aside or varying the Arbitral Award as necessary.
In the alternative, if TEBC is entitled to judgment for $70,340,292 as requested, which amount includes the higher amount for TEBC’s Equipment in paragraph 2(a) above, BIM submits that it should expressly require that, at BIM’s election, TEBC shall “deliver full and effective legal title to BIM for all of the Equipment”;
BIM submits that the Tribunal’s pre-judgment interest calculation should be adjusted to reflect BIM’s success in its application; and
TEBC’s request that the court enforce payment of the amounts specified in the Partial Final Award and Final Award include “applicable taxes” should not be granted. BIM submits that the Tribunal’s Award did not include “applicable taxes”.
[6] TEBC’s application for judgment was heard by me at the same time as BIM’s application to set aside the Partial Final Award and/or grant leave to appeal from the Partial Final Award and the Final Award.
[7] On April 11, 2022, I released reasons for decision dismissing BIM’s application in its entirety. Accordingly, BIM’s application is no basis for not granting judgement to enforce both the Partial Final Award or the Final Award.
[8] Further, as BIM’s application was dismissed in its entirety, there is no basis upon which to adjust the pre-judgment interest amount awarded by the Tribunal. BIM does not dispute the rate, compounding or accrual date set by the Tribunal so there should be no issue in calculating pre-judgment interest.
[9] TEBC takes no issue with BIM’s request that the judgment expressly require that, at BIM’s election, TEBC shall “deliver full and effective legal title to BIM for all of the Equipment” as provided in the Partial Final Award.
[10] Finally, I agree with BIM that the judgment should not include “applicable taxes”. Not only did the Partial Final Award and the Final Award not provide for applicable taxes, the Tribunal rejected TEBC’s request, brought after the Majority Award, requiring BIM to pay “additional taxes”.
[11] As BIM submits, granting TEBC’s request to include “additional taxes” would have the effect of overturning the Tribunal’s ruling on the issue.
[12] As none of the provisions in s. 50(3) of the Act are present, TEBC is entitled to Judgments enforcing each of:
a) the Partial Final Award in the amount of $70,340,292 on the condition that, if requested by BIM, it will deliver full and effective title to BIM for all the Equipment within 30 days of the judgment; and
b) the Final Award in the amount of $3,626,598.64.
[13] Both judgments shall provide for pre-judgment interest in accordance with the Tribunal’s Award and post-judgment interest in accordance with the Courts of Justice Act.
[14] TEBC is entitled to its costs of the application. The parties are directed to discuss and resolve costs within 30 days failing which counsel should arrange a Case Conference on the Commercial List to resolve quantum.
L. A. Pattillo J. Released: April 22, 2022