Court File and Parties
SUPERIOR COURT OF JUSTICE – ONTARIO
7755 Hurontario Street, Brampton ON L6W 4T6
RE: IBRAHIM, TAREQ, Applicant AND: KOSHI BASHI INC., Respondent SITESCAPE CONSTRUCTION GROUP INC., Respondent NAFISA, OMAR, Respondent ALALAWI, YAHYA, Respondent NAFISA, ADNAN, Respondent
BEFORE: Justice Stewart
COUNSEL: STROH, MATTHEW for APPLICANT (mstroh@strohmercer.com) NAFISA, ADNAN REPRESENTING HIMSELF, NAFISA OMAR AND ALALAWI, YAHYA (adnannafisa@icloud.com)
HEARD: February 22, 2024, by video conference
ENDORSEMENT
overview
1Application for enforcement of final order pursuant to the Arbitration Act and ancillary relief, including orders freezing assets of respondents and requiring respondents to disclose financial information.
Facts and Procedural History
2By unanimous shareholder agreement (USA) dated February 26, 2018, the applicant, Tareq Ibrahim, became an equal shareholder in respondent, Koshi Bashi Inc. (KBI), along with respondents Omar Nafisa (Omar) and Yahya Alalawi (Yaha). KBI owned and operated Nafisa Daamascene Sweets & Cuisine (the restaurant) at 117 Queen Street South in Mississauga.
3A dispute arose between Tareq, Omar, Yahya and the respondent Adnan Nafisa (Adnan) regarding the business affairs of KBI and the operation of the restaurant.
4Mr. Ibrahim started an oppression action which was then stayed on November 9, 2021 and the dispute was sent to arbitration in accordance with the terms of the USA. Adnan was not a party to the USA, but he consented to the arbitration1. The respondent Sitescape also consented to the arbitration.
5The arbitrator had jurisdiction over all of the respondents. The arbitrator’s jurisdiction was not challenged.
6The parties agreed to bifurcate the issues before the arbitrator. The arbitrator issued three decisions:
a. January 11, 2022: requiring Yahya to purchase Tareq’s shares in KBI for $75,000.
b. September 22, 2023: broadly speaking, the arbitrator found oppressive conduct by the individual respondents and found i. Tareq was entitled to repayment of the balance of his outstanding shareholder loans in the amount of $223,585.71 from all the respondents jointly and severally, together with interest at the prime rate charged by TD Bank plus 2%, such interest accruing from May 1, 2021; ii. Substantial indemnity costs awarded to Tareq; iii. Tareq could appoint a receiver over the restaurant if the parties did not reach a repayment agreement within 90 days of September 22, 2023.
c. November 30, 2023: the arbitrator awarded costs to Tareq in the amount of $43,777.61 for the hearing noted in section (b), above2.
7To date, the respondents have not made any payments towards the second and third decision.
8At some point following the costs award, Enbridge shut off the case supply to the restaurant.
9On December 18, 2023, Tareq learned that the respondents were no longer represented by counsel and the restaurant had closed.
10The parties attended an urgent case conference before the arbitrator in late December, 2023, who circulated a draft interim order. Although all of the respondents consented to the terms of the interim order, the arbitrator did not sign the order because the respondents did not pay their arbitration fees.
11In early January, 2024, Tareq was informed by the owner of the restaurant premises that the restaurant had been abandoned, which violated the lease agreement. The restaurant website also shut down.
12On January 24, 2024, Tareq inspected the restaurant. There was no cash on the premises and the restaurant books and records appeared to be missing.
13Tareq’s evidence states that before and during the arbitration, the respondents took multiple, unilateral steps to transfer the restaurant’s assets to other corporations they controlled while dissipating or other failing to account for the proceeds.
14The respondents did not file any materials on the motion. Adnan appeared as the agent for the respondents, Omar and Yahya. Although Adnan’s submissions are not evidence, I made careful note of the submissions in order to understand the positions of the individual respondents. The corporate respondents did not appear and were not represented.
Enforcement of Final Arbitral Award
15The final award of the arbitrator has not been appealed. The respondents have not applied to set aside or vary the award. The final award therefore enforceable pursuant to section 50 of the Arbitration Act, 1991, S.O. 1991, c.17.
Worldwide Mareva Injunction
16Tareq seeks an interlocutory injunction pursuant to section 101 of the Courts of Justice Act. He seeks a worldwide Mareva injunction, freezing assets and requiring the respondents to disclose financial particulars. (By worldwide, Tareq asks that the court order apply to all assets of the respondents but concedes that he would have to start proceedings in other countries in order to have this order recognized and enforced).
17Tareq argues that this is an interlocutory injunction in that it is a post-judgment Mareva injunction in aid of execution amounts to injunctive relief restraining a party from dissipating assets pending execution of the judgment itself3.
18However, In the Coast to Coast case, the parties had a Mareva injunction in place prior to judgment, unlike in this case4.
19Further, the relief sought by Tareq (as reflected in his draft judgment) is in the nature of a permanent injunction, which is not appropriate relief on a motion within an application.
20Finally, despite seeking this serious and wide-ranging relief, Tareq argues, without any supporting law, that the court should waive the requirement for him to give an undertaking for damages, despite such as undertaking being something that the applicant “must” give on a Mareva injunction in aid of execution5.
21I therefore conclude that the test for a worldwide Mareva injunction is not met.
Relief Consented to by Respondents
22The respondents consented to an order by the arbitrator regarding production of financial information and preventing dissipating and disposing of restaurant assets. The order was not finalized. Assuming that Tareq is prepared to give an undertaking for damages, he would be entitled to seek an order from the court compelling the respondents to provide financial information and prevent the dissipation or disposal of assets in Ontario.
Result
23I therefore make the following orders:
a. Pursuant to section 50 of the Arbitration Act, 1991, S.O. 1991, s.17, the final award contained in the application record is hereby recognized and enforceable in accordance with its terms.
b. The motion for a worldwide Mareva injunction is dismissed, without prejudice to the applicant to bring the motion back before the court seeking modified injunction terms.
c. Counsel for the applicants will serve this endorsement on all respondents.
Costs
24Costs were not addressed during the motion. If the parties cannot agree on costs, the parties will serve, file and upload submissions in accordance with the following schedule:
a. Applicants: by June 28, 2024 at 4pm;
b. Respondents: by July 19, 2024 at 4pm.
25Submissions will be limited to four pages, double spaced and 12 point font, exclusive of offers, bills of costs and caselaw.
Released: May 16, 2024
Footnotes
- Omar and Adnan are brothers.
- The decisions of September 22 and November 30, 2023 constitute the “final award”.
- Coast to Coast Against Cancer v. Sokolowski, 2016 ONSC 170 at para 5.
- Coast to Coast, at para 9.
- Coast to Coast, at para 6.