The Alberta Court of King's Bench refused the stay and refused to dismiss the Writ allowing Angophora to seek enforcement of the Award against Mr. Ovsyankin in Alberta.

The Court applied the standard three-part test, set by the Supreme Court of Canada in RJR-MacDonald Inc v Canada (AG), [1995] 3 SCR 199, to the question of whether to stay the REO. In accordance with that test, the Court first determined whether there was a serious issue to be tried regarding whether Gazprom controlled Angophora and whether any transfers of proceeds delivered to Angophora pursuant to the REO and the Writ could constitute a breach of the Russian Sanctions. Given that the injunction as sought would amount to a final determination of the matter, the standard to be met on the first step in the three-part test was whether there was a strong prima facie case.

The Court accepted that Mr. Ovsyankin had proven there was a strong prima facie case that Angophora was a designated entity under the Russian Sanctions based on its control by Gazprom. However, in considering the second element of the stay test – whether Mr. Ovsyankin would suffer irreparable harm – the Court dismissed the stay application and allowed Angophora to proceed with enforcing the Award. The Court noted in considering irreparable harm that the Russian Sanctions were not intended to provide a means for debtors to avoid enforcement and found that the stay, which would only serve to delay enforcement of what was a final judgment against Mr. Ovsyankin, would not prevent irreparable harm. Given the negative finding on irreparable harm, consideration of the third part of the test (the balance of convenience) was not necessary. The Court nonetheless found that it would be contrary to public interest to allow a debtor to use the Russian Sanctions as Mr. Ovsyankin had proposed.

The Court did issue a cautionary note, finding that because there was a prima facie case that a designated entity under the Russian Sanctions did control Angophora, any Canadian entity would have to exercise caution in distributing proceeds to them. That caution, while not final on the issue of whether the Albertan entity conducting the enforcement could deliver any proceeds under the Writ, is highly likely to discourage any such distribution. While the Court limited the likelihood of delivery of proceeds to Angophora, in upholding the REO issued to enforce the Award, it did respect the finality of that Award and allowed Angophora to take all other steps to enforce against Mr. Ovsyankin's real property in Alberta.

Analysis

Successful enforcement of the Award in Alberta is subject to Angophora's future ability to transfer the proceeds in the event the Russian Sanctions are amended or lifted, or if Angophora is able to show, despite the prima facie case, that Gazprom does not "control" it pursuant to the Russian Sanctions. However, by refusing the stay, the Court prevented Mr. Ovsyankin from avoiding enforcement of what is, without the impact of the Russian Sanctions, a final arbitral award.

This is consistent with the general approach of Canadian courts to uphold and enforce those awards.

Angophora Holdings Limited v Ovsyankin, 2022 ABKB 711