On September 18, 2025, the Supreme Court of Canada declined leave to appeal with respect to two high-profile arbitration cases.
First, the Supreme Court dismissed the application for leave to appeal in United Mexican States v. Vento Motorcycles, Inc. (Vento). In Vento, the Court of Appeal for Ontario set aside the award of an arbitral panel due to a reasonable apprehension of bias on the part of one panel member. The finding in Vento, that a reasonable apprehension of bias on the part of one panel member will void the substantive decision of the panel as a whole, accordingly stands as good law.
The Supreme Court also dismissed separate applications by India and the Airports Authority of India (AAI) for leave to appeal in Republic of India, et al. v. CCDM Holdings, LLC, et al. (India/Devas). The applicants sought to challenge the judgment from the Court of Appeal of Quebec about the enforcement of arbitral awards in the context of investor-state disputes.
The Vento decision was the subject of a previous Blakes Bulletin, which can be found here: A Reasonable Apprehension: Ontario Court of Appeal Sets Aside Arbitral Award Due to Bias. The balance of this bulletin, therefore, addresses the India/Devas case.
Background
In 2011, Antrix Corporation Ltd., a state-owned enterprise of India, terminated an agreement with Devas Multimedia Private Ltd. This termination led investors of Devas Multimedia Services Ltd (Devas) to initiate arbitration proceedings against India under the 1998 bilateral investment treaty (BIT) between India and Mauritius for unlawful expropriation of their investments and a breach of India’s fair and equitable treatment obligations. The parties proceeded to arbitration, and ultimately the tribunal found India liable for breaching the BIT and awarded the investors over US$111-million in damages.
Devas investors subsequently sought recognition and enforcement of the arbitration award in Quebec. On November 24, 2021, the Superior Court of Quebec allowed the seizure before judgment of funds held by the Montréal-based International Air Transport Association (IATA) on behalf of the Indian state-owned AAI, considered the alter ego of India (AAI Seizure).
However, that decision was subsequently overturned in CC/Devas (Mauritius) Ltd. c. Republic of India, 2022 QCCS 7. On June 1, 2022, the National Assembly of Quebec enacted An Act Respecting the International Air Transport Association (IATA Act), exempting from seizures certain amounts held by the IATA, including funds held for the benefit of the AAI, with retroactive application to May 5, 2022. On September 6, 2022, the Superior Court concluded that the IATA Act rendered the seizure before judgment unenforceable with respect to all amounts of money received, collected and held by the IATA for the benefit of the AAI after May 5, 2022(see CC/Devas (Mauritius) Ltd. c. Republic of India, 2022 QCCS 3272.
On December 23, 2022, the Superior Court rejected India’s motion to dismiss the application for recognition and enforcement of the arbitral awards based on state immunity, particularly citing the waiver exception provided for in s. 4(2)(a) of the State Immunity Act (R.S.C. 1985, c. S-18) (see CC/Devas (Mauritius) Ltd. v. Republic of India, 2022 QCCS 4785).
Appeals from all rulings were heard and decided together by the Court of Appeal of Quebec.
Reinstatement of the AAI Seizure
The Court of Appeal reinstated the US$37.5-million seizure that had been quashed by the Superior Court, ruling that the creditors met the criteria for a seizure before judgment, and that nothing in the State Immunity Act prevented Quebec courts from authorizing ex parte seizures before judgment of state assets.
The Court of Appeal also held that the IATA Act took immediate effect for seizures involving funds held by the IATA after May 5, 2022, in line with the legislature’s intent. However, seizures of funds held before May 5, 2022, remained valid.
Waiver of Immunity
The Court of Appeal of Quebec confirmed that India had waived its jurisdictional immunity pursuant to s. 4(2)(a) of the State Immunity Act by ratifying the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (R.S.C. 1985, 2nd Supp., c. 16, 330 U.N.T.S. 3 and [1986] R.T.C. No. 43) (the New York Convention), by entering into a bilateral investment treaty with Mauritius that included dispute settlement provisions providing for arbitration, and by participating in such arbitration proceedings without reserving its right to claim immunity.
The Court of Appeal also held that submitting a dispute to arbitration inherently includes the subsequent recognition and enforcement process before domestic courts.
Key Takeaways From the India/Devas Case
- The decision confirms the ability of creditors to seek and obtain ex parte seizures of foreign state assets following arbitral proceedings, but before recognition and enforcement proceedings, and before obtaining a court’s decision regarding jurisdictional immunity.
- The Court of Appeal decision also confirms that state immunity can be waived. The exact circumstances in which such a waiver will occur, however, remain somewhat uncertain. Specifically, in the India/Devas case, the Court of Appeal relied on India’s (i) ratification of the New York Convention, (ii) entry into a bilateral investment treaty, and (iii) participation in the arbitration proceedings without reserving its rights. Where some of these factors are not present, the decision of a Court may be different.
For more information, please contact the authors or any other member of our Arbitration or Investment Treaty Arbitration groups.
