Air India, Ltd. v. CC/Devas (Mauritius) Ltd. and others, CCDM Holdings, LLC and others, Republic of India, International Air Transport Association (IATA) and Airport Authority of India

At a glance

Parties

Air India, Ltd. (appellant, impleaded party) v. CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited, Telcom Devas Mauritius Limited, CCDM Holdings, LLC, Devas Employees Fund US, LLC and Telcom Devas, LLC (respondents); Republic of India, IATA (garnishee) and Airport Authority of India (impleaded parties)

Case no.

500-09-029888-229 (500-17-119144-213); 2022 QCCA 1264

Court

Court of Appeal of Quebec (Montréal)

Forum and rules

Recognition and enforcement of foreign arbitral awards; New York Convention, Article III; Civil Code of Québec

Underlying award(s)

Two arbitral awards against India arising from the Devas–Antrix contract: liability (2016) and quantum (2020)

Tribunal

Jacques J. Levesque, Mark Schrager, Marie-Josée Hogue (reasons by Hogue J.A.)

Sector

Satellite / telecommunications contract; aviation (garnished assets)

Outcome

Appeal allowed; the seizure before judgment of sums IATA owed to Air India was quashed in full, with legal costs at first instance and on appeal awarded to Air India.

Amount

IATA declared that it owed USD 17,306,658.70 to Air India. The first-instance judge had released 50% of the seized funds; the Court of Appeal released the whole seizure.

The dispute

The Devas shareholders held two arbitral awards, on liability (2016) and on quantum (2020), ordering the Republic of India to pay large sums. The awards arose from a contract between Devas Multimedia Services and Antrix Corporation Limited, a company owned by India. India had not paid. On 24 November 2021 the award creditors applied to the Quebec Superior Court for recognition of the awards. They also obtained writs of seizure before judgment against sums held by IATA, first those due to Airport Authority of India and then, on 21 December 2021, those due to Air India. Air India was not a party to the arbitrations. The creditors argued that Air India, a state company wholly controlled by India, was India's alter ego. They said its assets could be seized for India's debt under international enforcement practice and the New York Convention. Air India argued that it was a distinct legal person. It said its corporate veil could be lifted only on the grounds in article 317 of the Civil Code of Québec, and the creditors had not alleged facts showing any of them.

Key holdings

1. The same rules apply to reverse piercing (seizing a company's assets for its shareholder's debt) as to ordinary veil piercing. Air India is a legal person with its own personality and its own assets, and its status as a state company does not change that. ¶¶ 32–34
2. Article 317 C.c.Q. sets out the cases in which the corporate veil may be lifted: the company's personality must be used to hide fraud, abuse of right or a breach of a rule of public order. Alter-ego status alone is not enough. Otherwise every company with a single shareholder would lose the benefit of separate personality. ¶¶ 44–49
3. The New York Convention does not require Quebec to adopt the alter-ego enforcement doctrine used in other jurisdictions. Its aim is to prevent discrimination against foreign awards, not to make them easier to enforce than domestic ones. Article III requires enforcement under the procedural rules of the place where the award is relied on. ¶¶ 52–56
4. The fact that the debt arises from a foreign arbitral award against a foreign State does not displace the requirements of article 317. The alter-ego test developed under the State Immunity Act does not apply to this question. ¶¶ 57–58
5. The creditors did not allege that Air India was created or used for any of the purposes in article 317. The judge therefore could not authorise the seizure, and the seizure in IATA's hands is quashed, with costs. ¶¶ 59–60; ¶¶ 2–6

Procedural history

1. 2016Arbitral award on liability against India.
2. 2020Arbitral award on quantum against India.
3. 24 November 2021The creditors apply to the Quebec Superior Court for recognition of the awards and obtain a first writ of seizure before judgment against sums IATA owed to India or AAI.
4. 21 December 2021A second writ is issued to seize sums IATA owed to Air India. IATA declares a debt of USD 17,306,658.70 to Air India.
5. 4–5 January 2022Joint hearing in the Superior Court of AAI's application to dismiss and Air India's application to quash the seizure.
6. 8 January 2022Superior Court (Pinsonnault J.) quashes the seizure concerning AAI for defective service. It upholds the Air India seizure but reduces it by half.
7. 13 May 2022Hearing in the Court of Appeal.
8. 20 September 2022Court of Appeal allows Air India's appeal and quashes the seizure. The creditors' separate appeal concerning AAI (500-09-029899-226) was to be heard later.

Tribunal, counsel and experts

Decided by

• Jacques J. Levesque Judge, Court of Appeal of Quebec
• Mark Schrager Judge, Court of Appeal of Quebec
• Marie-Josée Hogue Judge, Court of Appeal of Quebec (wrote the reasons)

For the claimant

Borden Ladner Gervais LLP

For other participants

Woods · Dentons Canada LLP

Run a conflict check on these names →

Keywords

• Devas
• Antrix
• Air India
• seizure before judgment
• garnishment
• reverse veil piercing
• alter ego
• article 317 Civil Code of Québec
• corporate veil
• state-owned enterprise
• New York Convention Article III
• enforcement of arbitral awards
• State Immunity Act
• IATA
• Quebec Court of Appeal
• Airport Authority of India

Summary generated with AI from the published documents — refer to the award for the authoritative text.