



COURT OF APPEAL FOR ONTARIO

CITATION: UD Trading Group Holding Pte.
    Limited v. TransAsia Private Capital Limited, 2022 ONCA 100

DATE: 20220203

DOCKET: C69265

Doherty, Benotto and Huscroft
    JJ.A.

BETWEEN

UD Trading Group Holding Pte. Limited,
    UIL Singapore Pte. Limited, UIL Malaysia Limited, UIL Commodities DMCC, Vadox
    Corp. and Prateek Gupta

Plaintiffs (Appellants)

and

TransAsia Private Capital
    Limited, TA Private Capital Security Agent Ltd., Rutmet Inc. and Export
    Development Canada

Defendants (Respondents)

Michael D. Schafler and Ara Basmadjian,
    for the appellants

George J. Pollack and Faiz Lalani, for
    the respondents TransAsia Private Capital Limited, TA Private Capital Security
    Agent Ltd.

Rahul Shastri and Kristie Jennings, for
    the respondents Rutmet Inc.

Jamie Macdonald, for the respondents Export
    Development Canada

Heard: December 3, 2021

On appeal from the order of Justice C.
    Gilmore of the Superior Court of Justice, dated March 17, 2021, with reasons reported
    at 2021 ONSC 1957.

REASONS FOR DECISION


I



[1]

The appellants, collectively referred to as
    UDG, are metal traders operating in Asia and the Middle East. The
    respondents, with the exception of Rutmet Inc. (Rutmet), and Export
    Development Canada (EDC), collectively referred to as TAP, provide financing
    through various means to metal traders. TAP operates out of Singapore, Hong
    Kong and the British Virgin Islands.

[2]

Rutmet purchases metal and metal products for
    sale to third-party buyers. Unlike virtually all of the other corporations and
    individuals involved in the commercial activities underlying this litigation,
    Rutmet is incorporated in, and does business in, Ontario. EDC is a Canadian
    Crown corporation that, among other things, provides trade credit insurance to
    Canadian companies.

[3]

Over the years, TAP has loaned funds for metal
    purchases to UDG and to Rutmet. Rutmet is not related to UDG and the two
    entities operate independently of each other.

[4]

In 2017-2018, the international commodities
    market faced serious economic challenges. TAP claimed that UDG was in default
    on tens of millions of dollars of loans. TAP was looking to realize on its
    security and enforce its guarantees, both personal and corporate. UDG
    maintained that TAP had realized on certain collateral, and that receivables
    had been paid to TAP via another corporate entity. UDG maintained it no longer
    owed TAP anything.

[5]

TAP commenced proceedings in Singapore and Dubai
    on the debts it alleged UDG owed it. Shortly after those proceedings were
    commenced, UDG commenced this proceeding in Ontario. In its Ontario claim, UDG
    seeks damages from TAP, a declaration that TAP has been unjustly enriched in
    the transactions with UDG, a declaration that TAP is no longer entitled to hold
    certain security or enforce that security, and a declaration that there are no
    outstanding UDG receivables payable to TAP. In the Ontario proceeding, UDG
    advances as claims effectively the same allegations it makes as defences in the
    foreign proceeding.

[6]

After commencing its Ontario action, UDG brought
    an anti-suit injunction, seeking to enjoin TAP from pursuing the ongoing
    litigation in Dubai, UAE, and Singapore in favour of the Ontario proceedings
    recently commenced by UDG. The motion judge dismissed that motion. There is no
    appeal from that order.

[7]

TAP brought a cross-motion to UDGs anti-suit
    injunction. TAP sought an order permanently staying UDGs Ontario proceeding on
    the basis that the foreign jurisdictions in which litigation was already underway
    were clearly more appropriate jurisdictions than Ontario. The motion judge
    granted that motion. UDG appeals.


II



[8]

The decision to stay a proceeding in Ontario in
    favour of an ongoing proceeding in another jurisdiction involves both
    fact-finding and the exercise of judicial discretion. This court must defer to
    the motion judges fact-finding and exercise of her discretion, absent an error
    in law, a material misapprehension of the evidence, or unreasonable factual
    findings.

[9]

In the course of her analysis, the motion judge
    made two important findings of fact. First, the motion judge held, at para.
    73(h):

The Rutmet loan is a different matter to which
    UDG is not a party. The security for the Rutmet loan is the receivables owed to
    Rutmet by UIL Buyers. The UIL Loan Agreements are entirely different and are
    secured by Hangji and GEM shares. The two debts involved different borrowers
    and are secured by different assets. The Plaintiff seeks to conflate these
    unrelated debts.

[10]

Second, the motion judge observed, at para. 83,
    that the action initiated in Ontario by UDG is a step taken by the plaintiffs
    [UDG] to attempt to gain a jurisdictional advantage where none exists.

[11]

Both findings of fact were open to the motion
    judge. The appellant has not convinced us we should interfere with either. The
    motion judges decision to stay the Ontario proceedings must be seen through
    the lens of those findings and assessed in light of them. Given those findings,
    it is hardly surprising the motion judge exercised her discretion as she did.

[12]

The underlying commercial transactions show
    little, if any, connection to Ontario, apart from the involvement of Rutmet. The
    same can be said for the various entities involved in those transactions.
    However, given the motion judges finding, Rutmets activities and dealings
    with TAP cannot open the Ontario courtroom door to a lawsuit brought against
    TAP by UDG and arising out of transactions between TAP and UDG.

[13]

The motion judge considered and rejected UDGs
    arguments that TAP had attorned to the jurisdiction of the Ontario court when
    it commenced (and shortly thereafter abandoned) a receivership application in
    relation to Rutmet, and when it brought an application for a judicial
    interpretation of an insurance policy issued by Export Development Canada in
    respect of some of the receivables in issue between Rutmet and TAP. We see no
    error in the motion judges analysis of the attornment arguments. Both the
    receivership and the application for the interpretation of the insurance policy
    related to business dealings between Rutmet and TAP. TAPs involvement in litigation
    in Ontario in that proceeding cannot become an attornment by TAP in respect of an
    action brought by UDG against TAP in relation to different loans.

[14]

The motion judge also considered the impact of
    the various foreign selection clauses contained in the different applicable security
    documents governing the transactions. Given the sophistication of all parties, choice
    of forum clauses, agreed upon by the parties, demanded considerable weight in
    determining whether the Ontario proceeding should be stayed. The motion judge,
    at para. 83, held that the applicable forum selection clauses were clear and
    unambiguous. Those clauses effectively put TAP in control of the choice of
    forum in which to litigate disputes arising out of those agreements and
    guarantees.

[15]

The appellant has not demonstrated any error in
    the motion judges interpretation of the applicable forum selection clauses.
    She properly gave those clauses considerable weight on the motion to stay the
    Ontario proceedings.

[16]

In addition to challenging specific aspects of
    the motion judges reasons, UDG takes issue with the adequacy of the reasons as
    a whole. UDG submits the reasons focus almost exclusively on UDGs anti-suit
    injunction and say next to nothing about TAPs motion to stay the Ontario
    proceedings, apart from noting that doing so would avoid a multiplicity of
    proceedings.

[17]

Reasons must be considered as a whole and their
    adequacy assessed functionally. Reasons must explain the result. Most importantly,
    reasons must explain to the losing party why it lost. Reasons must also permit
    meaningful appellate review of the decision made at first instance.

[18]

The motion judges reasons, read as a whole,
    clearly explain why she stayed the Ontario proceedings. The motion and the cross-motion
    involved the same factual matrix and overlapping legal principles. The motion
    judges findings as to the distinction between TAPs dealings with Rutmet and
    its dealings with UDG, and her finding as to UDGs motivation for commencing the
    Ontario proceedings, were equally applicable to both motions and went a long
    way to deciding the eventual outcome of those motions.

[19]

The motion judge diligently worked her way through
    the dense record provided by the parties. She made no material factual errors.
    She also dealt at length with all of the arguments advanced by UDG against
    staying the Ontario proceeding, particularly as they related to attornment, and
    the effect of the applicable choice of forum clauses. With respect, there is no
    merit to the submission the reasons do not explain the result arrived at by the
    motion judge, or permit meaningful appellate review of that result.


III



The Fresh Evidence Applications

[20]

UDG and TAP both brought fresh evidence
    applications on the appeal. UDG produced various documents arising out of
    litigation in Ontario involving Rutmet and TAP. The litigation arises out of
    debts allegedly owed by Rutmet to TAP or related companies.

[21]

The fresh evidence tendered by TAP relates to developments
    in the ongoing proceedings in Singapore and Dubai. The developments include an
    unsuccessful attempt by UDG to set aside an earlier order refusing to stay the
    Singapore proceedings on the basis of
forum non conveniens
.

[22]

Both parties are content that the fresh evidence
    be received.

[23]

We have considered the fresh evidence. It
    provides no basis upon which to doubt the correctness of the order under
    appeal.


IV



[24]

The appeal is dismissed.

[25]

Counsel for the appellants confirmed there is no
    freestanding motion for leave to appeal the costs order made by the motion
    judge. The respondents are entitled to costs of the appeal in the amount of
    $15,000, inclusive of relevant taxes and disbursements. The costs of the motion
    before Paciocco J.A., fixed by him at $10,000, are also payable to the
    respondents.

Doherty J.A.

M.L. Benotto J.A.

Grant Huscroft J.A.


