In Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.p.A., 2026 ONCA 28, the Court of Appeal affirmed a stay of Ontario enforcement proceedings on grounds of forum non conveniens.
The appellant, Sociedad Concesionaria Metropolitana de Salud S.A. (SCMS), had sought orders recognizing and enforcing a Chilean arbitral award in Ontario against Webuild S.p.A. (Webuild), who had not been a party to the arbitration. SCMS’s position had been that Webuild had assumed the award debtor’s liabilities through an Italian restructuring and partial spin-off transaction. The Ontario Superior Court of Justice (2024 ONSC 4491) had stayed SCMS’s enforcement application because the question of Webuild’s liability was under consideration in an Italian court.
The Court of Appeal confirmed that liability of the non-party (to the arbitration) and recognition and enforcement against the arbitration respondent may be severed, and that forum non conveniens remains available where a threshold liability issue against a non-party (to the arbitration) governed by foreign law must first be resolved. Italy, not Ontario, was the clearly more appropriate forum to determine whether Webuild assumed the arbitral debt.
Relevant facts
In 2015, SCMS contracted with the Chilean branch of an Italian company, Astaldi S.p.A. (Astaldi), to construct a hospital in Chile. Following project delays, SCMS terminated the contract in January 2019 and commenced arbitration in Chile against Astaldi. The arbitrator awarded damages of CA$188 million to SCMS in December 2021.
Separately, in 2018 Astaldi had sought creditor protection under Italian laws to facilitate a restructuring. Eventually, a portion of Astaldi’s business was earmarked for liquidation while the balance was to be continued, “continuity business.” In July 2021, Webuild acquired the continuity business. The Astaldi-Webuild agreement assigned legal relationships and liabilities relating solely to the transferred assets.
Webuild had not been a signatory to the contract that had precipitated the arbitration in Chile and had not participated in the arbitration. The award did not deal with Webuild’s potential liability to SCMS.
Procedural background
In 2023, SCMS brought an application in the Ontario Superior Court of Justice for an order recognizing and enforcing the Chilean award against Webuild. SCMS’s theory was that Webuild had assumed Astaldi’s liabilities when it acquired the “continuity business.”
Webuild moved to stay or dismiss on grounds of lack of jurisdiction or, alternatively, forum non conveniens, arguing that the “threshold” question, whether it assumed Astaldi’s arbitral debt, was governed by Italian law and should first be determined in Italy before Ontario could consider any enforcement proceeding.
Motion judge’s decision
The motion judge concluded, first, that Ontario had jurisdiction over Webuild, noting that it was currently performing some of the largest public infrastructure projects in Ontario (the Ontario Line and the Hurontario Light Rail Transit project).
The motion judge then found that a temporary stay was appropriate. There was factual and legal overlap between the Ontario and Italian proceedings on the threshold issue of whether Webuild had assumed the liabilities related to the arbitration with SCMS, and the factual background was the same. The motion judge held that a temporary stay would prevent unnecessary and costly duplication of judicial and legal resources.
Issues on appeal
The principal issues before the Court of Appeal were:
- Whether the stay order was final or interlocutory.
- Whether forum non conveniens applied to recognition and enforcement proceedings.
- Whether the motion judge had erred in severing liability from enforcement.
- Whether Italy was the clearly more appropriate forum.
The Court of Appeal’s analysis
- Was the stay order final or interlocutory?
The Court relied on M.J. Jones Inc. v. Kingsway General Insurance Co. (2003) and Airia Brands Inc. v. Air Canada, for the proposition that the characterization of an order as final or interlocutory depends on its effect, rather than its form or the stage of the underlying proceeding.
The Court held that the order here was final because a stay granted on forum non conveniens grounds effectively ends the proceeding in Ontario, even if it does not finally resolve the broader dispute between the parties on the merits (at para. 49). On that basis, the Court confirmed it was the proper appellate court to decide the appeal.
- Does forum non conveniens apply in “enforcement” proceedings?
SCMS argued that Chevron Corp. v. Yaiguaje (Chevron) established that forum non conveniens had no place in recognition and enforcement proceedings. The issues in Chevron had been whether Ontario courts had jurisdiction to recognize and enforce an Ecuadorian judgment where the foreign judgment debtor, Chevron Corporation, claimed to have no connection with the province, whether through assets or otherwise, and whether the Ontario courts had jurisdiction over a Canadian subsidiary of Chevron, Chevron Canada Limited, a stranger to the foreign judgment for which recognition and enforcement was also being sought.
The Supreme Court of Canada held that the only connection that must be proven for recognition and enforcement to proceed is one between the foreign court and the original action on the merits; there was no preliminary need to prove a connection with Ontario or that Ontario was the most convenient forum for jurisdiction to exist in recognition and enforcement proceedings. It also held there to be an independent jurisdictional basis for proceeding against Chevron Canada due to the place of business it operated in the province, and at which it had been duly served.
In this case, the Court held that Chevron hadconcerned the recognition and enforcement of an existing, already-adjudicated obligation against the judgment debtor (at para. 52). Chevron indeed stands for the principle that where there is an already-adjudicated obligation, forum non conveniens is not relevant because an enforcement court is not being asked to adjudicate any dispute; its jurisdiction is invoked to enable collection.
However, in this case, unlike the debtor in Chevron, there was no “already-adjudicated obligation” against Webuild (at para. 54). It was never a party, and its liability had never been determined in any forum. Where the enforcement respondent, as in this case, “hotly contests” liability and that liability is not addressed in the award itself, the Ontario court is not simply facilitating enforcement. Rather, it must first undertake a substantive adjudication of whether the respondent is legally bound (at para. 55). Forum non conveniens remains relevant in such circumstances.
SCMS also argued that Ontario courts routinely address third‑party liability within enforcement proceedings, for example, by piercing the corporate veil or applying alter‑ego theories. The Court rejected this argument (at para. 56). Veil-piercing cases assume that the companies are related. In this case, however, Webuild and Astaldi were not related companies, nor was Webuild the parent company or alter ego of Astaldi (at para. 58). In Chevron, Chevron Corporation and its subsidiary, Chevron Canada Limited, were involved.
- Could the motion judge separate liability from enforcement?
SCMS submitted that it had been an error to “sever” liability from enforcement and stay the proceedings on the basis that Ontario was forum non conveniens for the liability issue. The Court rejected this argument. The cases SCMS relied on were distinguishable as they concerned attempts to prevent splitting proceedings among multiple defendants for efficiency reasons, not the enforcement of arbitral awards. None was a precedent for this case, where liability had never been adjudicated (at para. 59).
- Competing forum and “clearly more appropriate” forum: Ontario or Italy?
The Court held that the Canadian framework for forum non conveniens derives from Club Resorts Ltd. v. Van Breda, where the Supreme Court held that once jurisdiction simpliciter is established, a court may nonetheless decline to exercise it if the defendant establishes that another forum is “clearly more appropriate,” based on factors such as witness location, cost, risk of conflicting judgments and overall fairness (at para. 63). The Court, citing Haaretz.com v. Goldhar, confirmed that forum non conveniens is an exercise of discretion, and an appeal court should intervene only if the motion judge erred in principle, misapprehended or failed to take account of material evidence, or reached an unreasonable decision (at para. 64).
SCMS argued that Webuild had failed to demonstrate that (i) there existed a clearly more appropriate forum, with (ii) a connection to the subject matter of the litigation. The Court rejected SCMS’s submission.
On the alternative forum issue, while the Court held that Italy was not a true competing forum because the Italian proceeding and the Ontario proceeding were not identical, the alternative forum does not need to have an identical proceeding already underway. The forum non conveniens analysis is a comparative exercise: which forum is better suited to decide the issue in dispute (at para. 66). On the connection issue, the Court agreed with the motion judge that Italy had a real and substantial connection over the subject matter of the litigation (at para. 67).
The Court accepted the motion judge’s findings: the agreement by which Webuild had acquired the continuity business had been made in Italy involving Italian entities and governed by Italian law; the dispute was intertwined with complex Italian restructuring concepts, and therefore Italy was the most convenient forum for the determination of Webuild’s liability. The Court also accepted practical convenience factors: key witnesses and documents were in Italy; documents were in Italian (with significant translation burdens); and there was a real risk of inconsistent outcomes given parallel proceedings across multiple jurisdictions (at para. 69, 70).
Key takeaways
This decision is sensible. Enforcement of an arbitral award against a non-party to the arbitration who is not related to the award debtor should be carefully viewed – especially when the non-party has contested its liability in another forum. If enforcement depends on successor or third-party liability, the enforcer should very carefully consider potential jurisdictional and forum non conveniens issues before forging ahead. This decision also highlights the importance of considering enforcement theory at all stages of a case, in particular if the potential award debtor is undergoing any type of reorganization, statutory or otherwise.
The decision appears consistent with Chevron. First, jurisdiction simpliciter was established over Chevron’s Canadian subsidiary on the same basis as in Webuild: both entities had a physical presence in Ontario. Second, a stay on forum non conveniens grounds would have been inappropriate in Chevron because the question of whether the Canadian Chevron entity could be liable to satisfy the foreign judgment had yet to be decided under Ontario law, in Ontario. However, this case was distinguishable: a stay in favour of Webuild was appropriate because its liability as the judgment debtor’s potential successor remained to be decided under Italian law, in Italy.
For more information on this topic, please contact the authors, Michael D. Schafler, Rachel Howie, Chloe Snider and Ekin Cinar.
