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Stays - Temporary. Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.p.A.
In Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.p.A. (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, here regarding "whether a foreign arbitral award can be enforced in Ontario, not against the judgment debtor, but against a non-party to the arbitration who contests liability".
This was an exotic international case where a Chilean arbitrator made an award against an Italian company ['Astaldi'], and then - in Italian insolvency proceedings - an issue of contract interpretation arose as to whether a second Italian company ['Webuild'] "acquired Astaldi’s liability for the Arbitral Award". Subsequently, the successful party to the abitration ['Sociedad'] applied in Ontario "to enforce the Chilean Arbitral Award against Webuild although Webuild was not party to the Chilean arbitration". Then Webuild moved to stay that application on grounds that Ontario was a 'forum non conveniens' and that the "ability to enforce the Arbitration Award against Webuild had not yet been determined" (ie. Webuild's liability for the arbitration award hadn't been determined with finality), and this was best done in Italy. The judge granted Webuild's stay application. These are the reasons for decision of an appeal of the application judge's ruling, which was dismissed.
Here the court considers temporary stays:(d) Whether the Motion Judge Erred in Treating the Stay as Temporary
[75] Sociedad claims the motion judge erred in law by applying the test for imposing a temporary stay when she effectively imposed a permanent stay on the issue subject to the Hollinger[1] test: the liability issue.
[76] The motion judge imposed the stay pursuant to s. 106 of the Courts of Justice Act.
[77] Section 106 provides that a court may, on its own initiative or on motion by any person, whether or not a party, stay any proceeding in the court on such terms as are considered just. A stay is a discretionary remedy under s. 106: K.K. v. M.M., 2025 ONCA 446, 16 R.F.L. (9th) 1, at para. 39.
[78] Appellate interference with a s. 106 discretionary order is only warranted where the judge has erred in law, seriously misapprehended the evidence, exercised their discretion based upon irrelevant or erroneous considerations, or failed to give any or sufficient weight to relevant considerations: Yaiguaje v. Chevron Corporation, 2013 ONCA 758, 118 O.R. (3d) 1, at para. 42, citing Regal Constellation Hotel (Re) (2004), 2004 CanLII 206 (ON CA), 71 O.R. (3d) 355 (C.A.), at para. 22.
[79] I do not agree that the motion judge erred in law by applying the test for a temporary stay. A court may grant a stay explicitly on a temporary basis or make a stay conditional on subsequent events in the alternative forum, such as the continuation of a proceeding in the alternative forum: Janet Walker, Canadian Conflict of Laws, 7th ed. (Toronto: LexisNexis Canada, 2005) (loose-leaf updated 2025, release 118), vol. 1 at § 6.02[4].
[80] A stay is considered temporary if it is granted pending resolution of a foreign proceeding where the foreign proceeding would “substantially reduce the issues to be determined” or if success in the foreign proceeding could render the local proceeding “substantially moot” or otherwise have a “material” impact on the outstanding issues in the case: Hollinger International Inc. v. Hollinger Inc. (2004), 11 C.P.C. (6th) 245 (Ont. S.C.), at para. 5, appeal quashed, 2004 CanLII 48063 (Ont. C.A.), and leave to appeal to Div. Ct. refused, 2005 CanLII 4582 (Div. Ct.); see also Ainsworth Lumber Co. v. Canada (Attorney General), 2001 BCCA 105, 85 B.C.L.R. (3d) 62.
[81] The Italian proceeding could either (i) remove, substantially reduce or materially affect the issues to be determined in Sociedad’s recognition and enforcement proceedings in Ontario by resolving the issue of liability; or (ii) render Sociedad’s recognition and enforcement proceedings (which is the subject of the stay as confirmed by the motion judge’s order), substantially moot.
[82] If Webuild is found liable for the Arbitral Award against Astaldi, Ontario courts may then enforce the damage award against Webuild’s assets in Ontario. If, however, the Italian court decides that Webuild is not liable for the damage award, the enforcement proceedings in Ontario would be substantially moot. As a result, any stay of the enforcement proceedings is temporary as next steps must await the decision of the Italian court on the issue of liability. Thus, the motion judge correctly recognized this case as a situation where the Hollinger test would apply.
[83] Furthermore, the motion judge did not err in her application of the Hollinger test. According to Hollinger, a temporary stay pending the resolution of another proceeding may be granted where:(a) there is substantial overlap of issues in the two proceedings;
(b) the two cases share the same factual background;
(c) issuing a temporary stay will prevent unnecessary and costly duplication of judicial and legal resources; and
(d) the temporary stay will result in an injustice to the party resisting the stay. [84] As discussed by the motion judge, both the Italian and the Ontario proceedings address the overlapping issue of whether the liabilities related to the Arbitration Award were assumed by Webuild. The same facts apply in both proceedings and duplication of judicial and legal resources will be prevented as a result of the stay. The delay in Sociedad’s ability to continue their enforcement proceedings can be compensated.
[85] Therefore, I see no error with the motion judge’s characterization of the stay as temporary, and thus she did not err in applying the Hollinger test for a temporary stay.
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