Case Update: Supreme Court Of Canada Dismisses Leave To Appeal The Judgment Of The Québec Court Of Appeal In CCDM Holdings LLC Et Al (2024 QCCA 1620)

The Supreme Court of Canada dismissed the Republic of India's ("India") and the Airport Authority of India's ("AAI") applications for leave to appeal a landmark Québec Court of Appealjudgment ("QCCA") dealing with state immunity.¹ We reported previously on that recent QCCA decision.

Refresher on QCCA decision and Leave to Appeal Denied

The underlying dispute in Devas v Antrix arose between India and the Mauritian investors and shareholders of Devas (a satellite communication service provider incorporated in India). The Mauritian investors brought arbitral proceedings before the Permanent Court of Arbitration under the bilateral investment treaty between India and Mauritius (the "BIT"). The arbitral tribunal rendered two awards: the first finding India liable for expropriating Devas' investments contrary to the BIT, and the second awarding Devas US $111 million in damages. When the award creditors sought to enforce the award in Québec, the QCCA was called upon to address several issues relating to sovereign immunity. The QCCA's key holdings were as follows:

• A State can waive immunity if it voluntarily submits to arbitration: The State Immunity Act ("SIA") precludes Canadian courts from exercising jurisdiction over foreign states unless a specified exception applies.² The QCCA found such an exception in this case, holding that India had explicitly waived sovereign immunity by: (i) ratifying the New York Convention, (ii)entering into the BIT, which included a dispute settlement clause referring the parties to arbitration, and (iii) participating in the arbitration without reserving its right to claim immunity.³
• The loss of sovereign immunity can extend to an alter ego of a State: The QCCA found that the Ministry of Civil Aviation of India exercised complete control over the Airport Authority of India ("AAI"), rendering AAI an alter ego of the State. Accordingly, the funds at issue were deemed to belong to India, and the loss of immunity extended to AAI as well.
• State immunity arguments will not preclude the granting of pre-judgment seizures: A judgment creditor seeking a pre-judgment seizure of assets is not required to address the issue of state immunity at the outset. While a lack of jurisdiction may later serve as a ground for setting aside a seizure, establishing jurisdiction is not required to obtain one.

In light of the Supreme Court of Canada's decision not to grant leave to appeal, the QCCA's holdings are the governing law on these key issues regarding the enforcement of arbitral awards against sovereigns under the federal SIA.

Significance in the Global Context

With the state of the law being what was pronounced by the QCCA, Canadian courts occupy a distinct position with respect to similar questions of law raised before foreign courts as a part of the global enforcement fight arising from Devas v Antrix. For example:

• Australian Federal Court upheld India's sovereign immunity defence on a narrow view of commercial activity:⁴ The Australian Federal Court agreed that a State's ratification of the New York Convention could result in a waiver of immunity (assuming an agreement to arbitrate is tendered).⁵ However, it upheld India's sovereign immunity defence based on its reservation to the New York Convention, which limited the convention's application to legal relationships that are commercial in nature. The Federal Court found the relationship between the claimants and India under the BIT not to be commercial, but a matter of public international law.⁶ This issue was not addressed before the QCCA, although it was touched on by the Superior Court below, which found that the BIT related to commercial activities, thereby engaging a separate SIA exception to immunity.⁷
• English High Court rejected argument that ratification of the New York Convention constituted a waiver of sovereign immunity:⁸ The English High Court held that a State's ratification of the New York Convention could not, on its own, constitute a waiver of its sovereign immunity.⁹ Unlike the QCCA or Australian Federal Court, the English High Court did not examine whether India's agreement to arbitrate under the BIT constituted a waiver of sovereign immunity under the U.K. State Immunity Act,¹⁰ as the proceedings were focused specifically on the New York Convention issue.¹¹
• United States Supreme Court did not uphold India's sovereign immunity defence:¹² The U.S. Foreign Sovereign Immunities Act of 1976 provides an exception to state immunity for suits involving confirmation of arbitration awards. The United States Supreme Court recently confirmed that this provision alone was sufficient to deprive India of a sovereign immunity defence to a recognition and enforcement proceeding in the U.S.¹³

These differing approaches to state immunity in various jurisdictions underscore the need for judgment creditors and debtors to consider enforcement jurisdictions carefully, as legal frameworks for enforcement against sovereigns, and the attendant outcomes, can vary significantly.

For the Canadian context, the Supreme Court of Canada's decision not to entertain an appeal of the QCCA decision reinforces established principles of state immunity under Canadian federal legislation. Foreign states are immune from the jurisdiction of Canadian courts subject to certain exceptions, including where:

• the foreign State explicitly submits to the jurisdiction of the court by written agreement or otherwise, either before or after a proceeding commences;
• the foreign State participates in a court process or other proceeding (including consent to arbitration) that may constitute waiver of immunity;
• the matters in issue relate to commercial activities of the foreign State or to the death or physical injury of a person or damage to property occurring in Canada;
• terrorism-related exceptions apply.

Footnotes

1. 2024 QCCA 1620; leave to appeal dismissed: 2025 CarswellQue 9023(SCC) (Westlaw).

2. State Immunity Act, R.S.C., 1985, c. S-18, section 3(1).

3. 2024 QCCA 1620, paras 72 and 80; New York Convention is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, 330 U.N.T.S. 3, at 3, T.I.A.S. No. 6997; The exception identified by the QCCA is found under the SIA, s. 4(2)(a).

4. Republic of India v CCDM Holdings, LLC, [2025] FCAFC 2 (Federal Court of Australia); Special leave to appeal was granted by the High Court of Australia, see [2025] HCADisp 120.

5. [2025] FCAFC 2 (Federal Court of Australia); The Federal Court expressed agreement with the reasoning of the judge below on this point, see para 72.

6. [2025] FCAFC 2 (Federal Court of Australia), paras 70-71, 75, and 81-82.

7. 2024 QCCA 1620 at para 44 and 98; The Superior Court dealt with the issue of the commercial activity exception found under SIA, s. 5.

8. CC/Devas (Mauritius) et al v The Republic of India, [2025] EWHC 964 (Comm) (English High Court); permission to appeal was granted by the English High Court, see [2025] EWHC 1189 (Comm) at para 6.

9. [2025] EWHC 964 (Comm) (English High Court) at paras 106-108.

10. See U.K.State Immunity Act, 1978, 1978 Chapter 33,s. 9. Though the Australian equivalent of the SIA also contains an exception to immunity related to arbitrations, this provision is somewhat more restrictive: see CCDM Holdings, LLC v Republic of India (No 3), [2023] FCA 1266 (Federal Court of Australia) at para 48.

11. [2025] EWHC 964 (Comm) (English High Court) at para 60; see< a href="https://www.bailii.org/ew/cases/EWHC/Comm/2025/964.html" target="_blank">[2025] EWHC 964 (Comm) (English High Court) at paras 9-10.

12. CC/Devas (Mauritius) LTD et al v Antrix Corp LTD et al, 605 U.S. ___ (2025) (U.S. Supreme Court).

13. 605 U.S. ___ (2025) (U.S. Supreme Court), at p. 7-9; see also prior decision of the United States District Court in Deutsche Telekom AG v Republic of India, Civil Case No. 21-1070, at p. 5-7, dealing with related enforcement proceedings to the Devas v Antrix matter.

To view the original article click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.