In 2013 the Ontario Superior Court of Justice decided a dispute between Bombardier Inc and Estonian Air (for further details see "Ontario Superior Court rules on Bombardier v AS Estonian Air"). When the dispute first arose in mid-2011, the republic of Estonia owned 97% of the shares of Estonian Air. Bombardier had sued Estonian Air, claiming that the cancellation of a contract for the purchase of five new CRJ900 aircraft was the result of the republic's tortious interference. Before the Ontario Superior Court, the republic succeeded in having the action permanently stayed on the basis that it was immune from the jurisdiction of any court in Canada. Bombardier appealed that decision to the Ontario Court of Appeal, which rendered its decision on January 17 2014, dismissing .....
The shareholders' agreement between Estonian Air and the republic included a statement that the agreement "constitutes a private act, subjecting the [Republic] to private civil law in Estonia as well as abroad", and that the republic "expressly acknowledges that… it waives all defences based on sovereign immunity or other form of immunity".
On the motion before the superior court, it was held that Bombardier could not rely on the shareholders' agreement because it was not a party to it.
On appeal, the focus was on another element of Bombardier's argument: whether the republic was engaged in 'commercial activity'. Under Canada's State Immunity Act,(1)Section 3creates a presumption that .....
The court rejected this argument swiftly, stating that "the action cannot proceed until the issue of sovereign immunity has been decided".
Further, the appeal court held that the superior court's findings on the republic's involvement in the affairs of Estonian Air were "squarely based on the evidence", noting that the superior court had considered affidavits from the chief financial officer of Estonian Air and a senior officer of the Ministry of Economic Affairs and Communications. Specifically, the superior court found that:
- the republic's activities were restricted to oversight as shareholder and to the furtherance of governmental objectives;
- with one "insignificant" exception, the evidence demonstrated that "there was no involvement by the government and no political interference with [Estonian Air's] management in reaching its decision" to cancel the Bombardier contract and to buy aircraft from a competitor.
The appeal court was not persuaded that the evidence brought forward by Bombardier was....
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