Roxford Enterprises SA v. Cuba et al.

The issue in this case was whether the assets of Cubana de Aviacion S.A. (“Cubana”) were available for seizure to satisfy a judgment obtained by default against the government of Cuba. Cubana was not a party to the original action but, according to the Plaintiff, the government of Cuba was the true owner of Cubana’s shares and assets such that the property of Cubana should be liable to seizure to satisfy Cuba’s debts. Having first determined that the Federal Court had jurisdiction to hear the case, the Prothonotary answered the narrow question: were the assets of Cubana liable to seizure for a debt owed by Cuba in respect of litigation unrelated to Cubana’s affairs? This was the opposite of the usual question asked in sovereign immunity cases, that is, is a particular state entity entitled to the benefit of sovereign immunity in respect of its activities? There apparently being no Canadian case law addressing the issue, the Prothonotary adopted the principles set out by the United States Supreme Court, these being: duly created instrumentalities of a foreign state are entitled to be accorded a presumption of independent status, however, where a corporate entity is so extensively controlled by its owner such that a relationship of principal and agent is created, one may be held liable for the actions of the other. The Prothonotary held that the facts did not support the conclusion that Cubana’s business, income, undertaking and assets were controlled or even owned by Cuba, and thus concluded that the Plaintiff had not dislodged the presumption that Cubana was a separate juridical entity. Cubana could therefore not be liable for the debts of Cuba.