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Enforcement in Quebec of Foreign Judgments: Restraint Is in Order With Abusive Clauses

Quebec law allows for the recognition and enforcement of judgments rendered by foreign courts. Although these decisions are rendered according to foreign laws, can or must Quebec courts take into consideration the Quebec and Canadian public order principles in deciding whether to recognize such judgments?

In Awanda c. AMBC Ventures Inc., 2022 QCCA 1133, the Court of Appeal had the opportunity to answer this question.

The Superior Court had accepted to partially recognize and enforce a British judgment ordering the repayment of a US$100,000 loan with an annual basic effective interest rate of 438%, to which an extra 73% was added in case of contractual default. The amount owing under the judgment reached a total of US$536,500.

However, considering that a high interest rate was contrary to public order, the trial judge used his discretionary power to reduce the interest rate to 60%, the maximum allowable interest rate under section 347 of the Canadian Criminal Code.

On August 19, the Court of Appeal ruled that the British judgment was in part incompatible with public order within the meaning of paragraph 5 of article 3155 of the Civil Code of Québec.

The Court of Appeal, basing itself on article 3159 of the Civil Code, amended the decision of the trial court and recognized only the part of the British judgment relating to the reimbursement of capital. The court highlighted that Quebec courts may not amend the conclusions of a foreign judgment.

In the end, only the legal interest rate of 8% and some applicable judicial costs, included in the British judgment, were recognized, for a total of CA$218,356.89.

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Authors

Maxime Saint-Onge

Lawyer, Associate

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