Supreme Court Issues Decision That Has Implications For Canadian Subsidiaries, Foreign-Owned Parents

The Supreme Court of Canada has issued a decision in a case called Chevron Corp. v. Yaiguaje that has implications for large multi-national corporations with subsidiaries in Canada.

The effect of the decision is to open the door to ignoring the separate legal personality of a local subsidiary and put its assets at risk in order to satisfy a judgment obtained against its foreign parent corporation in a foreign jurisdiction. 

The decision is therefore a possible victory for foreign plaintiffs who are being thwarted in their enforcement efforts by complex corporate structures that shield assets from them under the legal fiction of separate corporate personalities.

The decision concerns creditors who obtain judgment in another country but who are unable to locate assets to satisfy the judgment debt in that jurisdiction.  If the debtor has assets in Canada (or is suspected of having assets), the creditor seeks Canadian judgment on the same terms as the foreign