Summary

35026

Sattva Capital Corporation (formerly Sattva Capital Inc.) v. Creston Moly Corporation (formerly Georgia Ventures Inc.)

(British Columbia) (Civil) (By Leave)

Keywords

None.

Summary

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Contracts — Interpretation — Finder’s fee agreement — Arbitration — Administrative law — Appeals — When, if ever, is the court hearing an appeal of an arbitral award bound by determinations made on the application for leave to appeal? — Where leave to appeal an arbitral award has been granted on a question of law, may the court disregard the arbitrator’s findings of fact in answering that question?

The applicant ("Sattva") introduced the respondent (“Georgia”) to a potential molybdenum mining deposit in Mexico, which Georgia ultimately purchased. Sattva and Georgia had entered into a Finder's Fee Agreement effective January 12, 2007. The parties agreed a finder's fee of $1.5 million U.S. was payable under the Agreement as a result of Sattva's involvement in introducing Georgia to the mining property but could not agree how the amount of the fee would be payable to Sattva. Georgia took the position that the finder's fee should be paid in shares valued at $0.70 each, while Sattva maintained the fee should be paid in $0.15 shares.

The matter proceeded to arbitration, and the arbitrator assessed damages in the amount of $4,140,000 against Georgia for breach of contract. The amount awarded was based on the arbitrator's conclusion there was an 85% probability the TSX Venture Exchange would, pursuant to its policies, have valued the finder's fee at $0.15 per share under the terms of the Agreement and that Sattva had lost an opportunity to sell those shares based on that value. The chambers judge denied Georgia's application for leave to appeal the award because it was his view that Georgia's grounds of appeal were not limited to questions of law alone, as required by s. 31(2) of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55. The British Columbia Court of Appeal overturned that decision, and granted leave to appeal on two issues of law regarding the interpretation of the Agreement. That appeal was dismissed. The British Columbia Court of Appeal allowed Georgia’s appeal of that decision, and granted an order that the finder's fee had been paid.

Lower Court Rulings

August 7, 2009
Supreme Court of British Columbia

S091139, 2009 BCSC 1079
Leave to appeal award of arbitrator denied
May 14, 2010
Court of Appeal for British Columbia (Vancouver)

CA037382, 2010 BCCA 239
Appeal allowed
May 6, 2011
Supreme Court of British Columbia

S103761, 2011 BCSC 597
Appeal dismissed
August 7, 2012
Court of Appeal for British Columbia (Vancouver)

CA039064, 2012 BCCA 329
Appeal allowed