TORONTO — An energy company must immediately pay about $14 million to another company even as it seeks to fight the award before Canada’s

Alectra Utilities loses stay bid; must pay Solar Power $14M right away

Alectra Utilities loses stay bid; must pay Solar Power $14M right away

Alectra Utilities loses stay bid; must pay Solar Power $14M right away

Alectra Utilities loses stay bid; must pay Solar Power $14M right away

Alectra Utilities loses stay bid; must pay Solar Power $14M right away
Alectra Utilities loses stay bid; must pay Solar Power $14M right away
  • 2019-04-24 19:00:05 27 days ago
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  • By: financialpost.com
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TORONTO — An energy company must immediately pay about $14 million to another company even as it seeks to fight the award before Canada’s highest court, the Ontario Court of Appeal ruled on Wednesday.

In dismissing a stay of an earlier ruling, the Court of Appeal decided that allowing Alectra Utilities to hold off paying what it owes Solar Power Network would not serve the interests of justice.

The issue arose in September 2016 when Alectra cancelled a financing agreement with Solar Power for the construction of solar-power projects in Ontario. Under a contract in which they had agreed to binding arbitration, Solar Power asked an arbitrator to award them $19.5 million in damages. Court records show the arbitrator concluded Alectra had terminated the deal illegally, and awarded Solar Power $12.3 million for lost profits.

A lower court judge set aside the award on the basis that it might have been unreasonable or even wrong. Solar Power appealed.

Earlier this month, the Court of Appeal found the parties had agreed under their deal to final and binding arbitration, which prevented one of them from taking the case to the courts except in the narrowest of circumstances.

As a result, the court found, a judge had been wrong to set aside the arbitrator’s award on the basis that it might have been unreasonable or even wrong. The court ordered Alectra to pay the award plus other costs.

Alectra went back to the Court of Appeal to ask for an urgent stay of the ruling pending the outcome of its efforts to have the Supreme Court of Canada weigh in.

While Appeal Court Justice David Paciocco agreed Alectra had a reasonable case and would suffer some real damage, he denied the stay.

“Alectra has earnings and assets in the billions,” the Appeal Court ruled. “While there is a modest risk that, if the stay is denied, Alectra may end up losing money that it could prove to be entitled to, the intensity of that risk pales next to the risk to (Solar) if the stay is granted.”

In his reasons, Paciocco noted that Solar Power was having serious cash-flow problems that were threatening its viability.

“Its creditors, owed approximately $7 million, are standing down in the expectation that (Solar) can collect the damages this court has determined (it) is entitled to,” Paciocco wrote. “If this court’s decision is stayed, (Solar’s) continued viability will be placed at increased risk by those creditors.”

Enforcing the court’s decision would solve the liquidity problems that are preventing Solar from competing for lucrative contracts, he said.

“It is not too much to say in these circumstances that there are existential risks to (Solar) if a stay is granted,” Paciocco said. “If those risks materialize and (Solar) does ultimately prove to be entitled to the damages award this court has upheld, the damage that the stay of enforcement will cause cannot readily be undone.”

Alectra will also have to pay another $7,500 to Solar for its failed stay motion.

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Alectra Utilities loses stay bid; must pay Solar Power $14M right away

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