Executive Summary: Key Legal and Evidentiary Issues

• Enforcement of a Chilean arbitral award was sought in Ontario against Webuild, a non-party to the arbitration, raising whether a foreign award can be enforced against a third party whose liability is disputed.
• Central liability dispute turned on the interpretation of the Italian Partial Spin-Off Agreement and the Concordato restructuring, and whether Astaldi’s arbitral debt to Sociedad was transferred as part of the “Continuity Business.”
• The Court accepted that liability and enforcement were severable, holding that Webuild’s alleged assumption of Astaldi’s liability was a threshold issue that must be decided before enforcement can be considered.
• Italian bankruptcy and corporate law, Italian-language documents, and Italian witnesses made Italy the clearly more appropriate forum to decide liability under the forum non conveniens doctrine.
• The Ontario Court of Appeal upheld the temporary stay of Sociedad’s Ontario enforcement application under s. 106 of the Courts of Justice Act, pending a liability determination by the Italian courts.
• As the successful party on appeal, Webuild obtained a costs award of $15,000 (partial indemnity, all-inclusive) from the Court of Appeal, with no enforcement of the arbitral damages ordered in Ontario.

Background and parties

Sociedad Concesionaria Metropolitana de Salud S.A. (Sociedad) is a Chilean company engaged in the construction and administration of public works concessions. Astaldi S.p.A., later renamed Astaris S.p.A., was an international construction and engineering group based in Italy, with a Chilean branch known as Astaldi Sucursal Chile (ASC). Webuild S.p.A. is a large Italian construction company, incorporated under Italian law, headquartered in Italy, and listed on the Milan Stock Exchange. The motion judge found that at all material times, Astaldi and Webuild were separate corporate entities with different boards of directors and were competitors in the construction and engineering market, notwithstanding Webuild’s temporary 65% stake in Astaldi as part of Astaldi’s restructuring.

In 2015, Sociedad contracted with ASC (and only ASC) to build a hospital in Chile. The relationship deteriorated as the project suffered serious delays and Astaldi’s financial circumstances weakened. These commercial and financial difficulties formed the backdrop for later arbitration and cross-border insolvency and enforcement issues.

The Chilean hospital contract, termination, and arbitration

The 2015 construction contract between Sociedad and ASC governed the design and construction of a hospital in Chile. By September 2018, ASC’s performance had slowed, and Astaldi stopped making payments to subcontractors. On January 2, 2019, Sociedad terminated the contract because of the delays and non-payment. Both parties then invoked the contract’s dispute resolution mechanism and commenced an arbitration proceeding in Chile.

Only Sociedad and Astaldi/ASC were parties to the Chilean arbitration; Webuild had no role in that process. On December 30, 2021, the Chilean arbitrator awarded Sociedad substantial damages against Astaldi. The arbitrator fixed the amount at CAD $188,162,659.94, with the appellate courts in Chile later upholding Astaldi’s liability but varying the quantum. The award remains outstanding and unpaid, and the Ontario decision does not specify the final adjusted amount. Critically, nothing in the Chilean proceedings determined whether Webuild, as a later acquirer of certain Astaldi business segments, was also liable for this arbitral debt.

Italian Concordato restructuring and division of Astaldi’s business

While the Chilean project was unraveling, Astaldi had already taken steps to restructure its global operations. On September 28, 2018, it commenced a major insolvency restructuring in Italy under the concordato preventivo con continuità aziendale (Concordato). The Concordato, akin to a Companies’ Creditors Arrangement Act-type process, aimed to avoid liquidation and preserve operating value for stakeholders. Astaldi’s Concordato was one of the largest and most complex in Italian history, involving total debt of approximately EUR 3.598 billion, including about EUR 3.4335 billion in unsecured claims.

Within the Concordato, Astaldi structured its affairs into two principal segments. The first consisted of “Earmarked Assets,” primarily concession-type and related assets destined to be transferred into a Patrimonio Destinato for liquidation in favour of unsecured creditors. The second consisted of the “Continuity Business,” encompassing Astaldi’s ongoing construction and engineering operations (the Patrimonio in Continuità), intended to continue as a going concern. The restructuring plans dividing the business in this way were approved in mid-2020, and the Concordato was fully implemented by July 28, 2021, when the Italian court closed the proceedings.

Parallel to these developments, ASC initiated Chilean Reorganización proceedings in February 2019 under Chilean insolvency law. Astaldi sought and obtained authorization from the Rome Bankruptcy Court to advance a separate reorganization proposal for ASC in Chile. In its application to the Italian court, Astaldi allegedly emphasized that Sociedad’s debt would be treated as intra-group and subordinated under Chilean law, suggesting it would not be centrally addressed in the ASC reorganization plan.

The Partial Spin-Off Agreement and the disputed transfer of liabilities

Following the completion of the Concordato, Webuild acquired Astaldi’s Continuity Business. On July 29, 2021, Astaldi and Webuild executed a Partial Spin-Off Agreement, governed by Italian law. Under this agreement, Astaldi’s Continuity Business was spun off and assigned to Webuild, while the Earmarked Assets remained associated with Astaldi/Astaris and its creditors.

The key operative provision of the Partial Spin-Off Agreement provided that, as a result of the spin-off, all of Astaldi’s equity investments, capital assets, legal relationships (including employment relationships), and liabilities “relating solely to the Spun-Off Assets” were to be assigned to Webuild, as part of the implementation of the Concordato. Sociedad argued that the liabilities associated with the Chilean hospital project, and by extension the Chilean arbitral award, formed part of those liabilities and thus were assumed by Webuild when it took over the Continuity Business. Webuild disputed that interpretation, maintaining that the arbitral debt was either an unsecured or subordinated obligation that was not transferred under the Partial Spin-Off Agreement and remained with Astaldi/Astaris.

This contractual allocation of liabilities under Italian insolvency and corporate law lay at the heart of the Ontario litigation. The case turned not on traditional insurance policy terms but on the interpretation of a corporate “policy-type” instrument—the Partial Spin-Off Agreement—within the framework of the Italian Concordato, and whether that instrument transferred Astaldi’s arbitral liability to Webuild.

The Chilean award and Sociedad’s enforcement campaign

After obtaining the arbitral award in Chile, and with Astaldi’s restructuring completed in Italy, Sociedad attempted to collect through multi-jurisdictional enforcement efforts. In Ontario, Sociedad brought an application in 2023 to recognize and enforce the Chilean arbitral award, not against Astaldi (the judgment debtor) but against Webuild. The legal theory was that, by virtue of the Partial Spin-Off Agreement and the Concordato, Webuild had succeeded to Astaldi’s Chilean project liabilities and thus was effectively responsible for paying the arbitral award.

Webuild resisted this application on several grounds. First, it denied that it had assumed any liability for the Chilean award under Italian law or under the Partial Spin-Off Agreement. Second, it argued that its alleged liability had never been adjudicated anywhere and was a threshold issue that must be determined before any enforcement proceedings could properly proceed. Third, it invoked forum non conveniens, contending that Italy—not Ontario—was the appropriate forum to decide whether the Concordato and Partial Spin-Off Agreement had transferred Astaldi’s arbitral liability.

At the same time, Sociedad was pursuing enforcement proceedings against Webuild in Quebec, Delaware, and Connecticut. The Delaware court dismissed the enforcement action there, and Sociedad appealed that dismissal. Meanwhile, Webuild initiated its own proceeding in the Court of Rome in March 2024, seeking a declaration that the debt to Sociedad under the Chilean arbitral award was not transferred to Webuild by the Partial Spin-Off Agreement and remains with Astaldi/Astaris, and that the arbitral award is not enforceable against Webuild. Both Astaris and Sociedad were joined as respondents in the Italian proceeding, squarely placing the liability issue before the Italian courts.

The motion judge’s decision: severing liability from enforcement and staying the Ontario proceeding

In response to the Ontario application, Webuild moved before the Superior Court of Justice to stay the proceedings, arguing lack of jurisdiction and, in the alternative, forum non conveniens. The motion judge focused on whether the alleged liability of Webuild for the arbitral award could properly be adjudicated in Ontario or whether it should be decided in Italy first.

Sociedad relied heavily on Chevron Corp. v. Yaiguaje and other recognition-and-enforcement authorities to argue that the Ontario court’s role was only to facilitate enforcement of an existing adjudicated debt, not to reconsider the underlying merits, and that forum non conveniens should not apply to enforcement actions. It also argued that Ontario courts have, in some instances, determined third-party liability at the enforcement stage, including in veil-piercing and alter-ego contexts.

The motion judge distinguished Chevron and similar cases. In Chevron, there was a clear “already-adjudicated obligation” against the party whose assets were targeted, and the issue was whether Ontario could enforce that obligation against a related company by piercing the corporate veil under Canadian law. In this case, Webuild was not a party to the arbitration, was not alleged to be Astaldi’s parent or alter ego, and denied any assumption of Astaldi’s debts. There was no adjudicated obligation binding Webuild; the very existence of any obligation was in dispute and depended on the interpretation of Italian law and the Concordato/Partial Spin-Off structure.

The motion judge therefore held that liability and enforcement were distinct and severable. Before Ontario could consider enforcement against Webuild, a prior, independent determination was needed on whether Webuild was liable at all for Astaldi’s arbitral debt. On the forum non conveniens analysis, applying the framework from Club Resorts Ltd. v. Van Breda, she concluded that Italy was clearly the more appropriate forum to determine this threshold liability question. She stressed that the Concordato and Partial Spin-Off Agreement were Italian-law creations; the relevant companies (Webuild and Astaldi/Astaris) were Italian; the core documents and witnesses were in Italy and predominantly Italian-speaking; and a proceeding was already underway in the Court of Rome directly addressing the same liability issue, while parallel enforcement actions in Quebec, Delaware, and Connecticut heightened the risk of conflicting decisions.

Exercising her discretionary power under s. 106 of the Courts of Justice Act, the motion judge granted a temporary stay of the Ontario enforcement application, pending the outcome of the Italian proceeding on liability. She held that the stay would avoid duplication of judicial and legal resources and reduce the risk of inconsistent judgments. As the successful party on the motion, Webuild received a costs award fixed by agreement at $200,000, payable forthwith.

Issues on appeal and the Court of Appeal’s reasoning

Sociedad appealed to the Court of Appeal for Ontario, arguing that the motion judge had misconstrued and misapplied the doctrine of forum non conveniens, erred in severing liability from enforcement, wrongly characterized the stay as temporary rather than effectively permanent, and imposed an unfair costs order payable immediately.

The Court of Appeal first addressed whether the order under appeal was final or interlocutory, because that determination affects the route of appeal. It held that an order granting a stay on forum non conveniens grounds is final for appellate purposes, as it terminates the Ontario proceeding even if the broader dispute continues elsewhere. The Court therefore confirmed its jurisdiction to hear the appeal as of right.

On the substance, the Court affirmed that the Chevron principle—that enforcement courts act in a facilitative role and forum non conveniens does not apply to straightforward recognition and enforcement actions—applies where there is an “already-adjudicated obligation” against the party whose assets are targeted. In this case, Webuild’s liability for the arbitral debt had never been determined; it was the central, live controversy. Thus, Ontario’s role, if it proceeded, would not be limited to facilitating enforcement but would require first adjudicating whether Webuild had any liability under Italian law. In that context, the use of forum non conveniens to decide where liability should be determined remained proper.

The Court of Appeal also agreed that prior cases on veil-piercing, alter-ego liability, or parent-company enforcement were distinguishable. Those cases typically involved related companies and the application of domestic law to extend an already adjudicated obligation to a closely associated entity. By contrast, there was no allegation that Webuild was Astaldi’s parent, alter ego, or part of the same corporate group in the relevant sense. Instead, the core question was whether, under Italian insolvency and corporate law, the Partial Spin-Off Agreement and the Concordato had transferred Astaldi’s liability to Webuild. That question was properly considered as an Italian-law liability allocation problem, not as a veil-piercing exercise under Ontario law.

Applying the Van Breda framework, the Court upheld the motion judge’s conclusion that Italy was clearly the more appropriate forum to decide Webuild’s liability. Italy had a strong real and substantial connection: the Concordato was administered there, the Partial Spin-Off Agreement was made and court-approved there, and Italian law governed the relevant rights and obligations. An identical proceeding need not exist in the foreign forum for forum non conveniens to operate; what mattered was that Italy had a genuine and substantial connection to the subject matter, and indeed there was an active Italian proceeding directly addressing the liability question.

On the characterization of the stay, the Court found no error in the motion judge’s treatment of it as temporary. Under the Hollinger test, a stay may properly be ordered pending resolution of another proceeding where that proceeding may substantially reduce or eliminate the issues in the stayed action or render it largely moot. The Italian proceeding could (i) establish that Webuild is liable for the arbitral debt, in which case Sociedad could return to Ontario (if necessary) seeking enforcement against Webuild’s assets, or (ii) determine that Webuild is not liable, in which case the Ontario enforcement application would be effectively moot. Because the outcome in Italy would materially affect or potentially eliminate the issues in Ontario, the stay was legitimately temporary and conditional on the foreign court’s determination.

The Court also rejected Sociedad’s claim of procedural unfairness regarding the costs order for the motion below. The joint email submitted to the motion judge clearly set out each party’s position on both quantum and timing of payment, and the judge was not obliged to invite further submissions. She was entitled to order that the agreed quantum of costs ($200,000) be payable forthwith to Webuild as the successful party on the stay motion.

Final disposition and amount awarded by this court

The Court of Appeal dismissed Sociedad’s appeal in its entirety. It confirmed that, where enforcement is sought against a non-party to an arbitration whose liability has not yet been adjudicated, an Ontario court may properly sever liability from enforcement, apply the forum non conveniens doctrine to the liability issue, and stay the enforcement proceeding pending a decision in the more appropriate foreign forum. Italy was held to be the clearly more appropriate forum to determine whether Webuild assumed Astaldi’s liability for Sociedad’s Chilean arbitral award, and Ontario’s role is therefore on hold until the Italian courts resolve that question.

As a result of this decision, Webuild remains the successful party at the appellate level. The only monetary award made by the Court of Appeal itself in this case is a costs order: the Court awarded Webuild partial indemnity costs in the amount of $15,000, all-inclusive, for the appeal. No damages or enforcement of the Chilean arbitral award were ordered by this court, and the precise final amount of the arbitral damages remains undetermined in this judgment.