Executive Summary: Key Legal and Evidentiary Issues

• The applicant, BMI, sought to set aside an international arbitration award under Article 34 of the UNCITRAL Model Law, while the respondent, Zillnk, sought recognition and enforcement of that same award.
   
• Procedural fairness was contested, with BMI arguing the Arbitrator ignored contractual terms and evidence regarding radio invoices.
   
• Jurisdictional objections were raised by BMI concerning the Arbitrator's orders for financial disclosure, audit rights, and alleged rewriting of the parties' contracts.
   
• Public policy arguments were advanced by BMI in an attempt to challenge the Award's enforceability.
   
• Evidentiary issues arose from BMI's non-disclosure of Telus payments and its production of a fabricated version of an IP Transfer Agreement.
   
• Interpretation of the Cooperation Agreement and Supplement Agreement, particularly concerning the transfer and survival of intellectual property rights, formed a central part of the dispute.
   

Facts of the case

This case arose from a dispute between Bluewaves Mobility Innovation Inc. (BMI) and Si Chuan Heng Wan Ke Ji You Xian Gong Si, doing business as Zillnk, following an international commercial arbitration administered by the ICDR in Toronto. Robby Liu, the CEO of Zillnk, and Tim Mao, the CEO of BMI, became acquainted in late 2020 or early 2021 and agreed to work together to expand Zillnk's operations in North America. Mao began working as an employee of Zillnk in April 2021, and after being approached by Telus about supplying Open Radio Access Network (ORAN) radios, proposed establishing a separate Canadian entity, initially called "Zillnk Canada" and later renamed BMI, to serve as Zillnk's representative in North America. On September 6, 2021, the parties executed the Cooperation Agreement, under which Zillnk would design, develop and manufacture "Principal Products" that BMI would market and sell, with the parties holding joint intellectual property rights (IPR) and Zillnk entitled to a fixed proportion of BMI's gross margins.

Between July 2022 and December 2023, Telus ordered and Zillnk supplied 550 FDD Radios directly to Telus, with invoices accumulating to USD $2,328,134 and CAD $1,333,233 by December 23, 2023 under a process in which BMI issued purchase orders to Zillnk and Zillnk invoiced BMI. Although Telus paid BMI over CAD $11,000,000, including more than CAD $7,400,000 for Zillnk-supplied products, BMI repeatedly told Zillnk that Telus had not paid. BMI also did not disclose that in July 2023 it had negotiated a Master Product Services Agreement (MPSA) with Telus, and instead told Zillnk that Telus was demanding a transfer of Zillnk's IPR to a Canadian entity. Relying on these representations, Zillnk executed the Supplement Agreement on August 11, 2023, transferring its IPR to BMI. BMI subsequently began working with an alternative manufacturer, Jabil Inc., under the "Jasper Project," and paid Jabil approximately $1 million while paying nothing to Zillnk. After Zillnk learned of this collaboration in December 2023, Mao purported to terminate the parties' relationship by email on February 10, 2024. Zillnk did not accept the termination but eventually commenced the Arbitration to recover the amounts it claimed were owed.

During the Arbitration, BMI sold the IPR to its majority shareholder, Titan Crest LLC, on March 26, 2025, which in turn sold the IPR that same day to AmpliTech, an American company, under an Asset Purchase Agreement (APA) in which AmpliTech agreed to pay USD $8 million in cash and shares. Neither BMI nor Titan Crest disclosed the existence of the Arbitration to AmpliTech. When Zillnk's counsel inquired about the transaction, BMI initially produced a fabricated version of the IP Transfer Agreement before withdrawing it once its counsel discovered the falsification.

Policy and legislative provisions at issue

The Arbitration and the applications before the court were governed by the International Commercial Arbitration Act (ICAA) and the UNCITRAL Model Law on International Commercial Arbitration. BMI applied under Article 34 to set aside the Arbitrator's Award, while Zillnk relied on Article 35(1), which provides that courts "shall recognize arbitral awards as binding and enforce them." Central to the dispute was section 2.8.2 of the Cooperation Agreement, which specified that if a customer pays for sample products, payment is due to the party that designed and manufactured them without profit-sharing with the other party. The Cooperation Agreement also permitted BMI discretion in setting prices for Principal Products while guaranteeing Zillnk a minimum gross margin, and it allowed termination for uncured material breaches after 30 days while providing that payment obligations would survive termination. The Supplement Agreement, executed in August 2023, purported to transfer Zillnk's "entire right, title and interest" in certain IPR to BMI, and its proper interpretation and relationship to the Cooperation Agreement became a key issue in both the Arbitration and the set-aside application.

Reasoning and analysis

Justice Black noted that the threshold for setting aside an international arbitration award under the Model Law is high, and that a reviewing court owes a high degree of deference to arbitral tribunals, intervening only rarely. On procedural fairness, BMI argued that the Arbitrator ignored the terms of the Cooperation Agreement in finding it liable for unpaid invoices, but the court found that the Arbitrator's conclusion followed from an appropriate weighing of competing evidence, including BMI's admission that it had been paid for certain radios without informing Zillnk. The court also accepted the Arbitrator's finding that BMI's invoicing structure was a bad-faith attempt to circumvent the Cooperation Agreement's terms. Regarding the Supplement Agreement, Black J. agreed with the Arbitrator's contextual interpretation that its effect was tied to the continuation of the Cooperation Agreement, such that termination of the latter also ended BMI's rights under the former; the court rejected BMI's argument that the transfer of IPR remained permanent regardless of the parties' ongoing relationship. On the expert evidence issue, the court found that the Arbitrator had considered the available technical evidence, notwithstanding limitations caused by BMI's own failure to produce material relating to the IPR. As to jurisdiction, the court held that the Arbitrator's remedy of financial disclosure, audit rights, and revenue-sharing was a reasonable response to BMI's unauthorized sale of the IPR rather than an act exceeding his authority, and that the Arbitrator had not "rewritten" the parties' agreements but had engaged in legitimate contractual interpretation. Finally, on public policy, the court found that BMI's arguments essentially repeated its contractual and jurisdictional submissions and fell well short of the high burden required to establish a public policy violation.

Ruling and overall outcome

Justice Black dismissed BMI's application to set aside the Award and granted Zillnk's application to recognize and enforce it. The court ordered BMI to pay Zillnk CAD $6,113,706 and an amount in Canadian currency sufficient to purchase USD $9,667,163, together with CAD $88,850 for reimbursement of ICDR administrative fees, plus interest at 5.3% per annum accruing from February 11, 2026. BMI was also ordered to provide quarterly revenue reports relating to sales using the disputed IPR, to allow Zillnk to audit its books once per year, to pay Zillnk 25% of the resulting "Disclosable Revenue," and to pay CAD $346,345.84 plus an amount sufficient to purchase USD $2,041,672.86 as reimbursement of Zillnk's legal costs from the Arbitration. Zillnk was also found entitled to its costs of the applications before the court, though the quantum of those costs was not determined in this decision; the parties were directed to attempt to agree on costs, with a process set out for further submissions if no agreement was reached.