The Alberta Court of Appeal handed down its decision today April 7, 2009 in the case of BG International and Canadian Superior Energy. Canadian Superior Energy is the appellant and went to court to have the lower court decision overturned, in which BG sought to have the court appoint a Receiver to administer the flow testing on Block 5(c).

1) On the matter of Canadian Superior's first contention that the lower court erred in appointing a Receiver as there was little or no risk that Maersk would remove the rig for non payment the court ruled:

[8]"The finding of a risk of removal of the trial judge is supported by the record, and does not warrant appellat interference."

2) On the matter of Canadian Superior's second contention that Canadian Superior was denied its basic rights, was not allowed to cross examine the respondent's affadavit, and was not given time to file its own affadavit, the court ruled:

[9]"While there is substance to this complaint, it is not uncommon for interim receivers to be appointed on an ex parte basis, and there were remedies available to review or withdraw the order granted. Given the urgency found by the chambers judge, the method of proceeding was not, in this case, fatal. We do not find that Article 18.2(C)(9) of the arbitration provisions, which enables electronic hearings, effectively prohibits ex parte procedures."

[10]"The appellant was asked to suggest terms of which an adjournment might be granted, but persisted in its request for an adjournment that did not address the respondent's legitimate concerns. The chambers judge was entitled to conclude that the requested adjournment could itself have led to irreparable damage to all parties."

[11] "We note that in the weeks that have followed since the granting of the order, the appellant has still not filed an affadavit in reply. Any such evidence could have been used in an application to set aside or vary what was similar to an ex parte order, it could have been used on the stay application, and it would likely have been admitted on this appeal. We conclude that the appellant's objections are to some extent tactical. Even though the record may be incomplete, many of the key facts are not in dispute, and the key documents are included. A fair picture of the situation can be obtained from this record, supplemented as it has been by counsels' submissions."

3) On the matter of Canadian Superior's third contention that Canadian Superior Energy was seriously prejudiced by BG's having the receiver appointed the court ruled:

[13] "....... The chambers judge found that the appellant had been commingling joint venture funds, and that the respondent had a reasonable concern about the protection of future advances. Unlike in most receivership cases the funds advanced under this enhanced security are to be used to pay other creditors, and would not further subordinate their interests. The security of the receiver's certificates may merely be parallel to that already provided for in the operating agreement. While the appointment of the receiver does arguably have the effect identified by the appellant, that does not make the receivership order unreasonable in the circumstances."

[4] On the matter of Canadian Superior's fourth contention that BG should have posted an undertaking to pay damages if it had turned out that their allegations were false the court ruled:

"We note that the respondent has paid significant sums of money on behalf of the appellant, and that the appellant would likely have a right to set-off if it obtains an award of damages from the respondent. An undertaking would add little."

http://www.albertacourts.ab.ca/jdb/2...

The Court Of Appeal of Alberta in summary denied Canadian Superior Energy's appeal on all of its grounds. So it appears that Admiral Noval in his haste to turn his flagship HMCS Victory into the wind to get into position to fire a second volley at HMS Intruder, failed to take proper actions to avoid the submerged shoal on the Victory's port side, which was seen by all aboard, and he ran Victory aground thereby giving HMS Intruder a clear line of fire. Stay tuned. The battle of Trindad isn't over yet.

Best Wishes; Scott