However, the Znamensky case also reinforces a number of key principles relating to enforceability of arbitration clauses under the principles of contractual primacy and deference to party autonomy in alternative dispute resolution.
The facts are straightforward. The defendant company, Donaldson International Livestock Ltd. (“Donaldson”)a Canadian pig producer, agreed to sell 8,505 pigs to the plaintiff corporation, Znamensky Selekcionno-Gibridny Center LLC (“Znamensky”) a Russian agro-industrial company. A dispute arose over the health of the pigs and Znamensky invoked the arbitration clause in the contract of purchase and sale which provided for an arbitration to proceed before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (the “ICAC”) in Moscow. Donaldson refused to participate in the arbitration on the ground that the chief executive officer of the Russian company had threatened to kill Donaldson’s chief operating officer who, understandably, was therefore unwilling to travel to Moscow – as were other witnesses. Donaldson commenced an action in Ontario against Znamensky and sought an anti-suit injunction to stop the arbitration from proceeding in Moscow, while Znamensky sought an order staying the action. The motion judge dismissed the motion for an anti-suit injunction and granted a stay of the Ontario action.
The Court of Appeal for Ontario dismissed Donaldson’s appeal. Armstrong, J.A., writing for the unanimous panel, noted that the originating motion judge, Justice Gans of the Ontario Superior Court of Justice, correctly relied upon article 8 of the International Commercial Arbitration Act, R.S.O. 1990, Chapter I.9 which provides:
8. A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
Armstrong, J.A. agreed with Gans, J.’s approach in analyzing the evidence of the alleged threats to kill Mr. Donaldson, and his application of the “strong cause” test set forth in the Supreme Court of Canada decision in Z. I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27 (CanLII),  1 S.C.R. 450 at para. 20.
The arbitration proceeded in Moscow on January 17, 2008 and April 17, 2008, in absentia, despite Donaldson having served and filed its notice of appeal from the order of the motion judge at the end of December 2007, and requesting the ICAC to adjourn the arbitration pending the appeal. On March 6, 2008, the ICAC panel awarded Znamensky judgment in the amount of U.S. $1,234,416.65 in damages and U.S. $26,205.28 as compensation for the arbitration fee. On May 13, 2008, the ICAC panel awarded Znamensky a second judgment against Donaldson for U.S. $424,732.94 in damages and U.S. $9,006.21 as compensation for the arbitration fee paid by Znamensky.
Znamensky’s then moved before Pitt, J. of the Ontario Superior Court of Justice, for enforcement of the two foreign arbitral awards in its favour made by the ICAC in Moscow, Russia against Donaldson. Justice Pitt at the outset acknowledged that his judicial “hands were tied” by the Court of Appeal’s thorough reasoning on the procedural and substantive issues, noting:
 Because of the unusual history of the case outlined hereafter, I heard the applicant first but afforded the respondent the right (as moving party) to reply.
 Since the substance of this proceeding has already been to the Court of Appeal, I shall, out of an abundance of caution, recite the facts verbatim from the Reasons for Judgment of Armstrong J.A. speaking for that Court, rendered on December 23, 2008…”
 Notwithstanding the many and careful arguments of both counsel, it seems to me that the real issue to be decided on this motion and application is the practical significance of the Court of Appeal’s observations in its reasons that:
 Should Znamensky take steps to enforce its arbitral awards against Donaldson in the Ontario courts, then it would seem to me that Donaldson should be free to resist the enforcement of those awards on whatever basis it chooses, subject to the ruling of the presiding judge. In my view, the issue of enforcement must, at this stage, be dealt with at first instance and not in this court.
 The request in (i) above for a declaration that an arbitral award not be recognized in Ontario is beyond the scope of the arbitration clause. However, this issue will more properly arise when steps are taken to enforce the award in Ontario.
 Donaldson uses these observations to bolster its argument that nothing that has transpired in the prior proceedings fetters the discretion of this Court to revisit the issue of the alleged threats and any other issue, in determining whether the award should be enforced in Ontario. He cites some provisions of Article 36 of the Model Law of the International Commercial Arbitration Act R.S.O. 1990, C.I. 9 that provides:
Article 36. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only:
(a) at the request of the party against whom it is invoked, if that party furnishes to the competent court where recognition or enforcement is sought proof that:
(i) a party to the arbitration agreement… was under some incapacity; or
(ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(b) if the court finds that:
(ii) the recognition or enforcement of the award would be contrary to the public policy of this State;
and submits that those grounds set the parameters for the Courts inquiry.
 In response to Znamensky’s argument that Issue Estoppel applies to the threat issue, Donaldson submits that the first two preconditions for Issue Estoppel have not been met since the issue of whether there was a threat has never been decided and the decision made by Gans J. was not a final decision. He also argues that courts have exercised a discretion not to apply Issue Estoppel where a failure to exercise such discretion will work a real injustice, e.g. in situations of procedural unfairness akin to fraud, underhanded or improper conduct, circumstances akin to a denial of natural justice, and unfairness deserving of special considerations.
 I agree with the submissions of Znamensky that the raising of the issue of the threats is prohibited by the doctrine of Issue Estoppel, and what is more a contrary finding would be in the nature of an affront to the hierarchical structure of the Ontario courts.
By isolating the Court of Appeal’s observations in paragraph 30 and 32 of its reasons [paragraph 11 of these reasons] Donaldson disregards the most fundamental aspects of the Court of Appeal’s reasons. The Court of Appeal said:
The time for Donaldson to have requested a viva voce hearing with respect to the alleged threats was when the parties were before Gans J.
To introduce the subject now would be to fly in the face of the rule in Henderson v. Henderson which prohibits the raising of issues that were properly the subject of earlier litigation between the parties.
The Court of Appeal also said that the proper jurisdiction in which to raise the issue of the alleged threats was before the ICAC in the Russian arbitrations.
The Court of Appeal made it clear that the exclusive jurisdiction for the determination of Donaldson’s tort claim against Mr. Demin with regard to the alleged threats was the ICAC.
 I also agree with the submissions of Znamensky that the earlier mentioned paragraphs 30 and 32 of the Court of Appeal’s decision meant no more than that the proceeding to enforce an arbitral award must commence in the trial division of the Court, and not in the Court of Appeal, and will be subject to all laws and regulations governing proceedings at first instance.
 Finally, Donaldson has failed to recognize the significance of the finding of Gans J., endorsed inferentially by the Court of Appeal, that the offer made by Znamensky prior to the injunction motion proceeding, for an alternate site for the arbitration, and for special accommodation for witness testimony, virtually eliminated the alleged threats as a ground for vitiating the arbitral proceeding. This finding by itself is sufficient to dispose of this proceeding in favour of Donaldson.
 Since the alleged threats are the only real issue in this proceeding, I can see no basis for granting the relief sought by Donaldson in its motion. Donaldson’s motion is dismissed.
 The application of Znamensky is granted.
Three points of interest:
1) Primacy of an arbitration clause to resolve contractual disputes:
Armstrong, J.A. upheld the following contractual arbitration clause, which read as follows:
Any dispute, controversy or claim, which may arise out of or in connection with the present contract (agreement), or the execution, breach, termination or invalidity thereof, shall be settled by the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, in accordance with its Rules and Regulations. The Contract is governed and construed in accordance with the material law of Russian Federation.
The place of arbitration shall be Moscow, Russia. The language to be used in the arbitral proceedings shall be Russian…
2) The Applicable Law is likely the CISG:
Neither Pitt, J, nor Armstrong, J.A. expressly discuss the applicable law; (albeit the ICAC decision is not yet accessible online). However, I would venture to wager that the CISG was applied by the ICAC arbitral panel. The choice of law clause reads:
“The Contract shall be subject to the Law of Russian Federation.”
Nothing appears to turn on the applicable law, but it would have been helpful to note that on the issue of “foreign law” under the “strong cause” test, this factor would have been neutralized, as the CISG is not foreign law if both parties are from Contracting States and the contract is otherwise governed by the CISG.
3) The inherent risk of refusing to participate in the arbitration hearing
According to the Court of Appeal, the proper forum for adjudicating the issue of death threats was before the originating motion judge hearing the anti-suit injunction motion:
“ In my view, the time to have requested the trial of the issue concerning the death threats was when the parties were before the motion judge. The case was argued on the basis of a paper record and the motion judge found that it fell short of establishing that the threats against Mr. Donaldson were made. The motion judge’s reference to a viva voce hearing related to the arbitration hearing, which Donaldson chose not to attend. It was not up to the trial judge to order that viva voce evidence be tendered before him in the absence of a request from counsel. It is the counsel who presents the case, not the trial judge.”
With respect to the request for an interim injunction prohibiting any steps to enforce the arbitral awards , Pitt, J. at para. 9 of his reasons also cites the Court of Appeal’s reasoning:
“ In my view, it is not appropriate for this court to deal with the request to prohibit the enforcement of the arbitration award. Although the request is included in the statement of claim, this was not a claim made before the motion judge, and he made no order in respect of it.
 Should Znamensky take steps to enforce its arbitral awards against Donaldson in the Ontario courts, then it would seem to me that Donaldson should be free to resist the enforcement of those awards on whatever basis it chooses, subject to the ruling of the presiding judge. In my view, the issue of enforcement must, at this stage, be dealt with at first instance and not in this court.”
Finally, on the issue of whether the stay of the action should be set aside, again, Justice Pitt defers to the appellate court, stating:
“ The Court of Appeal said:
 Counsel for Donaldson submits that the motion judge erred in granting a stay of the action because the statement of claim requests relief that is beyond the scope of the arbitration clause in the contract of purchase and sale. In particular, he alleges that the following claims are beyond the jurisdiction of an arbitration panel established under the arbitration clause: (i) a declaration that an arbitral award should not be recognized or enforced in Ontario due to the misconduct of the respondent; and (ii) damages for the tort of intimidation. Although counsel, in his factum, did not include the additional claim for the tort of intentional interference with economic relations and injurious falsehood by causing Donaldson to be “blacklisted” in Russia, I assume this was an oversight.
 The request in (i) above for a declaration that an arbitral award not be recognized in Ontario is beyond the scope of the arbitration clause. However, this issue will more properly arise when steps are taken to enforce the award in Ontario. The fact that the claim is included in the statement of claim is not a basis for lifting the stay.
 Counsel for Donaldson argues that the arbitration clause in the agreement is restricted to contractual disputes between the parties and does not apply to the tort claims against Znamensky. He further submits that the arbitration clause does not apply to the tort claim of intimidation against Mr. Demin who is not a party to the agreement.
[36} In this case, the arbitration clause is extremely broad – it includes any “dispute, controversy or claim, which may arise out of or in connection with the present contract …” Given the direction that the courts have been taking in respect of the approach to arbitration clauses, I am satisfied that this clause is broad enough to include virtually all of the claims advanced in the statement of claim. The fact that one of the claims is against a non-party to the agreement, Mr. Demin, is not sufficient to oust the ICAC and Moscow from hearing these matters when the entire focus of the action relates to issues arising out of the contractual relations of the principal parties. “
“24Gentlemen have I left anything out. Because I did this in very much a hurried fashioned.
25Submission by counsel.
THE COURT: I dealt with the jurisdiction issue, have I?
26Submissions by counsel.
THE COURT: Well then the cross motion is permitted, I take it, part of it is permitted to at least dismiss the motion for an anti-suit injunction and any other relief that might be fashioned.
27 Submission by counsel.
THE COURT: Here is what I ask you to do. I have got seventeen feet of material to read tomorrow. You craft out on consent what you guys think is the appropriate endorsement to the motion records proper. Because I misunderstood what Mr. Borswell said. I thought he said that he was bringing a Pompey type motion for strong cause, to stay the Arbitration proceedings, which I take to be different than the anti-suit injunction. So if I have mis-spoken myself, then we will have to revisit it. So I suggest that that is what you guys do. All right.
28… Further discussions with counsel.
29… Discussion re costs.“