Executive Summary: Key Legal and Evidentiary Issues

• Validity and enforceability in Québec of an ICC arbitral award rendered abroad ordering Magil Construction Corporation to pay approximately CAD 35 million to Razel-Bec S.A.S. and Razel Cameroun S.A.
• Threshold for granting a stay of recognition and enforcement under article 654 C.p.c., namely whether the annulment proceedings before the Paris Court of Appeal raise a serious, non-frivolous challenge to the award.
• Impact of the State of Cameroon’s absence from the arbitration on jurisdiction, access to justice, and the completeness of the dispute resolution, given Magil’s role as “agent” of the State under the construction contracts.
• Interpretation of contractual provisions designating Magil as “Agent de l’Administration” and allocating responsibility for payments to subcontractors and suppliers under the public works contracts HF-02 and HF-03.
• Financial evidence concerning Magil’s liquidity, intra-group advances within the Fayolle group, and whether its claimed impecuniosity should limit or avoid an order to post security.
• Calibration of the quantum of security (cautionnement) so that it reflects the seriousness of the annulment action and protects the award creditors without effectively forcing premature execution of the full arbitral award or depriving Magil of its ability to pursue the annulment.

Factual background

The dispute arises out of large-scale public construction projects in Cameroon undertaken in preparation for major African football tournaments. Three main projects were involved: the rehabilitation and extension of the Stade de la Réunification and related works in Douala (Projet Bépanda), the rehabilitation of the Douala East access road and related works (Projet La Pénétrante / LPE), and the completion of the Olembé sports complex (Projet Olembé / COSO). These projects were carried out under markets, purchase orders, and contracts between Razel-Bec S.A.S. and Razel Cameroun S.A. on the one hand, and Magil Construction Corporation and the State of Cameroon on the other. Razel entities acted as contractors or subcontractors supplying works and services on these public infrastructure projects, while Magil served as a central contracting counterparty and intermediary vis-à-vis the State of Cameroon. Disputes emerged over payments allegedly owed for works performed and services rendered, leading to arbitration before the International Chamber of Commerce (ICC), seated outside Québec and administered by the ICC International Court of Arbitration. In that arbitration, Razel-Bec S.A.S. and Razel Cameroun S.A. advanced claims against Magil for substantial unpaid amounts, culminating in a lengthy final award. The ICC tribunal issued a 140-page award with 361 paragraphs, ultimately holding Magil liable to pay approximately CAD 35,000,000 to the Razel entities. This award is the “Sentence” that Razel sought to have recognized and enforced in Québec.

Procedural history and arbitral proceedings

In the course of the ICC arbitration, Magil challenged the tribunal’s jurisdiction at an early stage. It argued that the ICC lacked competence and that the State of Cameroon, as the public owner and “administration” under the contracts, needed to be present in the proceedings for the dispute to be fully and fairly adjudicated. Magil described itself as the “agent de l’administration,” asserting that it acted on behalf of the State of Cameroon, which should therefore be joined or otherwise made party to the arbitration. The ICC Court, however, decided that the arbitration would not proceed against the State, and the arbitral tribunal subsequently rejected Magil’s objections to its jurisdiction. Those jurisdictional challenges—and the tribunal’s reasons for rejecting them—are detailed across numerous paragraphs of the award. Magil maintained that this approach deprived it of effective access to a judge and prevented the tribunal from addressing the entire dispute, including the State’s role and potential liability. After losing on jurisdiction and on the merits in the ICC arbitration, Magil was ordered to pay Razel roughly CAD 35 million. In response, Magil commenced annulment proceedings before the Paris Court of Appeal, the court with supervisory jurisdiction over the award. In its annulment application, Magil advanced three main grounds: first, that excluding the Republic of Cameroon from the arbitration undermined its right of access to a judge; second, that the arbitral tribunal wrongly assumed jurisdiction over Magil and should have declined jurisdiction over Razel’s claims in a single consolidated arbitration; and third, that the tribunal improperly relied on the State of Cameroon’s responses to the intervention request despite the State not being a party to the arbitration, violating principles of contradiction and equality of arms. The Québec Superior Court, in the judgment at issue, notes that these grounds remain central to the dispute and do not appear frivolous, which is significant for the stay analysis.

Contractual framework and key clauses

A central evidentiary element in the Québec proceedings consisted of the underlying contracts between Magil and the State of Cameroon, particularly contracts HF-02 and HF-03. In these contracts, the State of Cameroon is identified as the “Autorité contractante ou l’Administration,” represented by the Minister of Sports and Physical Education, while Magil Construction Corporation is described as the “Cocontractant.” Critically, the contracts define Magil’s role as “Agent de l’Administration” when it provides services as an agent, following the Administration’s instructions and discharging the Administration’s obligations within limits set out in article 3.7. This agency language sits at the heart of Magil’s argument that the State’s presence in the arbitral proceedings was indispensable to resolving the dispute over payments to subcontractors and suppliers. The contracts also contain specific provisions on payments to subcontractors and suppliers, notably article 3.9. That clause requires that any advance payments to subcontractors and suppliers be backed by appropriate guarantees in accordance with Cameroonian regulations, and that all subcontractors and suppliers of goods to the project be similarly bonded. It further states that the guarantees provided by subcontractors and suppliers constitute a derogation from the definitive security and retention that the Administration might otherwise demand from Magil and its affiliates. These provisions reinforce the close financial and operational linkage between the State of Cameroon, Magil as agent and cocontractant, and companies such as the Razel entities who performed works or supplied services. They also provide factual support for Magil’s position that the State’s absence from the arbitration created an incomplete adjudication landscape, a point that feeds into the seriousness of the annulment challenge in Paris.

Stay of recognition and enforcement in Québec

Razel filed its Québec action on 16 September 2025, seeking recognition and enforcement of the ICC award as a foreign arbitral award. While that proceeding was pending, Magil filed its annulment application before the Paris Court of Appeal on 9 September 2025. Magil then brought a motion before the Québec Superior Court under article 654 of the Code of Civil Procedure, requesting a stay of the recognition and enforcement proceedings until the Paris court ruled on the annulment. Article 654 C.p.c. authorizes the Québec court to stay recognition and enforcement when an annulment or suspension application is already before the competent authority at the seat or under the applicable law of the award; it also permits the court to order security from the opposing party. The Superior Court analyzed the provision in light of the UNCITRAL Model Law and the New York Convention, as mandated by article 622 C.p.c. and related interpretive provisions. Drawing on prior Québec jurisprudence, the Court concluded that there is effectively one determinative criterion for granting a stay: whether the annulment recourse before the foreign court is sufficiently serious and non-frivolous. If that threshold is met, a stay is usually appropriate so long as other considerations do not counsel otherwise. Applying this standard, the Court held that Magil’s annulment grounds—relating to the exclusion of the State of Cameroon, jurisdictional objections, and alleged breaches of fundamental procedural principles—were serious and raised substantive questions. Consequently, it considered it appropriate to suspend the Québec recognition and enforcement proceedings until the Paris Court of Appeal, or any higher competent court, issued a final judgment on the annulment application. The result is that the ICC award, while still formally in existence, is treated as not yet binding for purposes of enforcement in Québec while the annulment process is outstanding.

Financial evidence and the security request

Parallel to Magil’s stay request, Razel applied for an order that Magil post security (cautionnement) in an amount equal to the full value of the ICC award, approximately CAD 35,000,000, subject to upward revision every six months. Razel sought to protect its position during the stay, arguing that Magil’s financial condition and intra-group transactions raised a real risk that funds could be moved or depleted while the annulment was pending. Magil countered that it was impecunious and that posting substantial security would compromise its ability to pursue the annulment. Evidence submitted to the Court included sworn declarations and the testimony of Sébastien Huynh, Chief Financial Officer of Fayolle Construction, a company linked to Magil and described as “la mère de la mère” of Magil. The financial statements indicated that Magil’s treasury position was negative by about CAD 10.4 million, but they also showed significant advances to its ultimate parent, Fayolle, in the amount of over CAD 11.8 million, as well as payments of administration fees totaling CAD 2.5 million. Mr. Huynh explained that intra-group advances within the Fayolle group, including between Magil and its related companies, formed a substantial component of the group’s financing structure and served as temporary financing sources alongside bank credit. The Court drew the inference that, despite the negative cash position shown “on paper,” Magil’s financial situation was not as dire as alleged. The pattern of advances and intra-group transfers suggested that the group, taken as a whole, had access to significant resources and could support Magil in posting a reasonable security without crippling its operations or its ability to maintain the annulment proceedings.

Calibrating the amount of security

The central question for the Court was not whether to order security at all, but how to calibrate the amount fairly in light of the parties’ competing interests. On the one hand, granting security equal to the full amount of the award, as Razel requested, risked transforming the security mechanism into a de facto execution of the award notwithstanding the pending annulment in Paris. This would undermine the logic of the stay and the deference owed to the foreign supervisory court, as well as impose a potentially disproportionate financial burden on Magil. On the other hand, Magil’s proposal to post only CAD 1,000,000 was deemed insufficient to reflect the seriousness of its annulment challenge and to offer meaningful protection to Razel against dissipation of assets or further intra-group fund transfers. Reviewing the limited jurisprudence on security under article 654 C.p.c., the Court emphasized two principles: the amount of security should evidence the seriousness of the challenging party’s démarche, and it should not be so high that it effectively strips that party of the means to pursue its rights. In light of the intra-group advances and the overall financial evidence, the Court concluded that Magil could reasonably be expected to provide a security equal to 10% of the award. It therefore fixed the amount at CAD 3,500,000, to be posted within 30 days in Canadian currency and maintained for the full period of the stay.

Outcome and successful party

In its dispositive portion, the Québec Superior Court grants Magil’s motion to stay, orders that Razel’s application for recognition and enforcement of the foreign arbitral award be suspended until a final judgment is rendered by the Paris Court of Appeal (or any higher competent court), and partially grants Razel’s motion for security by ordering Magil to provide a CAD 3,500,000 cautionnement. No court costs are awarded, as the judgment is issued without costs. From a broader perspective, the underlying ICC arbitration found in favor of Razel-Bec S.A.S. and Razel Cameroun S.A., awarding them approximately CAD 35,000,000 against Magil. In contrast, in this Québec judgment, Magil is the procedurally successful party on the stay issue, having obtained the suspension of recognition and enforcement, while Razel secured a partial success through the order requiring Magil to post CAD 3,500,000 in security. Taken together, the total monetary amounts ordered in favor of the award creditors consist of the arbitral award of about CAD 35,000,000 (which remains subject to the pending annulment) and the Québec-ordered security of CAD 3,500,000 to safeguard their position during the stay, with no additional quantified costs or damages awarded in the Québec proceeding itself.