Law360 Canada ( April 5, 2024, 2:28 PM EDT) -- Appeal by Eurobank Ergasias S.A. (Eurobank) and the Hellenic Ministry of National Defense (HMOD) from a judgment of the Quebec Court of Appeal which upheld in part a judgment rejecting Eurobank’s demand for payment under a letter of counter-guarantee. Bombardier Inc. (Bombardier) entered into a procurement contract with HMOD for firefighting amphibious aircraft. An offsets contract was also concluded under which Bombardier would subcontract some of the work associated with the aircraft procurement to Greek companies. Bombardier agreed to pay liquidated damages to HMOD if it did not fulfill its undertakings under the offsets contract. This was secured by a letter of guarantee with Eurobank in favour of HMOD. Bombardier arranged a corresponding letter of counter-guarantee issued by the National Bank of Canada (National Bank) in favour of Eurobank. A dispute arose under the offsets contract. Bombardier filed a request for arbitration under the rules of the International Chamber of Commerce (ICC). Although HMOD had undertook not to demand payment while the arbitration procedure was ongoing, it made repeated demands for payments to Eurobank. Bombardier sought and obtained orders from the Superior Court of Quebec and the ICC Arbitral Tribunal preventing HMOD from demanding payment until issuance of the final award. HMOD made a final demand for payment and Eurobank released the funds. The ICC Arbitral Tribunal released its final award and ruled that the offsets contract was null and void ab initio and that no liquidated damages were due by Bombardier to HMOD. The trial judge concluded that HMOD had acted fraudulently to obtain payment with full knowledge by Eurobank and enjoined the National Bank from paying Eurobank. The majority of the Court of Appeal allowed the appeal only to the extent of striking the order that HMOD comply with the final award. The question before the Court was whether fraud committed by HMOD under the letter of guarantee could be attributed to Eurobank as its own. Bombardier argued it could....