First Ontario Court Decision To Interpret Sanctions Against Russia Provides Guidance On "Deemed Control”
The Ontario Superior Court of Justice issued a ruling interpreting Canada's sanctions against Russia, specifically regarding the 'deemed control' test for non-listed entities. The court dismissed an oppression claim involving a company with ties to sanctioned Russian officials.
Why it matters
This decision provides critical legal precedent for how Canadian courts apply international sanctions to corporate ownership structures involving designated foreign entities.
In CLR Invest Ltd. v. Kondratiev, 2026 ONSC 3832 , the Ontario Superior Court of Justice (Commercial List) (Court) delivered the first Ontario decision to apply Canada's sanctions regime under the Special Economic Measures (Russia) Regulations ( Russia Regulations ).
The Court dismissed a claim of oppression against an Ontario corporation for suspending the director appointment rights of a shareholder owned by three senior officials of a designated entity.
The decision is the third civil case to apply the Russia Regulations in Canada and the first to consider the "deemed control" test in relation to an entity that is not owned by a designated entity.
UCT Research and Development Inc. (UCT) was an Ontario corporation developing a blood test to detect cancer.
The applicant, CLR Invest Ltd. (CLR), was a Maltese corporation that acquired a minority stake in UCT prior to Russia's full-scale invasion of Ukraine and sanctions being imposed.
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