Ex-couple's assets include corporation owning 12 sales agreements for Dubai development
The British Columbia Court of Appeal ruled that an arbitrator’s 2019 award correctly concluded that the shares of a Belizean corporation were family assets of which former spouses became joint owners as tenants in common after their divorce.
The case of Zemtsova v. Shevalev Estate, 2025 BCCA 114, involved a couple who married in Russia and then moved to Canada. Their assets included a Belizean corporation that owned 12 sales purchase agreements (SPAs) for a real estate development in Dubai.
In 2014, the Supreme Court of British Columbia finalized their divorce, decided that arbitration should resolve their future disputes, and made property division arrangements, including for the transfer of the SPAs worth $5.5 million to the wife. However, later events in Dubai made the SPAs’ value uncertain and prevented the transfer.
The husband died in 2015. His estate, via its administrator, took his place in the legal proceedings. The parties agreed the dispute should be resolved under BC’s Family Relations Act, 1996 (FRA), rather than its replacement, BC’s Family Law Act, 2011.
In 2016, an arbitral award varied the 2014 court order upon finding that a transfer had been frustrated. The arbitral award ordered the parties to jointly hold the SPAs but did not specify how they would hold them.
In 2019, a second arbitral award applied the definition of family assets under s. 58 of the FRA to the evidence to interpret the 2014 court order. This arbitral award said the Belizean corporation was a family asset and the parties would thus hold the SPAs via joint beneficial ownership of the corporation’s shares.
A chambers judge of the BC Supreme Court dismissed the wife’s application to set aside the 2019 arbitral award. The judge noted that the wife could have responded to the estate’s argument that both parties beneficially owned the SPAs and the corporation’s shares when she appeared before the second arbitrator. The wife appealed this decision.
The Court of Appeal for British Columbia dismissed the appeal. The appeal court upheld the 2019 arbitral award’s conclusion that the Belizean corporation’s shares were family assets of which the former spouses were joint owners as tenants in common under s. 56 of the FRA following the 2014 divorce order.
The appeal court added that the arbitrator who made the 2019 award did not exceed the arbitration agreement’s scope, violate the rules of natural justice, or wrongly imply a new term into the 2014 court order, as the wife argued.
The appeal court found that the evidence showed that the Belizean corporation was a holding company serving as a vehicle to hold the SPAs, that the corporation held no other assets and served no business ends, and that the SPAs were purchased as a family investment.
The appeal court concluded that a plain reading of the 2014 order showed that the corporate shares were family assets. The appeal court pointed to a heading named “Division of Assets” above the 28th paragraph, which stated the husband would retain the corporation only after the transfer of the SPAs to the wife. The appeal court noted that the husband did not retain the corporation, which thus remained a family asset, because the transfer mentioned in the 28th paragraph never happened.
The appeal court ruled that the chambers judge correctly found that the arbitrator who made the 2019 award exercised her powers in line with the arbitration agreement by deciding how the parties should jointly hold the SPAs.
The appeal court also agreed with the judge’s findings that the arbitrator could consult the FRA as an authority and committed no breach of natural justice by failing to allow the parties to make submissions about the FRA.
The appeal court found that certain decisions – namely, the decisions to manage the family assets through an entity called Global Management & Audit, to buy the SPAs, and to have the Belizean corporation hold the shares – were family decisions made during the marriage.
The appeal court noted that, while the wife was entitled to enjoy the benefits of these family decisions, she also had to bear the decisions’ burdens. Specifically, she had to continue holding the SPAs within the Belizean corporation if she wanted to realize and receive her share in the SPAs’ residual value.
