Arbitration Matters

November 20, 2024November 15, 2024

Ontario – Court endorses pre-hearing disclosure from non-parties to assist arbitration – #876

In Royal and Sunalliance Insurance v Ontario Provincial Police, 2024 ONSC 5505, the Court interpreted section 29(4) of Ontario’s Arbitration Act, 1991 (the “Act”) to allow courts to order non-party disclosure before an arbitration hearing. Section 29(4) states, “[o]n the application of a party or of the arbitral tribunal, the court may make orders and give directions with respect to the taking of evidence for an arbitration as if it were a court proceeding.” The Court’s order permits pre-hearing “discovery” of a non-party to the arbitration, as opposed to the taking of evidence at a hearing. The case sets out some considerations that may be relevant to future applications under this provision of the Act. This case highlights the need for parties seeking non-party disclosure in arbitration to carefully review the applicable legislation and frame requests for Court assistance accordingly.

November 18, 2024November 15, 2024

Ontario – Application to enforce award against non-party to arbitration stayed – #875

In Sociedad Concesionaria Metropolitana De Salud S.A. v Webuild S.P.A, 2024 ONSC 4491 the Court considered whether to grant an application to enforce an arbitral award against a non-party to the arbitration. The non-party had purchased assets of the unsuccessful party to the arbitration as part of a restructuring proceeding in Italy. The successful party to the arbitration and the non-party disagreed on whether the asset purchase included the transfer of the unsuccessful party’s obligations under the award to the non-party. The Court stayed the enforcement application pending a determination of that threshold issue by the Italian courts.

November 8, 2024November 8, 2024

B.C. – Stay motion test and the “brick wall framework” – #874

In Wiederhold v Aspen Technology, Inc., 2024 BCSC 1731, the Court declined to grant a stay application under s. 7 of the Arbitration Act, SBC 2020, c. 2 [Act], on the basis that the arbitration clause was unenforceable for lack of consideration, contrary to public policy, and unconscionable. It applied the “brick wall framework” described in Spark Event Rentals Ltd. v Google LLC, 2024 BCCA 148 at paragraphs 19 ss.

November 6, 2024November 8, 2024

Ontario – Court Modifies Injunction Test in Context of International Arbitrations – #873

In NorthStar Earth & Space Inc. v. Spire Global Subsidiary, Inc., 2024 ONSC 5060, the Court granted an interim injunction before the applicant had commenced an arbitration. The Court did so even though it acknowledged that the applicant would not have met the test under Ontario law for a mandatory injunction (the strong prima facie case standard). Instead, because of the urgency, the Court applied the injunction test that would otherwise have been applied by the arbitral tribunal under Article 17 of the UNCITRAL Model Law. Article 17 requires a lower threshold of showing the claim has a “reasonable possibility” of success. The Court therefore modified the test for granting an interim injunction in the context of an international arbitration.

November 4, 2024November 8, 2024

Ontario – Common counsel insufficient for multiple arbitral appointments to raise bias – #872

In Dhaliwal v Richter International Ltd., 2024 ONSC 5103, the Court dismissed an application to remove an arbitrator for reasonable apprehension of bias. This was a multiple appointments case. The application arose from the non-disclosure of a concurrent mandate, in which counsel for the Respondents also was counsel in another arbitration before the same arbitrator. The Applicants’ challenge for bias was not brought in a timely manner, as required by s. 13(3) of the Arbitration Act, 1991, SO 1991, c 17. In any event, overlapping counsel alone was not a sufficient ground for claiming bias, and no contextual circumstances necessitated disclosure of the concurrent mandate. Also, the arbitrator’s rejection of the Applicants’ evidence of what had been disclosed about the concurrent mandate did not give rise to actual bias.

October 25, 2024October 18, 2024

Québec – Award that violates municipal by-law does not offend public policy – #871

In Bélanger c Beauchamp, 2024 QCCS 3118, the Court homologated several awards rendered in the context of a dispute between two co-owners of an undivided property concerning the location and size of their parking spaces. The Defendant contested the homologation of one of the awards based on public policy grounds, alleging that the award violated a municipal by-law. The Court ruled that any violation of the municipal by-law that would result from the award did not amount to a public policy violation that justified refusing homologation, because it would not be a violation that offends the fundamental values underlying Québec public policy. The Court also decided that an award rejecting one of the parties’ applications for recusal of the arbitrator did not constitute an award within the meaning of the Québec Code of Civil Procedure (“CCP”), and so could not be homologated. This latter issue is not addressed in this case note.

October 23, 2024October 25, 2024

Federal Court – Section 46(1) of Marine Liability Act gives claimant option to avoid arbitration – #870

Crosby Molasses Company Limited v. Scot Stuttgart (Ship), 2024 FC 1358 highlights a little-known provision in Canadian maritime law that is being interpreted in a way that ignores arbitration law principles and overrides arbitration clauses in the context of international maritime carriage of goods. The provision, section 46(1) of the Marine Liability Act, SC 2001, c 6 (“Marine Liability Act”) states that, “if a contract for the carriage of goods by water provides for the adjudication or arbitration of claims… in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada...”

October 21, 2024October 18, 2024

B.C. – Court adopts award-centric review for questions of law – #869

In Desert Properties Inc. v. G&T Martini Holdings Ltd, 2024 BCCA 320, the Court rejected challenges to a liability award and an interest award in disputes stemming from a major property development. The Court dismissed applications for leave to appeal and cross-appeal for failure to demonstrate extricable errors of law in the liability award. The Court also ruled there was insufficient merit in a proposed appeal from a BCSC decision which had declined to set aside the interest award. Both parties have kept the B.C. courts busy with multiple challenges to these arbitral awards, generating three Case Comments in recent months. It can be argued that the Court’s mode of analysing extricable errors of law for the purposes of appeal has changed (perhaps ever so slightly) since its decision in Escape 101 Ventures Inc. v. March of Dimes Canada, 2022 BCCA 294, in which it found that misapprehensions of evidence that go the core of the outcome of a case are extricable errors of law.

October 11, 2024October 11, 2024

Manitoba – Court denies stay in favour of arbitration for several (suspect) reasons – #868

In Bains and 10031670 Manitoba Ltd. v. Tworek et al, 2024 MBKB 111, the Court dismissed a motion to stay two court proceedings in favour of arbitration. In doing so, the Court ran afoul of some settled principles in Canadian (and international) arbitration law. These include interpreting the scope of the arbitration agreements, the test for a stay of proceedings in favour of arbitration, the separability presumption and concerns over inefficiency and multiplicity of proceedings where the dispute concerns both signatories and non-signatories to the arbitration agreement.

October 9, 2024October 11, 2024

Alberta – Arbitrator’s issuance of award without all evidence was an error of law – #867

In Giacchetta v Beck, 2024 ABKB 481 (CanLII) (“Giacchetta”), the Court held, in the context of an arbitration conducted under Alberta’s Arbitration Act, RSA 2000 c A-43 (the “Act”), that it is an error of law for an arbitrator not to consider all the evidence. Here, the arbitrator stated that he had rendered his award without considering all the evidence and said that, “there may have been an obligation on my part to have requested a copy once I realized that I did not have it…”. This resulted in a finding that the arbitrator’s reasons were insufficient, which also amounted to an error in law.