B.C. – Corrected award resets appeal time limits – #822

In Desert Properties Inc. v. G&T Martini Holdings Ltd., 2024 BCCA 24, the Court determined that when an arbitral tribunal corrects an award, the time to seek leave to appeal runs from the date of issuance of the corrected award (“Corrected Award”).   The appeal limitation period is not linked to party receipt of the original award (“Original Award”), irrespective of whether the grounds of appeal concern award corrections. The Court’s decision under Arbitration Act, SBC 2020, c. 2  (the “Act”) is consistent with other authorities which have considered the interplay between corrected awards and time limits for award challenges. 

Continue reading “B.C. – Corrected award resets appeal time limits – #822”

New Brunswick – Party autonomy includes ability to contract out of award – #821

The decision in Purrestore Management Services Inc., Gordon Gamble and Jason Reis v. Doiron, 2023 NBCA 110 concerns whether an arbitration clause in a franchise agreement that allowed a party to seek a de novo court trial if an arbitration award exceeded $100,000, conflicted with the mandatory provisions of the New Brunswick Arbitration Act, LRN-B 2014, c 100 (“Arbitration Act”).  The franchisor had obtained an arbitration award against the franchisees for over $100,000 (“Arbitral Award”).  The franchisees then sought a de novo trial, while the franchisor applied for judgment to enforce the Arbitral Award under s. 50 of the Act. The application judge affirmed the franchisees’ right to a de novo trial and dismissed the application for judgment.  The franchisor appealed, arguing that the Arbitration Act provided that s.50 could not be contracted out of and, therefore, in the absence of an appeal or an application to set aside the Arbitral Award the franchisor was entitled to judgment.  The Court of Appeal dismissed the appeal, concluding that the arbitration clause was not contrary to the Act as the Act permitted parties to contract out of s. 37, which provides that “an award binds the parties, unless it is set aside or varied under section 45 (appeal) or 46 (set aside)”.  To obtain a judgment to enforce an award under s. 50, a binding award under s. 37 was required but the parties had contracted out of 37 with their agreement. 

Continue reading “New Brunswick – Party autonomy includes ability to contract out of award – #821”

Ontario – Arbitrator’s stand-alone jurisdiction decision a preliminary “ruling” open to de novo review – #820

In Clost v Rennie, 2023 ONSC 6998, the Court ruled that an arbitration agreement was invalid after  a de novo hearing to “decide the matter” of the arbitrator’s jurisdiction under section 17(8) of the Ontario Arbitration Act, 1991, SO 1991, c. 17 (the “Act”). The Applicant (also referred to in the decision and herein as “Norm”) contended that the arbitration agreement was invalid because it was contained in a lease agreement which he alleged was fraudulent because his signature was forged. The parties first submitted the jurisdictional issue to a sole arbitrator, who found the arbitration agreement to be valid. The Court accepted that a de novo hearing under s. 17(8) of the Act was required, finding that the Arbitrator had rendered a “ruling” on a preliminary question of jurisdiction rather than an “award”, even though the sole question he was asked to determine was jurisdiction. There was an extensive evidentiary record before the arbitrator relative to the jurisdictional issue.  This raised for debate the difference between an “award” and a “ruling” on a preliminary question which can be decided by the Court on a hearing de novo. The Court completed its own review of the extensive evidentiary record and ultimately concluded that the lease (and therefore the arbitration agreement) was fraudulent and invalid and the arbitrator had no jurisdiction  

Continue reading “Ontario – Arbitrator’s stand-alone jurisdiction decision a preliminary “ruling” open to de novo review – #820”

Québec – Arbitral award with declaratory relief no bar to homologation – #819

In Société des établissements de plein-air du Québec c. Station Mont-Ste-Anne inc., 2024 QCCS 2 (“SÉPAQ v. SMSA”), the Québec Superior Court granted homologation of an arbitral award and rejected its partial annulment, dismissing the argument that the award should not be homologated because it was merely declaratory. Also, the decision referred to parts of the award and arbitral record throughout its reasoning despite some concerns by one of the parties about maintaining the confidentiality of the arbitral record.

Continue reading “Québec – Arbitral award with declaratory relief no bar to homologation – #819”

B.C. – Reasons for granting anti-suit injunction to prevent arbitration different than litigation – #818

In Axion Ventures Inc. v Bonner, 2024 BCSC 45 (“Axion”), the Court addressed a British Columbia application for anti-suit injunctions to prevent the respondents from proceeding with a Washington State lawsuit and an arbitration seated in Thailand. Axion is a skirmish in the ongoing war over the ownership and control of Axion Ventures Inc. and Axion Interactive (the two applicants in this case) and their assets and those of their subsidiary and related entities in other jurisdictions around the world. The applicants were both plaintiffs and defendants in litigation already underway in BC. For reasons described below the Court ultimately adjourned the anti-suit injunction applications. However, it recognized a distinction between anti-suit injunctions sought in respect of foreign court actions and those sought in respect of commercial arbitrations; namely, that the latter do not engage principles of comity. And of particular interest to BC counsel, the Court suggested there is no absolute rule in BC that an anti-suit can only be sought after a stay application is brought in the foreign proceeding.

Continue reading “B.C. – Reasons for granting anti-suit injunction to prevent arbitration different than litigation – #818”

Ontario – Principles applicable to awarding costs in domestic arbitrations clarified – #817

In Schickedanz v. Wagema Holdings Limited, 2023 ONSC 7219, the Court dismissed an appeal of an arbitrator’s costs award and in so doing, clarified two principles applicable to the awarding of costs in domestic arbitrations arising under the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Arbitration Act”). First, whereas in civil litigation, leave is required for an appeal from an order as to costs, the same is not true in relation to appeals from arbitral cost awards pursuant to Section 45 of the Arbitration Act. Second, the Court confirmed that unlike the Rules of Civil Procedure, arbitrators awarding costs pursuant to the Arbitration Act may award reasonable legal fees without reference to any court scale. Therefore, partial indemnity costs are not the governing presumption in domestic arbitrations and full indemnity costs may be awarded as reasonable without establishing undue or improper conduct. 

Continue reading “Ontario – Principles applicable to awarding costs in domestic arbitrations clarified – #817”

Manitoba – Court of Appeal quashes appeal of decision declaring clause invalid – #816

In Pokornik v. SkipTheDishes Restaurant Services Inc., 2024 MBCA 3, the Court dealt with a perennial issue—stays of arbitration in the class proceeding context. The decision has a few interesting takeaways, both arbitration-related and not, including one about the competence-competence principle. It also raises the thorny issue of when a stay motion decision may be appealed under section 7(6) of Manitoba’s domestic arbitration statute.

Continue reading “Manitoba – Court of Appeal quashes appeal of decision declaring clause invalid – #816”

Quebec – No abuse of process where parallel arbitration and court proceedings – #815

In Gaston Gagné inc. c. Gagné, 2023 QCCS 4552, the Court confirmed that arbitration clauses should receive a broad and liberal interpretation, dismissed an application to annul a final arbitral award, homologated the award, and dismissed a claim in damages based on an alleged abuse of process by the party opposing homologation. Even though one party decided to bring court proceedings on the same issue he put before the arbitrator, there was no abuse of process because his court proceeding did not impede the arbitration.

Continue reading “Quebec – No abuse of process where parallel arbitration and court proceedings – #815”

Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814

In Lochan v. Binance Holdings Limited, 2023 ONSC 6714, the Court refused to stay a proposed class action against the defendant cryptocurrency trading platform in favour of arbitration. The underlying claim concerns allegations that the defendant sold cryptocurrency derivatives without filing a prospectus, contrary to Ontario’s securities laws. The Court held that the arbitration agreement, embedded in the defendant’s website terms and conditions, was both unconscionable and contrary to public policy – based on the cost of the arbitration contemplated by the agreement and based on the clause’s complexity and lack of transparency. The Court’s overarching concern was that the arbitration provisions were not fair to platform users. The Court also provided a helpful difference between unconscionability and a violation of public policy. 

Continue reading “Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814”

B.C. – Enforcing award may be easy; collection may not – #813

In Asia Growth v. Qiao, 2023 BCSC 2173, the claimant was successful in its international arbitration and obtained a damages award of more than $17 million. However, the path to recovery was not simple as the respondent quickly transferred his only asset in B.C., his house, to his daughter. To recover, the claimant not only had to bring enforcement proceedings but also an action to set aside the transfer as a fraudulent conveyance. The claimant got default judgment against the respondent, his daughter and his wife (the other co-owner). Yet, that was still not the end of the story for the claimant. It then had to try to engage in a sale process to sell the respondent’s interest in the property, only to be faced with an application to set aside the default judgment. In this decision, the B.C. court dismissed the application, ultimately clearing a path to recovery for the claimant. This exemplifies that even after the court issues an order enforcing the arbitral award, the path to recovery is not always simple.

Continue reading “B.C. – Enforcing award may be easy; collection may not – #813”