Chloe Snider, Author at Arbitration Matters

July 22, 2024July 25, 2024

Federal – Competence- competence: a rule of chronological priority – #849

In Attorney General of Canada v. Aéroports de Montréal, 2023 FC 1562, the Court decided the issue of a tribunal’s jurisdiction under section 16(3) of the UNCITRAL Model Law, which is incorporated into the Commercial Arbitration Act, R.S.C., 1985, c. 17 as the “Commercial Arbitration Code” (the “CAC”). The tribunal had made a preliminary ruling that it had jurisdiction over the commercial dispute between the parties. The Court upheld the tribunal’s finding. The issue involved a determination of whether the arbitration clause in one of three related contracts applied. This case reiterates the following key arbitration principles: the power of an arbitral tribunal to rule on its own jurisdiction does not limit the powers of the Court to weigh and make its own findings of fact, on the basis of the evidence, and to consider and rule de novo on that jurisdiction; the Court must take the pleaded facts by a plaintiff as true on a jurisdiction motion; and if both interpretations of an arbitration agreement proposed by the parties are possible, priority must be given to the interpretation that favours the jurisdiction of the arbitral tribunal.

April 24, 2024April 19, 2024

B.C. – Consumer protection claim survives stay application through last-minute amendment – #830

Polanski v Vancouver Career College (Burnaby) Inc. concerns a defendant’s stay application brought under s. 7 of the Arbitration Act, SBC 2020, c 2 (“Arbitration Act”). The Court dismissed the application to stay certain claims made under s. 172 of the British Columbia Business Practices and Consumer Protection Act (“BPCPA”). The Court, relying on various appellate cases, held that s. 172 restricted the parties’ ability to agree to arbitrate and that the policy objectives of s. 172 would not be served by private and confidential arbitration. Why did the court need to re-articulate this well-established principle? Perhaps because the defendant needed to pivot after it had initially brought the application in response to the plaintiffs’ changing positions. The plaintiffs only added the s. 172 claims in the face of the stay motion and then only consented to the stay of the remainder of their claims for damages, including under s. 171 of the BPCPA, at the hearing of the application – no doubt, to the dismay of defence counsel who were facing a moving target. (A brief refresher for those in need it: s. 172 provides for private enforcement of consumer protection claims in the public interest, while s. 171 provides for a private remedy for damages or loss.)

February 12, 2024February 9, 2024

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.

December 21, 2023December 18, 2023

Québec – Determination of Admissibility Left to Arbitrator Where Facts Disputed – #802

Fondations Trevi Canada c. Édyfic inc., 2023 QCCS 4466 highlights the importance of clear communications between parties when those communications have implications as to whether contractually prescribed deadlines are met where there is a multi-tier arbitration clause. In this case, the Court appointed an arbitrator where admissibility with respect to the arbitration was disputed. It was not obvious from a summary review of the evidence and an interpretation of the dispute resolution clause whether certain prescribed periods under the relevant agreement had expired. The Court rejected the defendant’s argument that the matter was inadmissible and that an arbitrator should therefore not be appointed. With reference to case law about the competence-competence principle, the Court held that these matters should be referred to the arbitrator for determination. This case engages the often difficult issue of jurisdiction versus admissibility.

October 27, 2023October 30, 2023

Ontario – Court defines arbitral record where arbitration not recorded – #787

In Reed v. Cooper-Gordon Ltd. et al, 2023 ONSC 5261, the Court granted in part the plaintiff’s motion for leave to appeal an employment and shareholder related arbitral award on a question of law under s. 45 of the Arbitration Act, 1991. The plaintiff’s claims were originally raised by way of action, then proceeded by arbitration. The plaintiff/claimant in the arbitration claimed, among other things, that the arbitrator had wrongly determined the notice period for pay in lieu of notice, overlooked certain claims for unpaid bonuses and RRSP contributions, and incorrectly valued his shares in the underlying arbitration relating to his exit from the defendant. The Court held that the arbitrator’s error in computing the notice period and his lack of reasons relating to certain claims justified granting leave to appeal. The Court denied leave on the remaining issues. Because the parties had not recorded the arbitration, the record was limited to pleadings filed in the Superior Court of Justice that defined the issues for arbitration, the parties’ arbitration agreement, the Arbitration Award and Costs Award, the shareholders’ agreement and the parties’ Partial Minutes of Settlement on a particular issue.

August 29, 2023August 28, 2023

Ontario – Stay granted: tort claims were in “pith and substance” contractual – #768

In Spasiw et al v. Quality Green Inc. et al, 2023 ONSC 4422, the Court granted the defendants’ motion to stay the action in favour of arbitration in the context of a shareholders dispute. The plaintiffs’ claims of fraudulent misrepresentation and oppression were “closely connected with and related to” the parties’ share purchase agreement and shareholders agreement and in “pith and substance” contractual.. Accordingly, the claims fell within the broad scope of the arbitration clauses contained in the parties’ two agreements.

August 3, 2023August 1, 2023

Ontario – Title of proceedings may be amended in recognition and enforcement proceeding – #760

IC2 Fund v Wires, 2023 ONSC 3879 addresses: (1) whether it is appropriate for a party seeking to enforce an international arbitral award to correct the title of proceedings in an enforcement proceeding where both abbreviated and formal names were used interchangeably in the arbitration; (2) whether an applicant using an abbreviated name has standing; and (3) whether a party resisting enforcement can do so on the basis of an arbitrator’s alleged partiality after such allegations were addressed in the arbitration, which decision was not challenged. Here, the applicant (the respondent in the arbitration) brought an application to enforce an arbitral award (the “Award”) relating to its costs of the arbitration. In the title of proceedings in the notice of application, the applicant used an abbreviated corporate name. In the absence of confusion around the party’s identity, including because the respondent (the applicant in the arbitration) had used both the formal and abbreviated names, the court granted leave to amend the notice of application to reflect the full corporate name and resolved the standing issue on the same basis. The court also recognized the Award, rejecting the allegations of partiality of the arbitrator. The respondent had previously made allegations in the arbitration about the arbitrator’s lack of impartiality, which were rejected. The respondent did not challenge this decision.

May 24, 2023May 24, 2023

Ontario – Peace River “arguable case” standard applies to ICAA stay motion – #739

Husky Food Importers & Distributors Ltd v JH Whittaker & Sons Limited and Star Marketing Ltd, 2023 ONCA 260 addresses the standard of proof that a party seeking a stay of proceedings under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA”) must meet in order to establish the existence of an arbitration agreement that grounds the stay of proceedings. The Court of Appeal found that Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 supersedes the stay analysis articulated in Haas v. Gunasekaram, 2016 ONCA 744.