In Borschel v. Borschel, 2020 ONSC 4395, Mr. Justice Lorne Sossin issued an anti-suit injunction restraining a party to arbitration awards subject to Ontario law from pursuing parallel proceedings in a U.S. jurisdiction. Sossin J. also dismissed arguments challenging enforcement of the awards based on legislative provisions requiring parties to sign any agreement reached as part of the court process. Sossin J. held that the provisions did not serve to invalidate awards which had issued on consent and where consent of the parties had been communicated by counsel.
Continue reading “Ontario – anti-suit injunction restrains party bound by Ontario arbitration award from pursuing parallel U.S. litigation – #368”Alberta – challenge to validity of agreement to arbitrate cannot evade application of Arbitration Act – #367
In Aldred Estate (Re), 2020 ABQB 469, Mr. Justice Craig M. Jones held that a court’s discretion to refuse a stay under section 7(2) of the Arbitration Act, RSA 2000, c A-43 was limited to specific circumstances and a potential for inefficiency did not empower courts to disregard a statutory imperative. Despite challenges to the validity of the arbitration agreement, a court may grant the stay and allow the arbitrator to determine allegations of invalidity. Jones J. dismissed as “insupportable” the argument that the Arbitration Act did not apply if a party challenged the validity of agreement to arbitrate. Referring to sections 7(2)(b) and section 17(3), Jones J. held that these provisions would make no sense if an invalid arbitration agreement rendered the Arbitration Act inapplicable.
Continue reading “Alberta – challenge to validity of agreement to arbitrate cannot evade application of Arbitration Act – #367”Manitoba – facts raising claim subject to arbitration, but common to judicial review, disregarded – #366
Despite overlap in facts, Mr. Justice James G. Edmond in Ladco Company Limited v. The City of Winnipeg, 2020 MBQB 101 declined to include an alleged breach of contract issue as an issue ancillary to judicial review applications, observing only that, if valid, that alleged breach should be determined by another procedural mechanism such as arbitration provided in the parties’ agreements. The facts in the record involved both (i) a 2016 exercise of a city’s statutory powers and the constitutionality of a by-law and resolution and (ii) a breach of contract issue arguably subject to an agreement to arbitrate. Despite acknowledging that certain facts in the record overlapped with issues properly raised for judicial review, Edmond J. held that he would disregard those facts involving breach of contract and would “leave that issue to another day”.
Continue reading “Manitoba – facts raising claim subject to arbitration, but common to judicial review, disregarded – #366”Québec – court suspends own process, requires parties take arbitration-related steps prior to decision on stay – #365
In Syndicat de la copropriété Clark et Fleury v. Généreux, 2020 QCCS 1835, Mr. Justice Mark Phillips issued a sequence of orders regarding the parties’ to exhaust the steps related to each of their competing dispute resolution procedural approaches. Without pre-determining either party’s rights either to pursue freshly-filed litigation or to obtain referral to arbitration, Phillips J. suspended his own involvement in a referral application and, during that suspension, imposed steps to complete procedural arguments for/against arbitration in two (2) court files. His orders included ‘recommending’ the parties exercise certain rights in their agreement to arbitrate prior to a later but near-in-time date at which he would resume involvement. Phillips J. limited his involvement to ensuring completion of all steps necessary to (i) the agreement to arbitrate and (ii) contesting the court’s jurisdiction, under reserve of any upcoming decision that the agreement to arbitrate applied to the disputes.
Continue reading “Québec – court suspends own process, requires parties take arbitration-related steps prior to decision on stay – #365”Ontario – professional negligence claims stem in part from arbitration agreement’s procedural options – #364
In HQIC and Circlemed Inc. v. Hamdani, 2020 ONSC 3403, Madam Justice Cynthia Petersen considered allegations made by clients against their former counsel of record in an arbitration and the negotiations which resolved the arbitration. Though her reasons focus on whether the record was sufficient/appropriate to allow her to grant summary judgment (no, it was not), Petersen J.’s analysis disclosed certain risks inherent for counsel in commercial arbitration when (i) stepping into a new brief and (ii) responding post-resolution to a client’s alleged dissatisfaction over the conduct and settlement of the arbitration. The record also highlights the opportunities for preliminary skirmishing created by inserting procedural options into an agreement to arbitrate which can be triggered merely by how either party frames its action.
Continue reading “Ontario – professional negligence claims stem in part from arbitration agreement’s procedural options – #364”Ontario – Mareva injunction and increased costs ordered where arbitral award funds were core of dispute – #363
In awarding costs on a substantial indemnity basis in Ndrive v. Zhou, 2020 ONSC 4568, Mr. Justice John R. McCarthy drew attention to a defendant’s conduct which “unnecessarily extended and complicated” Mareva injunction proceedings in which arbitral award funds were the “core of the dispute between the parties”. McCarthy J. underlined the importance of Mareva injunctions as a tool in civil litigation “to address the problem posed when a defendant utilizes the time lag between a claim being prosecuted and a plaintiff’s attainment and execution upon a judgment to divest itself of assets which would otherwise be available to satisfy that judgment in whole or in part”. Also, see notes regarding an arbitrator’s jurisdiction under the Arbitration Act, 1991, SO 1991, c 17 to issue ex parte preservation orders against arbitral parties and an arbitrator’s lack of jurisdiction to issue Mareva injunctions against non-parties.
Continue reading “Ontario – Mareva injunction and increased costs ordered where arbitral award funds were core of dispute – #363”Alberta – alleged limitations of arbitration unproven/insufficient to grant jurisdiction to regulator – #362
In FortisAlberta Inc v. Alberta (Utilities Commission), 2020 ABCA 271, Mr. Justice Jack Watson refused leave to appeal from a regulator’s decision that it lacked jurisdiction over costs otherwise subject to arbitration. Watson J. held that a “harmonious reading” of legislation governing the regulatory environment created jurisdiction for both regulator and arbitration tribunals. He resisted appellant’s alleged efforts to “confect” a “solemnly commercial sounding term” to bring the dispute within the regulator’s jurisdiction. Watson J. also determined that any alleged limitations in the arbitration process were insufficient to empower the regulator to “effectively override” the parties’ contracts. As appellate gatekeeper, Watson J. concluded that a full panel was unlikely to find the claim of inadequacy of arbitration anything more than just a claim supported only by appellant’s own say so.
Continue reading “Alberta – alleged limitations of arbitration unproven/insufficient to grant jurisdiction to regulator – #362”Québec – lacking jurisdiction over Plaintiff’s claim, court declines to address whether claim subject to arbitration – #361
In Consultants en environnement Eutrotech Inc. v. Bacon, 2020 QCCQ 1727, Mr. Justice Daniel Lévesque dismissed a claim made Plaintiff for monies allegedly owing from an arbitration award which recorded Defendant’s consent to render an accounting. Lévesque J. stated that jurisdiction was a matter of public order and, in dismissing the claim, declined also to rule on Defendant’s challenge that the claim was subject to arbitration. The authorities referred to also note that parties cannot by consent give jurisdiction to a court because jurisdiction is a matter of public order.
Continue reading “Québec – lacking jurisdiction over Plaintiff’s claim, court declines to address whether claim subject to arbitration – #361”Ontario – states’ legal submissions can qualify as “subsequent practice” in investor-state arbitration – #360
In The United Mexican States v. Burr, 2020 ONSC 2376, Madam Justice Bernadette Dietrich accepted that legal submissions by parties to the North America Free Trade Agreement Between the Government of Canada, the Government of Mexico and the Government of the United States, 17 December 1992, Can TS 1994 No 2 can qualify as “subsequent practice” under article 31(3) of the Vienna Convention on the Law of Treaties Can TS 1980 No 37 but that the facts fell short of meeting the standard in Mexico v. Cargill, Incorporated, 2011 ONCA 622 of a “clear, well-understood, agreed common position”. Dietrich J. also distinguished between an objection to jurisdiction which relates to the authority of a tribunal to hear a dispute and an objection to admissibility which refers to the characteristics of the claim, determining that she had jurisdiction to review the former but not the latter. She dismissed a challenge to an award on jurisdiction in which the tribunal found that investors had properly given notice of their intention to arbitrate by filing powers of attorneys authorizing legal counsel to initiate arbitration and to act on their behalf. Dietrich J. held that non-compliance with the formal requirements of Articles 1119 did not vitiate the state’s consent to arbitrate under Article 1122(1).
update – August 18, 2020 Notice of Appeal filed August 24, 2020 by The United Mexican States. See notes for grounds of appeal.
Continue reading “Ontario – states’ legal submissions can qualify as “subsequent practice” in investor-state arbitration – #360”Manitoba – court uses provincial corporation legislation to order Canada/U.S. parties to arbitrate under domestic arbitration act – #359
In Silpit Industries Co. Ltd. v. Rady et al., 2020 MBQB 96, Mr. Justice Theodor Bock dismissed an attempt to appeal an award on a question of law under The Arbitration Act, CCSM c A120. The award resulted from a court-ordered arbitration which another Manitoba court, in prior litigation, imposed and subjected to the Arbitration Act. Despite the parties being located in different countries, the court did not subject the arbitration to The International Commercial Arbitration Act, CCSM c C151. The earlier court required the parties to arbitrate the value of shares which the court ordered be sold under sections 207 and 234 of The Corporations Act, CCSM c C225 to remedy a break down in the relationship between the two (2) groups of shareholders each holding a 50% interest.
Continue reading “Manitoba – court uses provincial corporation legislation to order Canada/U.S. parties to arbitrate under domestic arbitration act – #359”