Referring to the ‘state of the current case law’, Mr. Justice Frédéric Bachand in Specter Aviation v. Laprade, 2021 QCCA 183 determined that the proposed appeal questions involving aspects of arbitral law merited the Court of Appeal’s attention. The questions included whether: (i) the judge disregarded the principle of the autonomy of the agreement to arbitrate when concluding that Applicants could not invoke both the agreement to arbitrate and the nullity of the liquidation contract containing it; (ii) Applicants had waived the agreements to arbitrate despite having reiterated their consent to arbitrate; and, (iii) the judge incorrectly assessed the impact of article 3152 of the Civil Code of Québec, CQLR c CCQ-1991 in a contract having extraneous elements. Though he did order the suspension of the Superior Court proceedings, Bachand J.A. declined to order the suspension of the arbitration undertaken before the Chambre Arbitrale Internationale de Paris. He determined that doing so would breach the autonomy of international arbitration and violate the limitations imposed on courts by article 622 of the Code of Civil Procedure, CQLR c C-25.01.
Continue reading “Québec – ‘state of the current case law’ justifies leave to appeal raising autonomy of agreement to arbitrate – #428”Ontario – court enforces Model Law prohibition of appeals where arbitral tribunal decides jurisdiction as preliminary question – #427
On application by Respondents, Ontario’s Court of Appeal in United Mexican States v. Burr, 2021 ONCA 64 quashed the appeal of a decision in first instance dismissing a challenge to a tribunal’s preliminary decision on jurisdiction. Despite counsel’s agreement that a party could “ride both horses” and rely on both articles 16 and 34 of the UNCITRAL Model Law on International Commercial Arbitration, adopted by the United Nations Commission on International Trade Law on June 21, 1985, as amended on July 7, 2006 when challenging an arbitral tribunal’s decision on jurisdiction, the Court limited its decision to prohibiting those appeals wherein a party’s jurisdictional decision was determined as a preliminary question under article 16(3) and not in the award on the merits.
Continue reading “Ontario – court enforces Model Law prohibition of appeals where arbitral tribunal decides jurisdiction as preliminary question – #427”Ontario – “trite law” that settlement agreements are contracts subject to general law of contract – #426
Following the guidance set out in Bawitko Investments Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON CA), Mr. Justice W. Daniel Newton in Rockwater Construction Inc. v. Coppin et al, 2020 ONSC 7956 held that a settlement failed to qualify as a binding contract. Newton J. observed that it is “trite law that settlement agreements are contracts subject to the general law of contract” and that contract interpretation principles apply equally to deadlines in agreements. Significant post-settlement disagreements over key provisions demonstrated to Newton J. that neither party had initially contemplated or agreed on all essential terms. Newton J. held that waiver of timelines in a settlement “would require clear evidence that both parties agreed that there would be no deadline for completing” the disputed steps. Despite a settlement clause requiring mediation in case of disagreement over the settlement, Newton J. determined that it was “pointless” to require the parties to return to mediation.
Continue reading “Ontario – “trite law” that settlement agreements are contracts subject to general law of contract – #426”B.C. – three-part test for stay under 1996 Arbitration Act still applies under 2020 Arbitration Act – #425
In Wilson v. Infracon Construction Inc., 2020 BCSC 2074, Madam Justice Lindsay L. Lyster held that the three-part test for a stay developed under B.C.’s former Arbitration Act, RSBC 1996, c 55 continues to apply under the new Arbitration Act, SBC 2020, c 2. To resist a stay of his wrongful dismissal action, Plaintiff argued that the agreement to arbitrate included in the employment contract was void due to conflict between B.C.’s Arbitration Act, RSBC 1996, c 55 and its Employment Standards Act, RSBC 1996, c 113. Lyster J. disagreed, following A-Teck Appraisals Ltd. v. Constandinou, 2020 BCSC 135 whose reasoning was on “all fours with the present matter”. In doing so, Lyster J. dismissed all four (4) of Plaintiff’s reasons to resist its application: the court had considered binding authorities and statutes; despite being “isolated and relatively recent”, the reasoning remained persuasive; promoting consistency with similar legislation did not justify disregarding the B.C. decision in first instance in favour of an Ontario appellate decision; and, Plaintiff failed to meet the “exceptionally high” standard to demonstrate that the decision was “palpably wrong”.
Continue reading “B.C. – three-part test for stay under 1996 Arbitration Act still applies under 2020 Arbitration Act – #425”Ontario – awards are neither “suggestions” nor “invitation to further negotiation” – #424
In van Rhijn v. van Rhijn, 2020 ONSC 8032, Madam Justice Lene Madsen reminded an arbitral party that awards were neither “suggestions” nor “an invitation to further negotiation”. Arbitration awards “spoke from when they were made”, creating obligations which required the party’s compliance, “whether he agreed with those terms or not”. The parties submitted their dispute to a med-arb process before the same neutral who, after having issued two (2) awards advised the parties of his withdrawal. Despite his withdrawal, the arbitrator retained jurisdiction to issue a costs award which he did issue after his withdrawal and after having invited costs submissions in one award released just prior to withdrawing.
Continue reading “Ontario – awards are neither “suggestions” nor “invitation to further negotiation” – #424”Saskatchewan – terms of reference “supersede” earlier agreement on leave to appeal question of law – #423
In Turpie Farms Ltd. v. 613168 Saskatchewan Ltd., 2020 SKQB 345, Mr. Justice Neil Robertson applied the last of four (4) agreements to arbitrate addressing the parties’ right to appeal on a question of law. Robertson J. held that the last-signed terms of reference signed by parties’ counsel “superseded” the parties’ earlier agreement and allowed an appeal as of right on a question of law. Though respondent disputed whether the numerous grounds raised a question of law, Robertson J. deferred that issue to the judge hearing the appeal, reasoning that “since leave to appeal is not required, I am not called upon to decide whether the proposed grounds are proper questions of law”.
Continue reading “Saskatchewan – terms of reference “supersede” earlier agreement on leave to appeal question of law – #423”P.E.I. – set aside application invoking arbitral misconduct is neither a judicial review nor an appeal – #422
In Charlottetown Equities Ltd. v. Charlottetown Airport Authority Inc., 2020 PESC 41, Madam Justice Nancy L. Key dismissed a set aside application which alleged arbitral misconduct. Stating that an applicant must support its allegation of bias by evidence, Key J. reminded that “the threshold for a finding of bias is high and suspicion is not enough”. Key J. confirmed that a set aside invoking misconduct constituted neither a judicial review nor an appeal and stressed that she must base her review on the record as a whole. The record included two (2) e-mails exchanged between the party appointed arbitrators which Key J. described as “vital” to her decision. Those e-mails formed part of the record on which the Chair had based his decision and, having been referenced by the Chair in his reasons, allowed Key J. to qualify the Chair’s reasons as sufficient. Key J. determined that applicant had agreed to the process by which the arbitration panel’s terms of reference had been drafted and, having contributed to and approved of those terms, could not afterwards allege that a panel member showed bias by drafting those terms.
Continue reading “P.E.I. – set aside application invoking arbitral misconduct is neither a judicial review nor an appeal – #422”Ontario – leave denied to commence derivative action subject in part to arbitration – #421
In Hevey v. Wonderland Commercial, et al., 2021 ONSC 540, Mr. Justice Spencer Nicholson refused leave to commence a derivative action in which part of the dispute was subject to arbitration before an accountant. Each of the parties to the proposed derivative action indicated they had “made every effort to nominate an accountant to arbitrate pursuant to the Settlement Agreement and that the other side was non-cooperative in the process”. Nicholson J. determined that the parties’ contract provided a mechanism for dealing with the dispute and, despite “superficial attempts to comply”, the parties could remit the matter to arbitration. Bringing an action in respect of that part of the dispute “does not appear necessary”.
Continue reading “Ontario – leave denied to commence derivative action subject in part to arbitration – #421”Supreme Court – for those SCC justices willing to consider it, Vavilov applies to private commercial arbitration where legislation provides for appeal – #420
Canada’s Supreme Court in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 offered to clarify a contracting party’s duty to exercise in good faith a discretion granted to it by contract and recognized in Bhasin v. Hrynew, 2014 SCC 71. In dismissing the appeal from Greater Vancouver Sewerage and Drainage District v. Wastech Services Ltd., 2019 BCCA 66, the Supreme Court upheld a decision in first instance to set aside a private, commercial arbitration award. The appeal presented an opportunity for the Supreme Court to consider the effect, if any, of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 on the standard of review principles applicable to appeals of commercial arbitration awards set out in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 and Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32.
Regarding that opportunity, six justices preferred to “leave [it] to another day” while the other three chose to embrace it, considering that to “leave this undecided is to invite conflict and confusion”. The six reasoned that they did not have the benefit of submissions on that question or the assistance of reasons on point from the courts below and that, in any event, the appeal’s outcome did not depend on identifying whether the proper standard of review was correctness or reasonableness.
Three justices acknowledged “important differences between commercial arbitration and administrative decision‑making” but declared that such differences do not affect the standard of review where legislation provides for a right of appeal. Drawing on Vavilov which explained that “a legislative choice to enact a statutory right of appeal signals an intention to ascribe an appellate role to reviewing courts”, the three held that Vavilov had “displaced” the reasoning in Sattva and Teal Cedar. “Concluding otherwise would undermine the coherence of Vavilov and the principles expressed therein”. The three limited the scope of their determination. “Our conclusion on this point is limited to the specific statutory provision at issue. In every case, the question is one of legislative intention, as reflected in the language of the statute”.
Independent of the above, the six justices also expressly agreed with B.C.’s Attorney General that, when granting leave to appeal, courts should “simply and precisely” state questions of law upon which they grant leave in order to prosecute appeals efficiently. The six observed that the “complicated formulation of the first question of law” made it difficult for the courts below to provide a direct and effective answer.
Continue reading “Supreme Court – for those SCC justices willing to consider it, Vavilov applies to private commercial arbitration where legislation provides for appeal – #420”N.W.T. – Court applies Vavilov to commercial arbitration awards subject to statutory right of appeal – #419
In Northland Utilities (NWT) Limited v. Hay River (Town of), 2021 NWTCA 1, N.W.T.’s Court of Appeal held that Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65’s revised framework applies to commercial arbitration awards reviewed as a result of a statutory right of appeal. “It is difficult to follow the argument that the reliability of Canada as a forum for resolution of local and global business disputes, would be rendered less grounded in the rule of law in a rules-based system of law by employing an appellate review standard”. The Court distinguished appeal wording in the N.W.T.’s domestic arbitration legislation from the former B.C. domestic arbitration legislation considered in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (CanLII), [2014] 2 SCR 633 and Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 (CanLII), [2017] 1 SCR 688. Vavilov’s omission of any mention of commercial arbitration did not argue for or against its extension. “Silence cuts both ways”. The Court did not comment on whether Vavilov applied to awards arising from contracts which contained no right of appeal and where no statute provided such right. Note: the agreement to arbitrate in issue ought to qualify as a statutory arbitration and not a consensual arbitration as it was not negotiated but imposed under section 91(5) of the Cities, Towns and Villages Act, SNWT 2003, c 22, Sch B.
Continue reading “N.W.T. – Court applies Vavilov to commercial arbitration awards subject to statutory right of appeal – #419”