Emily Sherkey, Author at Arbitration Matters

February 26, 2024February 22, 2024

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.

January 31, 2024January 26, 2024

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.

December 20, 2023December 18, 2023

B.C. – failure to answer fundamental question not an extricable error of law – #801

In Hudson’s Bay Company ULC v. Piret (18111 Blundell Road) Holdings Inc., 2023 BCCA 428, the Court held that the failure of an arbitrator to answer a fundamental question is a matter of interpretation of the arbitral award and does not give rise to an extricable error of law. It dismissed the application for leave to appeal. This decision seems to stand in contrast to other recent decisions coming out of the same court that have held a material misapprehension of evidence going to the core of an outcome of an arbitral award can amount to an extricable legal error.

October 24, 2023October 20, 2023

Alberta – Third party beneficiary of contract bound by arbitration clause – #784

In Husky Oil Operations Limited v Technip Stone & Webster Process Technology Inc, 2023 ABKB 545, the issue before the Court was whether a third party beneficiary of a contract was bound by the contract’s arbitration clause in a dispute concerning the contractual warranties. The Court answered the question in the affirmative. While the plaintiff was not a party to the contract containing the arbitration clause, it was given rights to enforce certain warranties. Since the plaintiff chose to enforce its third party rights under the contract, it was bound by the contract’s arbitration clause. The plaintiff was required to arbitrate its warranty claims, which were time-barred, as the limitation period had expired. However, the plaintiff’s negligence claims were not arbitrable as they did not arise out of the contract and those claims, which were brought by way of action, were not affected by the expiry of the limitation period to arbitrate.

August 31, 2023August 28, 2023

Federal – Independence/impartiality not essential criteria for arbitrator appointment? – #770

In Export Development Canada v. Suncor Energy Inc., 2023 FC 1050, the Federal Court heard an application for an order appointing an arbitrator pursuant to an arbitration clause in a political risk insurance policy (the “Policy”). The Court made several findings on the five issues before it. Two of those findings are highlighted here, with the others addressed below. First, subsidiaries of one of the parties claimed they were improperly included in the arbitration – as they were not parties to the arbitration agreement – and therefore claimed the Court had no jurisdiction to appoint an arbitrator in a manner that would bind them. The Court rejected this and refused to preliminarily determine that jurisdictional issue, which was a matter for the arbitrator pursuant to the competence-competence principle. Second, the Court determined what criteria should apply to the selection of the sole arbitrator. The Court held that the criteria of independence and impartiality, among others, are not “threshold criteria” and would not necessarily disqualify a proposed arbitrator if not met. Rather, they are part of what the Court considers in exercising its discretion.

July 5, 2023June 29, 2023

Manitoba – Limited record magnified difficulty of appeal of award – #751

In Benkie v. Nichol, 2023 MBKB 82, the Court dismissed an appeal of an arbitral award rendered in a family law dispute. The appeal record contained significant “gaps,” because evidence that was received before the arbitrator, and was considered by her in arriving at her award, was not before the appeal court. This important evidence included a transcript of the cross-examinations of witnesses at the hearing. There was no recording made of the hearing, which was what the parties agreed to as the process. This lack of information was “highly consequential to the disposition of the appeal’. The Court did not accept the wife’s argument that the Arbitrator erred in making a finding that was not supported by the evidence because the record did not contain all the evidence. The issues this case raises is relevant to commercial arbitration