Ontario – BIA trustee cannot delegate claims determination to arbitrator – #695

In Re YG Limited Partnership, 2022 ONSC 6138, Justice Kimmel held that the Trustee appointed under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the “BIA“) could not delegate to an arbitrator its authority, pursuant to section 135 of the BIA, to determine and value claims against the debtor. That put the Trustee in the position of an adversary, rather than a decision maker. As such, she found that a continuation of an arbitration to determine damages was not a valid exercise of the Trustee’s authority. She refused to order the Sponsor, who had agreed to indemnify the Trustee for all administrative fees and expenses incurred in relation to the resolution of unresolved claims against the debtor, to fund the administrative fees and expenses connected with Phase 2 of the arbitration (damages) following Phase 1 (liability). The issue of the Phase 1 administrative fees was not before her.

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Alberta – Successful enforcement of right to arbitrate attracts triple “tariff” costs  – #659

In Barrel Oil Corp v. Cenovus Energy Inc., 2022 ABQB 488, Justice M.H. Hollins granted a Respondent who successfully defended an application to stay an arbitration the Respondent had commenced, triple “tariff” costs, equating to just over 40% of the Respondent’s out of pocket costs. The Court rejected the Respondent’s plea of full indemnity costs, finding they were inappropriate in this case.

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Ontario – Failure to pay award does not justify security for costs – #653

In Amelin Resources, Inc. v. Victory Energy Operations LLC, 2022 ONSC 4514, Associate Justice C. Wiebe dismissed a motion for security for costs under Rule 56.01(1)(d) of the Ontario Rules of Civil Procedure, finding that Victory, the Defendant/Moving Party,  did not meet its onus of showing that there was “good reason to believe” that Amelin, the Plaintiff/Responding Party, had insufficient assets to pay the Victory’s costs in Ontario. Amelin’s failure to pay amounts granted to Victory under an arbitration award and U.S. Court order did not suffice.

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Alberta – No set aside for document disclosure complaints – #633

In ENMAX Energy Corporation v. TransAlta Generation Partnership et al, 2022 ABCA 206, the Alberta Court of Appeal (Paperny, Rowbotham, and Strekaf, JJA) upheld the chambers justice’s decision to refuse to set aside an arbitral award (the “Award”) under section 45(1)(f) of the Alberta Arbitration Act, RSA 2000, c A-43 (the “Act“). It agreed that the (“Tribunal”) document disclosure rulings of the arbitral tribunal (“Tribunal”) in relation to a narrow sub-issue did not prevent the Appellants from making their case, nor did it result in manifest unfairness. Among other things, the Court of Appeal found that the Tribunal did not foreclose the possibility of further document production, but that it was the Appellants who opted not to apply for the records whose absence they now complained about. The Court also held that, when viewed in context, the Tribunal relied on other evidence to reach its conclusion and the absence of the records sought by the Appellants did not preclude them from presenting their case.

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British Columbia – Court sets aside arbitrator’s decision for breach of procedural fairness – #615

In Bedwell Bay Construction v. Ball, 2022 BCSC 559, Justice Giaschi granted a judicial review application to set aside an interim decision of an arbitrator (the “Arbitrator”) of the Residential Tenancy Branch (the “RTB”) and to remit the matter back to the RTB for redetermination de novo before a different arbitrator. In doing so, the Court accepted the petitioner’s argument that the arbitrator did not act fairly when it required the petitioner to present its case first (even though it did not have the burden of proof), and denied it the right to cross-examine and to provide reply evidence and submissions. The Court held that this amounted to breaches of the rules of natural justice and procedural fairness. These findings have relevance to commercial arbitrations.

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Ontario – Court rejects cross-applications to appoint valuators as the arbitrator – #593

In MacBryce Holdings Inc. et al. v. Magnes Partnership et al, 2022 ONSC 321, Justice Gilmore of the Ontario Supreme Court of Justice refused competing applications by parties to appoint their respective proposed candidates as arbitrator. Each proposed arbitrator was also a qualified valuator, whose mandate was to determine the fair market value (“FMV”) of shares pursuant to a shareholders agreement. Justice Gilmore rejected the argument that the conduct of the arbitration was to be confined to a more truncated and informal process of reviewing existing valuation reports, which was the process as set out in the agreement. She found that the parties clearly agreed upon an arbitration, rather than a valuation, which invoked certain procedural protections. She ordered that the parties choose an arbitrator (who would be neither of their proposed candidates) and gave further directions on the conduct of the arbitration.

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