England – Court clarifies requirements for validly appointing arbitrators – #646

As our readers know, Canadian courts have been generating a wealth of jurisprudence on many international arbitration-related issues of late. However, there are still some lacunae in Canadian jurisprudence, which courts will often fill by referring to jurisprudence from other leading arbitral jurisdictions, including England and UNCITRAL Model Law on International Commercial Arbitration jurisdictions such as Australia, New Zealand and Singapore. Article 2A(1) of the Model Law explicitly provides for this: “In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.” Because of this, Arbitration Matters will occasionally report on interesting cases from other jurisdictions which could be applied in Canada if the issue were to present itself here. One such case made our radar this week, because it deals with an issue that is seldom fought about in Canada: whether an arbitrator was validly appointed. In ARI v. WXJ, [2022] EWHC 1543 (Comm), Justice Foxton of the English Commercial Court rejected the Claimant’s argument that the Respondent’s appointee was invalidly appointed, and that the arbitrator appointed by the Claimant should therefore decide the dispute as sole arbitrator.

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Ontario – Receiver not bound by international arbitration clause with foreign seat – #626

In Royal Bank of Canada v. Mundo Media Ltd., 2022 ONSC 2147, Justice Penny found that a court-appointed receiver was not required to arbitrate claims under New York law-governed contracts that provided for JAMS arbitration seated in New York. He found that the B.C. Court of Appeal’s analysis in Petrowest Corporation v. Peace River Hydro Partners, 2020 BCCA 339, which focused on the separability of the arbitration clause, was not binding on him, and declined to follow it. Rather, Justice Penny focused on the insolvency law “single proceeding” doctrine. He found that the appointment of the receiver rendered the arbitration clause “inoperative”.

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Federal – Pirating action stayed under New York Convention – #610

In General Entertainment and Music Inc. v. Gold Line Telemanagement Inc., 2022 FC 418, Justice Fothergill of the Federal Court allowed an appeal of the prothonatory’s order and stayed an action for breach of certain provisions of the Copyright Act, the Trademarks Act and the Radiocommunication Act in favour of arbitration seated in Bermuda. In doing so, he applied Article II.3 of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the Supreme Court of Canada’s jurisprudence on staying court proceedings in favour of arbitration.  The prothonatory erred in applying the law relating to a forum selection clause to an arbitration clause.

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Ontario – Court overturns decision, “deciding the matter” of jurisdiction de novo – #586

In Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 894, Justice Perell set aside a preliminary jurisdiction decision rendered by a three-person arbitral tribunal. The tribunal found that the parties had agreed to arbitrate their dispute. The matter came before the court as an application under section 17(8) of the Arbitration Act, 1991, S.O. 1991, c. 17, which provides that the court may “decide the matter” of a jurisdictional objection where the arbitral tribunal rules on the objection as a preliminary question. Following the approach set out by the Divisional Court in The Russian Federation v. Luxtona Limited, 2021 ONSC 4604 (Lisa’s 2021 Top Pick: Ontario – Russian Federation v. Luxtona Limited (Part 1) – #564), Justice Perell held that he was required to “decide the matter” of whether the parties agreed to arbitrate on a de novo basis. He explicitly rejected the submission that administrative law or appellate standards of review have any relevance in an application to the court to “decide the matter” of whether parties agreed to arbitrate their dispute.

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Myriam’s 2021 Top Pick: B.C. – lululemon athletica inc. v. Industrial Color Productions Inc. – #571

Famed Canadian athletic wear company lululemon athletica generated a noteworthy court decision this year, which has nothing to do with the controversy surrounding the sartorial choices it has made in designing Team Canada’s (very red!) uniform for the Beijing Olympics. Rather, the case adds to the significant number of decisions rendered of late in which the courts have grappled with their role – and the tests they must apply – when an application to set aside an international arbitral award comes before them under the UNCITRAL Model Law on International Commercial Arbitration (for a deep dive on this topic, see Lisa’s top pick, Russian Federation v. Luxtona Limited).

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Ontario – Courts decide consent to arbitration de novo, without deference to arbitral tribunal – #532

In Hornepayne First Nation v. Ontario First Nations (2008) Limited Partnership, 2021 ONSC 5534, Justice Fitzpatrick held that a court hearing an application to “decide the matter” of arbitral jurisdiction must decide the question de novo. This was an application to the court under section 17(8) of the Ontario Arbitration Act, 1991. That section provides that, if an arbitral tribunal finds as a preliminary question that is has jurisdiction, any party may apply to the court to “decide the matter”. Justice Fitzpatrick followed the Divisional Court’s decision in Russian Federation v. Luxtona, 2021 ONSC 4605, which interpreted a similar provision in Article 16(3) of the Model Law. He held that the court’s role on such an application is to decide de novo whether the arbitral tribunal had jurisdiction.

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