Lisa C. Munro

September 14, 2023September 8, 2023

Québec – “Uniformity principle” drives appointment of French amicus curiae to harmonize Québec law – #774

This case note reports on a trilogy of case management decisions that arose in the context of an application by the Claimant under art. 632 of the Code of Civil Procedure, RLRQ, c C-25.01 (“CCP”) challenging a tribunal’s jurisdiction to determine claims brought by the Respondent, which the Claimant alleged were new claims made after numerous rounds of written submissions – and thus outside the tribunal’s jurisdiction – in a commercial arbitration relating to a lease agreement (the “Arbitration”). The key issues decided were: (1) a court conducts a hearing de novo when deciding an objection to a tribunal’s ruling on its own jurisdiction (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2103); (2) Claimant’s application for an interim stay of arbitral proceedings during the pendency of its jurisdictional challenge was denied (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2098); and (3) the Court appointed a French amicus curiae with expertise in international law to assist it during the jurisdictional hearing, invoking the Court’s duty to abide by the uniformity principle in interpreting Québec legislation based on the Model Law (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 3061).

August 14, 2023August 18, 2023

Alberta – Misapplication of separability principle in contract dispute – #762

Gutama Estate v Vital Property Services Inc., 2023 ABKB 436, is NOT an arbitration case and the contract at issue contained no arbitration clause. But bear with me! The case involved the alleged repudiation/termination of a shareholders agreement and the consequences to the rights and obligations of the parties as a result. The question: if the contract was repudiated/terminated, were all the parties’ rights unwound? The Court quoted from Heyman v. Darwins Ltd. (uniset.ca), the leading U.K. decision that established the common law principle of separability of the arbitration clause. The Court described Heyman v Darwins as a case that addresses the operation of an arbitration clause where the contract has come to an end: in circumstances in which the contract-terminating event did not go to the very existence of the contract, “it did not matter how the contract came to be terminated: the contract (including its arbitration clause) had existed, and the arbitration clause continued to operate….” The Court then extrapolated that concept and applied it more broadly: “[i]n other words, pre-existing and engaged contractual rights continued to operate despite the later termination (by whatever means) of the contract”. Applying that reasoning to this case where the shareholders agreement was alleged to have been repudiated or terminated by its own terms, the Court said that any such termination did not, “eclipse the agreement completely ie render it meaningless for all purposes and at all times… [i]nstead, crystalized rights and obligations would continue.” In other words, “the parties would be discharged from future obligations, but remain bound by rights and obligations that have accrued through partial performance”. Thus the Court imported part of a uniquely arbitration law principle with a specific public policy purpose, separability, into general contract law.

June 19, 2023June 20, 2023

Ontario – Appeal allowed where arbitration agreement “invalid”; Arbitration Act not engaged – #746

In Goberdhan v Knights of Columbus, 2023 ONCA 327 , the Ontario Court of Appeal dismissed an appeal of an order dismissing the Defendant’s/Appellant’s motion for a stay of proceedings in favour of arbitration. The motion judge found that the contracts containing the arbitration agreements were invalid for lack of consideration. He therefore refused the stay pursuant to s. 7(2)2 of the Ontario Arbitration Act, 1991 SO 1991, c 17. The Plaintiff/Respondent argued that no appeal was permitted under s. 7(6), which prohibits an appeal of a stay decision. The Court of Appeal disagreed and found that because the contracts and the arbitration clauses were invalid, the Arbitration Act,1991, was not engaged and there was no prohibition on appeal. The appeal was dismissed on its merits.

May 8, 2023May 8, 2023

Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734

In Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc. et al., 2023 ONSC 1827, Justice Steele set aside two international awards (on the merits and as to costs and interest) arising out of a franchise dispute on the basis of a reasonable apprehension of bias on the part of the Arbitrator for failure to disclose that during the arbitration he had been appointed by counsel for one of the parties to serve as sole arbitrator on another matter even though it did not involve a franchise dispute and was in a different industry.

April 24, 2023May 1, 2023

Alberta – Former arbitrator, now judge/facilitator in same matter not biased – #730

In Shannon v Shannon, 2023 ABCA 79, the Appellant appealed the final consent order of a judge of the Alberta Court of Queen’s Bench (as it then was), which was made after a Binding Judicial Dispute Resolution (“BJDR”) process under the Alberta Rules of Court, AR 124/2010 and AR 194/202. The parties signed a Resolution Agreement dated February 16, 2021, which disposed of all the issues in dispute and whose terms were incorporated into a consent order. Both parties had counsel during the BJDR process, but not on the appeal. The Appellant challenged the consent order on the bases that: (1) there was a reasonable apprehension of bias on the part of the judge who facilitated the BJDR process because she had previously acted as arbitrator in the same matter before she was appointed to the Bench; and (2) the Appellant was not competent to enter into the Resolution Agreement that led to the consent order, which should be set aside as null and void. The Court of Appeal dismissed the appeal because it found that the Appellant had consented to having the judge who had previously sat as arbitrator facilitate the BJDR process, but also that a reasonable apprehension of bias allegation could not be established – there is a high burden to show that a superior court judge would not disabuse her mind of anything learned on a prior occasion and there is also a strong presumption that a judge will act judicially.

March 13, 2023March 10, 2023

B.C. – Question of statutory interpretation raises extricable error of law – #718

In Insurance Corporation of British Columbia v EB, 2023 BCSC, Justice Crossin heard an application to set aside an award and both an application for leave to appeal an arbitral award and the appeal, but dismissed the appeal on its merits. The Applicant had correctly identified two extricable errors of law: interpretation of a statute; and whether the test set out in case law had been properly applied. However, he found that the Arbitrator made no legal error. He also dismissed the set aside application because the Arbitrator made no “arbitral error” by exceeding her jurisdiction.

February 27, 2023February 23, 2023

B.C. – Recent shift towards competence-competence in arbitration clause interpretation? – #714

In 3-Sigma Consulting Inc. v Ostara Nutrient Recovery Technologies Inc, 2023 BCSC 100. Justice Matthews granted a stay of proceedings, finding that the, “arguable case standard provides room for a judge to dismiss a stay application when there is no nexus between the claims and the matters reserved for arbitration, while referring to the arbitrator any legitimate question of the scope of the arbitration jurisdiction” relying upon Clayworth v. Octaform Systems Inc., 2020 BCCA 117 at para. 30. Here there was such a nexus, so the matter was referred to the arbitrator to decide jurisdiction.

January 30, 2023August 8, 2023

Alberta – Alberta never bound by Sattva and Teal Cedar – #705

In Esfahani v Samimi, 2022 ABKB 795, the parties’ marriage broke down and they agreed that certain issues would be decided by way of arbitration and other matters by litigation. The Arbitrator issued an award, which Husband appealed and sought to set aside pursuant to s. 44(1) (appeals) of the Alberta Arbitration Act, RSA 2000, c A-43, but not s. 45 (set asides) of the Act. Ultimately, Justice Marion dismissed the appeal and declined to set aside the award, but varied and remitted certain issues back to the Arbitrator. This Case Note focusses on the following two issues:

January 9, 2023March 13, 2023

Lisa’s 2022 Hot Topic #2: Challenging the arbitrator – #700

Parties keep trying, but the threshold is still high for disqualifying an arbitrator. These cases in 2022 provide a sampling of the circumstances in which the threshold is met – and those in which it is not.

December 30, 2022March 13, 2023

Lisa’s 2022 Hot Topic #1: Arbitrator resignation – the when, how, and what next? – #696

Although there is provision in most provincial domestic arbitration legislation and the Model Law for the resignation of the arbitrator, there is little guidance on when the arbitrator may do so and the potential consequences once that occurs. However, two cases released in 2022 are helpful in that they suggest: (1) potential limitations on the discretion of an arbitrator to resign, regardless of the rights contained in the legislation; and (2) how the parties many anticipate this issue and provide for it in their arbitration agreement if it is important, so as to minimize the inevitable disruption that arises when an arbitrator resigns.