notes on new arbitration cases in Canada
Brief summaries of recent cases on arbitration issues, as they are released, from across Canada. Each Case Note provides commentary which helps put the case in context.
Stothers v Kazeks, 2023 ONSC 5021 is a perfect example of the confusion about the med-arb process that I covered in my last case note: Med-arb process was “fundamentally flawed” – #775. If you want to skip to the language of the pathological so-called med-arb clause without the factual background in this case, just scroll down to just above the Editor’s Notes section.
Continue reading “Ontario – A pathological med-arb clause – #781”
In Clinique Ovo inc. v. Elite IVF, 2023 QCCA 1097, the Court determined that an arbitration clause barred some, but not all third-party claims. The factual matrix underlying this decision is convoluted: two agreements; similar but not identical arbitration clauses; and multiple actors. The background facts are sensational: an alleged fraudulent in vitro impregnation involving parties in Geneva and Cyprus; a birth in Monaco; disputed support payments required from a bewildered father; and, inevitably, litigation with third-party claims raising issues of arbitration clause interface with the court proceedings. Against this backdrop, the Court of Appeal decision is grounded in a key and decisive first principle: arbitration clauses bind parties to the agreement, not strangers.
Continue reading “Québec – Arbitration clauses bind parties only, even if parallel proceedings – #780”
In Link 427 General Partnership v. His Majesty the King, 2023 ONSC 2433, the Court refused to enforce an arbitrator’s interim procedural order purporting to compel third-party discovery. This decision highlights the limits of an arbitral tribunal’s procedural authority over strangers to the arbitration agreement, the complexities of which I highlight in my Contributor’s Notes below.
Continue reading “Ontario – Arbitral tribunal lacks power to order third-party discovery – #779”
In Kingsgate Property Ltd. v The Board of Education of School District No. 39, 2023 BCSC 1266, the Court considered the text, context and purpose of s. 31(3) of the (former) Arbitration Act R.S.B.C. 1996 c. 55 (the “Arbitration Act”). (Comparable language appears in s. 59(5) of the current B.C. domestic Act.) That section allowed a court to attach such conditions to an order granting leave to appeal an arbitration award as it considers just. The Court determined that s. 31(3) empowered the Court to impose conditions on granting leave to appeal that will prevent miscarriages of justice. Here, the Court made two such orders sought by the petitioner Kingsgate Property Ltd. (the “Tenant”). Firstly, the Court settled the terms of security with respect to the Tenant’s appeal of an award made in a rent review arbitration (the “Award”). Secondly, the Court ordered a stay of the Award and a default notice the Board of Education of School District No. 39 School Board (the “Landlord ”) had issued for arrears of rent (the “Default Notice”).
Continue reading “B.C. – Court articulates principles on fixing conditions in leave applications – #778”
In Prospector PTE Ltd v CGX Energy Inc, 2023 ONSC 4207, the Court considered an application by Prospector PTE Ltd. (“Prospector”) for the enforcement of an international arbitration award issued in an ICC arbitration. Prospector brought the application pursuant to the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sched 5 (“ICAA”), which incorporates the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). CGX Energy Inc. (“CGX”) opposed the application based on the procedural fairness exception in Article 34(2)(ii)(a) of the Model Law. CGX argued that it was denied the opportunity to fully present its case. However, based on the arbitral award, CGX failed to adduce sufficient evidence to prove its counterclaim. The Court granted the enforcement application. Prospector, together with the Ontario Court of Appeal decision in Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, leave to appeal to the SCC refused, 2018 CanLII 99661 (“Consolidated Contractors”), make clear that the procedural fairness exception in Article 34(2)(ii)(a) is very narrow. A court is not likely to intervene for process or public policy reasons unless the conduct or decision of the tribunal offends the principals of justice and fairness in a fundamental way.
Continue reading “Ontario – High bar to oppose enforcement of international arbitral award – #777”
In We Care Community Operating Ltd. v Bhardwaj, 2023 ONSC 4747, the Court granted the Plaintiff’s motion to compel arbitration under a Co-Ownership Agreement that related to a development property in Toronto. The Court deferred to the arbitrator the question of whether certain corporate entities – which were not signatories to the Co-Ownership Agreement – were nonetheless bound by the arbitration agreement contained in it.
Continue reading “Ontario – Arbitrator to decide whether non-signatories are bound to arbitrate – #776”
In Shaikh v Brar, 2023 BCSC 1285, the applicants (“Tenants”) complained about an unfair mediation-arbitration process and applied for judicial review and an order setting aside a decision of an arbitrator from the B.C. Residential Tenancies Branch (“RTB”). This case note focusses on the med-arb issues it raises, not the relevant statutory regime, the nature of the Arbitrator’s discretion under it, or the standard of review. The Court found that the med-arb process was “fundamentally flawed” and set aside the award because the RTB Arbitrator: (1) used decision-making powers in the mediation stage that should have been reserved for the arbitration stage; and (2) went beyond the scope of appropriate exhortation to settle in the med-arb context.
Continue reading “B.C. – Med-arb process was “fundamentally flawed” – #775”
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).
Continue reading “Québec – “Uniformity principle” drives appointment of French amicus curiae to harmonize Québec law – #774”
In Fotmer v Tilray, 2023 BCSC 1323, the Court held that in an international arbitration, an American company’s multiple connections to British Columbia (including a place of business) precluded court appointment of a Canadian arbitrator over the objection of the opposing party. After considering the neutral nationality principle, the Court found that although the respondent was incorporated in Delaware, its close and obvious connections to British Columbia could give rise to a perception of bias if a Canadian arbitrator were appointed. Such an appointment would risk undermining the integrity of the arbitral process.
Continue reading “B.C. – “Neutral nationality principle” not limited to nationality in Court’s arbitral appointment – #773”
In Williams v. Amazon.com Inc., 2023 BCCA 314 the Court upheld a partial stay of a proposed class action in favour of arbitration. It found that the Chambers Judge did not err when she concluded that an arbitration clause that formed part of a contract of adhesion was not unconscionable or against public policy. In doing so, the Court distinguished the case from the Supreme Court of Canada decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”) on the issue of the applicable standard of review. In Ledcor, the Supreme Court determined that correctness standard applies when reviewing the interpretation of standard form contracts. Here, the British Columbia Court of Appeal found that a deferential standard was applicable because of the highly contextual and fact specific analysis required for determining unconscionability/public policy issues. The fact that a contract of adhesion was involved did not change that conclusion. The Court also distinguished this case from the Supreme Court of Canada decision in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”), where the Supreme Court found an arbitration clause in a contract of adhesion invalid on the basis of unconscionability and, in concurring reasons, as against public policy. The Court distinguished Uber because of, among other things, the “profound” differences that it noted in the two cases between the arbitration clauses at issue and the vulnerability of the plaintiffs.
Continue reading “B.C. – Arbitration clause in contract of adhesion not unconscionable/against public policy – #772”