Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814

In Lochan v. Binance Holdings Limited, 2023 ONSC 6714, the Court refused to stay a proposed class action against the defendant cryptocurrency trading platform in favour of arbitration. The underlying claim concerns allegations that the defendant sold cryptocurrency derivatives without filing a prospectus, contrary to Ontario’s securities laws. The Court held that the arbitration agreement, embedded in the defendant’s website terms and conditions, was both unconscionable and contrary to public policy – based on the cost of the arbitration contemplated by the agreement and based on the clause’s complexity and lack of transparency. The Court’s overarching concern was that the arbitration provisions were not fair to platform users. The Court also provided a helpful difference between unconscionability and a violation of public policy. 

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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.

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Québec – No revocation of a homologated award without the prior revocation of the judgment – #812

In Investissements Immobiliers MB inc. v. SMP Direct inc., 2023 QCCS 4526, the Superior Court dismissed the application of Investissements Immobiliers MB inc (“Plaintiff”) to partially revoke a judgment homologating an arbitration award. In her decision, the Judge ruled that the Plaintiff had delayed acting without justifying the delay and that the application for revocation of the homologating judgment had no reasonable chance of success. The background is complicated. The application followed multiple proceedings between the court and the Arbitrator. The Plaintiff (Claimant in the Arbitration) applied to the court to annul the arbitration award on the basis that the Arbitrator had exceeded his jurisdiction. Then, before that application was decided, the Plaintiff returned to the Arbitrator for revocation of the award based on the fact that there was subsequent information that he had not considered that would affect the result. The Arbitrator refused to hear Plaintiff’s demand before the Court ruled on the Plaintiff’s annulment application. The Court homologated the award. Plaintiff’s application for leave to appeal was dismissed. The Arbitrator then dismissed the application for revocation. He found that the Court must revoke the homologating judgment first, which made the issues ruled in the arbitration award revocation issue because the homologating judgment give the award the force of res judicata. The Plaintiff’s later return to the court to revoke the homologating judgment was too late – five months later. The lesson? An arbitrator has no jurisdiction to revoke an award that has been homologated in a court judgment.

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B.C. – “Lacuna” identified in B.C.’s domestic arbitration scheme? – #811

In Bollhorn v. Lakehouse Custom Homes Ltd., 2023 BCCA 444, One justice of the Court of Appeal for British Columbia referred an application for leave to appeal from the decision of an arbitrator to a full panel of that Court. The Court identified what it termed “a gap [in the legislative scheme] that may confound the general understanding of ‘where there is a right, there is a remedy’”. That gap arises from the apparent application of the Vancouver International Arbitration Centre [“VanIAC”] expedited arbitration rules to claims under $250,000, which preclude appeals unless the parties agree otherwise. 

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Jim Reflects (2023): Browne v Dunn is just a rule of fairness: a comment on the Vento case – #810

I’ll take Vento Motorcycles, Inc. v. United Mexican States 2023 ONSC 5964 (Vento) as my top pick for 2023. It’s a reminder that just because the strict rules of evidence may not apply in an arbitration doesn’t mean the rationale for some of those rules should be ignored. In this case, it was an alleged breach of the rule in Browne v Dunn, the very rule all Commonwealth litigators had beaten into their heads by their professors, their principals, or, for some of the less fortunate among us, a judge. At heart Browne v Dunn is about fairness, and ensuring fairness is a, perhaps the, cornerstone of arbitration.  

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Timothy Reflects (2023): Are arbitral tribunals soft targets for bad actors? – #809

This case note reflects on emerging procedural and systemic vulnerabilities of arbitration, a timely and important topic in light of the recent decision of the High Court of England and Wales in  Process & Industrial Development v Federal Republic of Nigeria, [2023] EWHC 2638 (Comm) (“P&ID v Nigeria”). In that case, Justice Robin Knowles remarked: 

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Lindsay Reflects (2023): Enforcement of International Awards: The Procedural Fairness Exception – #808

In this commentary, I provide key takeaways for parties that seek to bring or oppose an application to enforce an international arbitration award in Canada. I focus on three decisions issued by the Ontario Superior Court of Justice in 2023: Costco Wholesale Corporation v TicketOps Corporation, 2023 ONSC 573 (“Costco”), Prospector PTE Ltd. v CGX Energy Inc, 2023 ONSC 4207 (“Prospector”), and Xiamen International Trade Group Co Ltd. v LinkGlobal Food inc., 2023 ONSC 6491 (“Xiamen”). What is the procedural fairness exception and how does it work?

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Chris Reflects (2023): Arbitrator Bias and the Unanimous Award – #807

When will a court confirm a unanimous arbitral award issued by a three-person panel where one of those arbitrators was biased? This case note reviews three cases that try to answer that question. In each, the Court applied the Model Law. In one recent casethe Ontario Superior Court of Justice upheld the award, finding that the bias did not cause actual prejudice. The other two cases, one from India, the other from Germany, reached the opposite conclusion, highlighting the pernicious, and often unseen, effect that bias can have on the deliberative process.  

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Stephanie Reflects (2023): What’s the Standard? Reviews, Appeals and “Decisions of the Matter” – #806

For better or for worse, parties can challenge arbitral decisions through multiple avenues, whether through a review of a preliminary jurisdictional ruling, set-aside application, or appeal. Arbitration case law in 2023 highlighted a striking lack of consistency between the standards of review and appeal applied in each of these different avenues.

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Josh Reflects (2023): Multi-tier dispute resolution clauses: jurisdiction and limitations issues – #805

Canadian appellate courts have seldom made significant rulings on multi-tier dispute (sometimes called “step” or “cascading”) resolution clauses, so it is difficult to discern clear trends. A recent decision of the Hong Kong Final Court of Appeal (“HKFCA”) is of interest. It considered what forum has jurisdiction to determine whether prior steps in a multi-tier dispute resolution clause have been satisfied. 

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