Category: Arbitration Case Notes

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.

Posted on

Ontario – Breach of arbitration clause gives rise to cause of action – #894

In Fowlie et al v Wrestling Canada Lutte et al, 2024 ONSC 7196 (“Fowlie”), the Court considered the appeal of a motion judge’s order declining to strike a breach of contract claim made by a sports dispute resolution expert (“Expert”) against Wresting Canada Lutte (“WCL”). The Expert claimed that WCL had breached their contract by failing to engage in a contractual dispute resolution process before WCL terminated the contract without cause. The dispute resolution clause in the parties’ contract included the option to refer disputes to arbitration. The Court granted the appeal and struck the Expert’s claim. The Court held that the dispute resolution clause only applies when a “dispute” arises. Because there was no dispute as between the Expert and WCL about the validly of the without-cause termination while the contract was in force, there was no “dispute” to which to apply the dispute resolution clause. This decision is surprising in view of the separability principle that arbitration agreements survive contract termination. Arbitration jurisprudence suggests that the arbitration agreement in the contract between WCL and the Expert should have been treated as an independent agreement that survived termination of the main contact. 

Continue reading “Ontario – Breach of arbitration clause gives rise to cause of action – #894”
Posted on

Federal – Binding Mediation not Arbitration – #893

In RS Marine Ltd. v. M/V Terre Neuvas (Ship), 2024 FC 1825, the Court was tasked with considering whether to stay a proceeding in favour of arbitration in a dispute arising from a joint venture agreement between the plaintiffs—RS Marine Ltd. (“RSM”) and Murphy Marine Ltd. (“MML”)—and the French-based defendant SPM Ocean SAS (“SPM”). The key issue before the Court was whether a dispute resolution clause in the subject agreement required the parties to arbitrate their disputes. Relatedly, the Court had to consider if it had the authority to rule on this point or if it ought to be left to an arbitrator to rule on their own jurisdiction.

Continue reading “Federal – Binding Mediation not Arbitration – #893”
Posted on

Alberta – Court rejects Ontario approach to stays of enforcement – #892

In Inter Pipeline Ltd v Teine Energy Ltd, 2024 ABKB 740 (“Inter Pipeline”), the Court set out the three-part test a party must meet to obtain a stay of enforcement of a domestic arbitration award in Alberta, rejecting as “not principled” the two-part test that applies in Ontario. The Court also addressed the argument that refusing a sealing order in these circumstances would put a chill on challenges to arbitral awards.

Continue reading “Alberta – Court rejects Ontario approach to stays of enforcement – #892”
Posted on

International – Agreement to Arbitration and Enforcement Jurisdiction a Package – #891

In Republic of India c. CCDM Holdings, 2024 QCCA 1620 the Court was asked to determine three appeals relating to the enforcement of arbitral awards in the context of: (1) both the commerciality exception and waiver in the State Immunity Act; (“SIA”) (2) seizure before judgment in escrow of sums held by the Montreal-headquartered International Air Transport Association (“IATA”) for the benefit of two Indian state entities before the question of their immunity had been decided on the merits; and (3) the temporal scope of provincial legislation passed in response to said seizures at the IATA.  The Court concluded that: (1) India had waived immunity under the SIA by becoming a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”) and by agreeing to arbitration under the 1998 India-Mauritius bilateral investment treaty  (“India-Mauritius BIT”); (2) the first-instance court had not erred in authorizing ex parte seizure before judgment in advance of the question of immunity being decided on the merits; and (3) the provincial legislation was effective retroactively to the effective date given therein but no further back in time – the seizure of sums held by the IATA prior to this date remained untouched by the legislation.

Continue reading “International – Agreement to Arbitration and Enforcement Jurisdiction a Package – #891”
Posted on

Ontario – Appeal prohibition applies beyond limits of arbitral appointment applications – #889

In Toronto Standard Condominium Corporation No. 2299 v Distillery SE Development Corp., 2024 ONCA 712, the Court held that there could be no appeal from an order appointing an arbitrator, even though the order did not explicitly indicate that it was made pursuant to s. 10 of the Arbitration Act, 1991, SO 1991, c 17. Section 10(1) provides that the court may appoint an arbitrator on a party’s application if, for example, the arbitration agreement provides no appointment procedure. Pursuant to s. 10(2), there is no appeal from the court’s appointment. Here, the application for an order appointing an arbitrator did not refer to s. 10 of the Arbitration Act but did refer to Rule 14.05 of Ontario’s Rules of Civil Procedure, RRO 1990, Reg 194 (the general rule pertaining to applications and what types of relief may be sought by application, including a determination of rights under a contract). This reference to Rule 14.05 did not engage s. 6 of the Ontario Courts of Justice Act, RSO 1990, c C.43, which sets out the matters over which the Court of Appeal has jurisdiction and provides for an appeal as of right in respect of most final orders of Superior Court judges. The appeal of the appointment order was quashed based on the appeal prohibition in s. 10(2) of the Arbitration Act.

Continue reading “Ontario – Appeal prohibition applies beyond limits of arbitral appointment applications – #889”
Posted on

Colin’s 2024 Hot Topic: ONCA weighs in on Bias in Aroma – #888

In Aroma Franchise Company, Inc. v Aroma Espresso Bar Canada Inc., 2024 ONCA 839, the Court overturned a decision of the Ontario Superior Court of Justice, which had set aside two international arbitration awards on the basis of the existence of a reasonable apprehension of bias on the part of the Arbitrator.  Undoubtedly, this was the arbitration case of 2024.  The first instance decision and related proceedings have previously been canvassed by Arbitration Matters (see Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734 – Arbitration Matters, Lisa Reflects (2023): Aroma – the blockbuster case of 2023? – #804 – Arbitration Matters, and Ontario – Arbitrator no jurisdiction to hear challenge for bias after partial final award – #691 – Arbitration Matters). It is a multiple appointments case. It arose out of a decision by the Arbitrator to take on a second appointment by the same counsel acting in the Aroma arbitration that was only disclosed by accident with the issuance of the final award.  The first Instance decision generated buzz in the arbitration community for, among other things: (1) the Judge below finding it was a “bad look” for the Arbitrator to have accepted an appointment in another arbitration part way through the Aroma arbitration by the same lead counsel in both matters; (2) the Judge considering relevant the parties’ pre-appointment communications on the criteria for the arbitrator to be appointed; and (3) the unresolved question of the impact, if any, of an arbitrator’s financial interest in appointments. It is the second issue that has received the most commentary on this decision.

Continue reading “Colin’s 2024 Hot Topic: ONCA weighs in on Bias in Aroma – #888”
Posted on

Jonathan’s 2024 Hot Topic – The “overwhelming principle” applied – #886

In Creative Energy Vancouver Platforms Inc. v. Concord Pacific Developments Ltd., 2024 BCCA 128, the Court granted leave to appeal an award on the basis that there was arguable merit to the position that a panel of arbitrators had erred in law by allowing the factual matrix and post-contractual conduct to overwhelm a contract—effectively creating a new agreement.  A vendor and purchaser arbitrated the application of a zoning by-law to a land purchase agreement:  higher density under the by-law equated to higher compensation owing to the vendor.  The arbitral tribunal ruled in the vendor’s favour.  On preliminary review at the leave to appeal stage, the Court found it arguable that the tribunal had erred in law by interpreting the factual matrix in a manner that was isolated from the words of the purchase agreement.  The Court said that resolution on appeal would require careful consideration of the tribunal’s reasoning and the evidentiary record.  Arguments on the merits of the appeal have recently taken place and a decision from a division of the Court is pending.

Continue reading “Jonathan’s 2024 Hot Topic – The “overwhelming principle” applied – #886”
Posted on

Jim’s 2024 Hot Topic – The duty of good faith in domestic arbitration – #885

Rather than picking a specific case for a Holiday Hash-over I’ve opted for a broader theme: since arbitration is contractual, to what extent do/should the principles set out in the SCC’s 2014 decision in Bhasin v. Hrynew  2014 SCC 71 (“Bhasin”) and its descendants apply to a Canadian domestic arbitration and what practical difference might it make?

Continue reading “Jim’s 2024 Hot Topic – The duty of good faith in domestic arbitration – #885”