Category: Arbitration Case Notes

In The Russia Federation v. Luxtona Limited, 2019 ONSC 7558, Mr. Justice Michael A. Penny held that a party to a challenge of an arbitral tribunal’s jurisdiction under articles 16 and 34 of the UNCITRAL Model Law on International Arbitration may not file fresh evidence as of right.  A party must obtain leave to do so by providing a “reasonable explanation” for why new evidence is necessary, including why that evidence was not, or could not have been, put before the tribunal in the first place.  Abiding by the Mexico v. Cargill, Incorporated, 2011 ONCA 622 approach restricting courts to a “review” and not a trial de novo, Penny J. held that competence-competence was best served by requiring parties to put their “best foot forward” before the arbitral tribunal and not re-try the jurisdictional issue with additional evidence informed by hindsight.

In Stegenga v. Economical Mutual Insurance Company, 2019 ONCA 615, the Ontario Court of Appeal held that the nature and subject matter of a dispute, assessed on the facts giving rise to it, determine jurisdiction. The legal characterization of a cause of action does not determine whether a claim falls within the jurisdiction of the court or an alternative dispute process created by legislation.  Though an insured raised an independent cause of action of alleged bad faith in the handling of statutory benefits and sought remedies which the statutory tribunal could not grant, litigation was barred.  The legislation used broad phrase of “in respect of” to link “dispute” and “entitlement” and captured the facts alleged.

In City of Toronto v. Resource Productivity & Recovery Authority, 2020 ONSC 599, Madam Justice Katherine E. Swinton dismissed an attempt by non-parties to enjoin a private arbitration from proceeding.  Though one of the arbitral parties exercised duties under Ontario legislation, the dispute stemmed from a bilateral agreement and involved no exercise of statutory power of decision subject to judicial review.  Swinton J. observed that the non-parties argued the arbitrator lacked authority but neither of the arbitral parties challenged the arbitrator’s jurisdiction.

In Hydro Hawkesbury v. ABB Inc., 2020 ONCA 53, the Ontario Court of Appeal enforced an undertaking to arbitrate despite the undertaking being contained in terms which had not been specifically brought to the resisting party’s attention or provided in materials exchanged.  Those terms were readily available and specifically referred to in documents creating the contractual relationship and a “fairly sophisticated corporate consumer” doing business with a foreign supplier in international markets would reasonably be expected to expect and to review the terms.  Also, in first instance, the applications judge also accepted that the application to stay was timely despite being filed well after the defence.

Master Karen E. Jolley in Evans v. Mattamy Homes Limited, 2019 ONSC 3883 and Master Robert A. Muir in Wang v. Mattamy Corporation, 2019 ONSC 6675 each dismissed Plaintiffs’ attempts to resist application of an arbitration agreement based on arguments that the agreements were invalid due to unconscionability and undue influence.  Both concluded that Plaintiffs failed to demonstrate any of the elements required to invalidate the agreements.  Any alleged pressure was market driven, due more to Plaintiffs vying to purchase a property from a finite number being sold by Defendant and subject to ongoing sales efforts to other prospective purchasers.