Arbitration Case Notes Archives - Page 8 of 92

July 31, 2024July 25, 2024

Ontario – Court won’t intervene in arbitration to order disclosure against a party – #851

In Medjuck v Medjuck, 2024 ONSC 2980,the Court dismissed an application for a de novo hearing to decide the matter of disclosure requests that were denied in part by the Arbitrator on several grounds, including that he did not have jurisdiction to grant some of the requests. The Court held that it did not have authority to intervene in the arbitration so as to hear and rule on the disclosure request de novo. It found that the request did not fall under any of grounds listed at section 6 (court intervention limited) of the Ontario Arbitration Act, 1991, SO 1991, c 17.

July 29, 2024July 25, 2024

Ontario – Missed Opportunity re Implications of Set-Aside Test for Procedural Unfairness? – #850

In Vento Motorcycles, Inc. v. United Mexican States, 2024 ONCA 480 (CanLII) (for ease of reference, “Vento-CIPPIC“), the Court addressed The Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic’s (“CIPPIC’s”) application to intervene in Vento’s appeal of last year’s Ontario Superior Court of Justice’s dismissal of Vento’s application to set aside a 2020 international arbitration award [Vento Motorcycles, Inc. v. United Mexican States, 2023 ONSC 5964 (CanLII), (“Vento”)]. That and related decisions were discussed in several Arbitration Matters previous blogs, including 810, 796, 572, and 807. CIPPIC’s application was unsuccessful. The Court rejected its application for three reasons: (1) it hadn’t shown a sufficient link between its expertise and the issues in the appeal or its unique perspective; (2) the higher threshold to be granted leave to intervene in a private dispute; and (3) the risk CIPPIC’s intervention would unjustifiably expand the scope of the appeal.

July 22, 2024July 25, 2024

Federal – Competence- competence: a rule of chronological priority – #849

In Attorney General of Canada v. Aéroports de Montréal, 2023 FC 1562, the Court decided the issue of a tribunal’s jurisdiction under section 16(3) of the UNCITRAL Model Law, which is incorporated into the Commercial Arbitration Act, R.S.C., 1985, c. 17 as the “Commercial Arbitration Code” (the “CAC”). The tribunal had made a preliminary ruling that it had jurisdiction over the commercial dispute between the parties. The Court upheld the tribunal’s finding. The issue involved a determination of whether the arbitration clause in one of three related contracts applied. This case reiterates the following key arbitration principles: the power of an arbitral tribunal to rule on its own jurisdiction does not limit the powers of the Court to weigh and make its own findings of fact, on the basis of the evidence, and to consider and rule de novo on that jurisdiction; the Court must take the pleaded facts by a plaintiff as true on a jurisdiction motion; and if both interpretations of an arbitration agreement proposed by the parties are possible, priority must be given to the interpretation that favours the jurisdiction of the arbitral tribunal.

July 22, 2024July 25, 2024

B.C. – Insufficiency of Reasons Breached Due Process – #848

In Sound Contracting Ltd. v Campbell River (City), 2024 BCSC 933, the court allowed the set- aside challenge of an arbitral award and remitted the matter to the arbitrator on the basis that the arbitrator had failed in his duty under natural justice to provide adequate reasons. The arbitrator concluded that the arbitration was time-barred but did not explain why he had reached that conclusion. In so doing, the court treated the set-aside challenge as akin to an appeal, where insufficient reasons amount to an error of law. In so doing, the court applied principles in the civil (appeal) and administrative (judicial review) contexts to the set aside of an arbitral award. This stands in contrast to how this issue has been treated internationally, where the matter of whether insufficiency of reasons is a breach of procedural fairness is not well-settled.

July 22, 2024July 25, 2024

Ontario – Motion to strike civil claims in court waives arbitration rights – #847

In RH20 North America Inc. v. Bergmann, 2024 ONCA 445, the Court upheld the dismissal of a motion to stay court proceedings. Before a motions judge, several defendants succeeded in striking a number of civil claims on the basis that they disclosed no reasonable cause of action. But seeking such relief in court was treated as waiver of an agreement to arbitrate disputes. As a result, instead of international arbitration in London, breach of contract and conspiracy claims will now be determined by the Ontario courts.

July 5, 2024July 2, 2024

B.C. – Danger of Bifurcated Proceedings – #846

In G & T Martini Holdings Ltd. v. Desert Properties Inc., 2024 BCSC 828, the Court dismissed a petition under s. 58(1)(c) of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to set aside an arbitral award after a bifurcated arbitration. The Petitioner claimed that the Arbitrator had changed the rationale of the earlier liability award and was precluded from calculating damages in the manner it did at the damages stage after the Arbitrator’s earlier award on liability. The Court found that the Arbitrator did not improperly change his decision on liability in the damages award, but instead merely elucidated upon his rationale for the decision he made in the liability award.

July 3, 2024August 28, 2024

Québec – Arbitrator Need Not Recuse Himself for “Conflict” Created by Party – #845

In Groupe Marsan inc. c. Centre Canadien d’Arbitrage Commercial (CCAC), 2024 QCCS 1838, the Court dismissed the application of Groupe Marsan (“Marsan”), which sought review of a decision by the Arbitrator, who refused to recuse himself (the “Arbitrator’s Decision”). Concurrent with the ongoing arbitrations, the Arbitrator was also acting as counsel in a parallel proceeding before the Court involving different parties, in which Marsan’s counsel in the arbitrations acted for the opposing party. According to Marsan, this situation raised a reasonable apprehension of bias and the Arbitrator’s refusal to recuse himself violated procedural fairness. The Court found that the Arbitrator rightly concluded that the situation of concurrent representation was created by Marsan’s counsel and that the Arbitrator’s Decision met the standard of procedural fairness.

July 2, 2024July 2, 2024

Alberta – Arbitrator not functus for issuing consent award after party denied settlement – #844

In Caroll v Caroll, 2024 ABKB 227, the Court found that the Arbitrator was not functus officio for issuing a Consent Award after a settlement was reached in a med-arb process. One party denied the settlement but argued that, in any event, the Arbitrator’s jurisdiction was over after the settlement agreement and it was improper to “crystallize” the agreement into the Award. The Court dismissed this argument and found that there was a settlement. And the process was not unfair. The Arbitrator did not “conflate” the mediation and arbitration phases of the proceeding by terminating the proceeding after the settlement agreement rather than proceeding to arbitration once one party denied the settlement.

June 21, 2024June 21, 2024

B.C. – Court strictly enforces arbitration rules to foreclose leave to appeal award – #843

In Bollhorn v Lakehouse Custom Homes Ltd., 2024 BCCA 192, the Court dismissed an application by the Appellant/Plaintiff Robert Bollhorn for leave to appeal an award of an arbitrator. This outcome resulted from the Court’s application of Rule 27 of the Vancouver International Arbitration Centre (“VanIAC”) Domestic Arbitration Rules (the “Rules”) and Section 59(3) of the Arbitration Act, SBC 2020, c 2. The former operates to foreclose appeals where the award is issued under the Expedited Procedures of the Rules, which the Court found applied to the case. The latter provides that there can be no appeal on a question of law where the arbitration agreement – in this case the parties’ adoption of the Rules – expressly disallows it.

June 19, 2024June 25, 2024

Ontario – Arbitrator’s relationship with party’s lender not sufficient for bias – #842

In Ballantry Construction Management Inc. v GR (CAN) Investment Co. Ltd., 2024 ONSC 2129 (“Ballantry”), the applicant, Ballantry Construction Management Inc. (“Applicant”), brought a motion for (among other things) an interlocutory injunction to restrain the Respondent from transferring or encumbering its assets pending the hearing of: (1) the Applicant’s application to enforce two arbitral awards; and (2) the Respondent’s application to set aside the awards on the grounds of a reasonable apprehension of bias on the part of the Arbitrator. On the second issue, the Court concluded that while a “business relationship” between a party and the Arbitrator may create a reasonable apprehension of bias, here, the fact that the Arbitrator was a director and shareholder of the parent of a company that had provided a loan to the Respondent did not support a finding of bias. This case considers how close a relationship between an arbitrator and a party is “too close” if a party seeks to set aside an award based on alleged arbitrator bias.