IC2 Fund v Wires, 2023 ONSC 3879 addresses: (1) whether it is appropriate for a party seeking to enforce an international arbitral award to correct the title of proceedings in an enforcement proceeding where both abbreviated and formal names were used interchangeably in the arbitration; (2) whether an applicant using an abbreviated name has standing; and (3) whether a party resisting enforcement can do so on the basis of an arbitrator’s alleged partiality after such allegations were addressed in the arbitration, which decision was not challenged. Here, the applicant (the respondent in the arbitration) brought an application to enforce an arbitral award (the “Award”) relating to its costs of the arbitration. In the title of proceedings in the notice of application, the applicant used an abbreviated corporate name. In the absence of confusion around the party’s identity, including because the respondent (the applicant in the arbitration) had used both the formal and abbreviated names, the court granted leave to amend the notice of application to reflect the full corporate name and resolved the standing issue on the same basis. The court also recognized the Award, rejecting the allegations of partiality of the arbitrator. The respondent had previously made allegations in the arbitration about the arbitrator’s lack of impartiality, which were rejected. The respondent did not challenge this decision.
Background facts – In 2019, the parties entered into a “Bespoke Funding Agreement” (the “Agreement”). The relevant parties were Mr. Wires and “Profile Investment, incorporated … for and on behalf of IC2 Fund, SICAV-FIS, a regulated company existing under the Laws of Luxembourg whose registered number is B205456 in the Company Register of Luxembourg […]” (para. 7). The Agreement specified that any related disputes would be addressed in arbitration at the Arbitration Institute of the Stockholm Chamber of Commerce (the “SCC”).
The Arbitration – The claimant, Mr. Wires (the respondent in the Ontario application), initiated a Request for Arbitration against the other party, who he identified as “IC2 Fund, SICAV-FIS formally known as La Francaise IC2 Fund, SICAV FIS Registration No. B205456 Luxembourg” (para. 46) [emphasis added]. The SCC issued an Award dismissing Mr. Wires’ claims and ordering him to pay IC2 Fund, SICAV-FIS’s costs (in excess of GBP 100,000). In the Award, the arbitrator identified the respondent (the applicant in the Ontario proceeding) by the wrong registration number and did not use the full corporate name when awarding costs.
The Ontario Application – The applicant (respondent in the arbitration), identifying itself using its abbreviated corporate name “IC2 Fund, SICAV-FIS”, brought an application seeking recognition and enforcement of the Award. Mr. Wires sought to have the application stayed or dismissed because:
- the named applicant (respondent in the arbitration), IC2 Fund, SICAV-FIS, was not a legal entity and did not exist at law in Canada or Luxembourg, and
- the other information in the Award identified the successful respondent in the arbitration incorrectly as an entity with Luxembourg business registration number B148892, which was an entity that was placed into bankruptcy.
The Court considered three issues.
Issue 1: Should the Applicant be granted leave to amend the Notice of Application? – The applicant moved to amend the title of proceedings to identify itself by its full corporate name: “LA FRANÇAISE IC 2, SICAV-FIS also known as IC2 Fund, SICAV-FIS”. Mr. Wires argued that the court did not have jurisdiction to amend the title of proceedings as this, “would be prejudicial to him, is not tenable at law and, if the amendment were to be granted, the amended pleading would disclose no reasonable cause of action” (para. 31).
Both parties relied on expert evidence from Luxembourgian lawyers on the issue of whether it was permissible for the applicant to use the abbreviated corporate name in the title of proceedings. The court preferred the evidence given by the applicant’s expert, who cited Article 6 of the Luxembourg Company Register Act of 19 December 2002, which reads: “Any commercial company with legal personality shall be required to apply for registration. The latter shall indicate:…the company name or business name and, where appropriate, the abbreviation and commercial sign used; …” (para. 42). The court concluded that this language permitted companies to use abbreviated names to identify themselves in commercial agreements and arbitration proceedings.
The respondent also sought to rely on a paragraph in the Award which named the other party as “IC2 Fund, SICAV-FIS[, … a] company existing under the laws of Luxembourg, registered number B148892” (para. 16). While the arbitrator referenced this registered company number, which belonged to a company in bankruptcy, the court held that this was “clearly an error” (para. 48) in the Award and that the respondent had full knowledge of who the arbitrator intended to reference: the company with the registered number B205456 was the correct party.
Overall, given that the respondent had identified the opposing party using the abbreviated name (“IC2 Fund, SICAV-FIS”) in his Request for Arbitration and that this name was referenced in the Agreement, the court was “satisfied that there was no confusion on the part of Wires about the identity of the entity” (para. 47) and granted the applicant’s motion to amend the title of proceedings in the application for recognition and enforcement.
Issue 2: Should the application be stayed or dismissed for lack of standing? – The respondent to the application argued that the applicant was technically not the successful party referred to in the Award, and thus not allowed to enforce it. The court rejected this argument based on the reasoning set above.
Although the respondent also sought to rely on the Business Names Act, R.S.O. 1990, c. B.1 for this argument, the court held that the Act did not apply to the applicant’s company because: (1) the Agreement indicated that it was were a Luxembourg company with a Luxembourg address; (2) the Agreement indicated that parties’ rights shall be governed by English and Welsh laws unless otherwise specified in writing; (3) there was no evidence that it operated in Ontario; and (4) there was no evidence that it publicly identified itself in Ontario with a name other than its own (which would have been offside the Act, if it applied).
Issue 3: Should the Arbitration Award be recognized? – The respondent to the application argued that the Award should not be recognized because the arbitrator was chosen contrary to the parties’ agreement and contrary to English law. The respondent relied on Article 36(1)(a)(iv) of the Model Law on International Commercial Arbitration (the “Model Law”), which provides that recognition or enforcement of an arbitral award may be refused if the party against whom it is invoked, “furnishes proof that the composition of the arbitral tribunal or the arbitration procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.”
Here, the parties agreed that their arbitrator would, “[have] no past, present or potential relationships with third party litigation funding companies or arbitration institutes in London …” (para. 80). The respondent argued that the arbitrator, however, had (two years prior) jointly prepared for and participated with the applicant in a panel at which they discussed security for costs in international arbitration.
The respondent to the application also relied on Halliburton Company (Appellant) v Chubb Bermuda Insurance Ltd., [2020] UKSC 48 (Halliburton), which is considered one of the leading common law decisions on arbitrator disclosure to meet the obligations to be impartial and not to appear biased. Also Article 12 of the Model Law provides that an arbitrator “shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence.”
Prior to this proceeding, however, the respondent had unsuccessfully challenged the arbitrator’s partiality on these grounds in the arbitration. The arbitrator rejected this challenge and the respondent did nothing further. Accordingly, the court found that it would be an abuse of process to relitigate this issue.
The court recognized and enforced the Award.
Contributor’s Notes
First, while this case does not depart from the impartial arbitrator requirements outlined in Article 12 of the Model Law and Halliburton, it presents an important qualification. A court will not allow a party to relitigate a challenge to an arbitrator’s impartiality if they did so unsuccessfully in the arbitration and did not challenge such a decision – the court rejected that Article 36(1)(a) of the Model Law could be used for this purpose.
Second, this case is also important in that the court allowed a party seeking enforcement of an arbitral award to change the title of proceedings – which is somewhat unusual. In this case, the party resisting the amendment had in fact used various names for the applicant throughout the arbitration, which undermined his position of prejudice. The arbitrator was also found to have made an error in describing the parties. While this case shows there can be recourse where various names are used for a party, it is still prudent to give consideration to these issues at the early stages of an arbitration. Otherwise, such errors may hinder enforcement efforts.
The contributor thanks Simon Minich, a student at Dentons Canada LLP, for his assistance with this case note.