Arbitration Matters

August 29, 2024September 3, 2024

Nova Scotia – Court orders stay in favour of arbitration – but with conditions – #858

In Colbourne Chrysler Dodge Ram Ltd., v. MacDonald et al. v Colbourne, MacDougall, and Denny, 2024 NSSC 204, the Court stayed an action in favour of arbitration. Of interest to readers of this blog, the stay was made “subject to the parties moving forward in an efficient and expeditious manner” with the arbitration. The Court also ordered the arbitrator – notwithstanding that none had been appointed – to “in the first instance, determine any jurisdiction issues and/or defences which may be raised in connection with the claims made against [certain parties which were not signatories to the arbitration agreement].”

August 28, 2024September 3, 2024

Québec – Court finds separate arbitration agreement, despite arbitration clause in contract – #857

In Roxboro Excavation Inc. v. Delsan-AIM Environmental Services Inc., 2024 QCCS 2331 the Court declined to hear a dispute between the Applicant, Roxboro Excavation Inc. (“Roxboro”), and the Defendant, Les Services environnementales Delsan-A.I.M. Inc. (“Delsan”), on the grounds that it lacked jurisdiction because the parties had agreed to submit the matter to arbitration. Even though the subject contract included an arbitration clause, the Court did not interpret the clause or otherwise consider whether that clause required the parties to arbitrate the disputes. The Court instead focussed its analysis and decision on a separate agreement the parties had negotiated to resolve their disputes by arbitration and not in court.

August 27, 2024September 20, 2024

International – Award set aside after eulogy reveals friendship between tribunal president and counsel – #856

In Port Autonome de Douala v. Douala International Terminal Co. (original French, my translation), the French Court of Cassation (France’s Supreme Court) upheld the Paris Court of Appeal’s decision (original French, my translation) to set aside an arbitral award rendered by a three-arbitrator tribunal based on doubts as to the impartiality of the presiding arbitrator. Those doubts arose from a eulogy he gave of the lead counsel for one of the parties, which revealed that they were close personal friends and that the presiding arbitrator consulted that counsel “before making any important decision”.

August 16, 2024August 12, 2024

B.C. – Questions of issue estoppel not always extricable questions of law – #855

In Magnum Management Inc. v Chilliwack Hangar Corp., 2024 BCCA 212 [Magnum Management], the Court dismissed an application for leave to appeal an arbitration award. The applicant sought leave on the basis that the arbitrator had failed to apply, or misapplied, the legal principle of issue estoppel, had misapprehended another arbitrator’s reasons in a prior arbitration involving the same contractual clauses, and had not anchored the award in either party’s submissions. The Court found that the applicant had failed to identify an extricable question of law under s. 59(3) of British Columbia’s Arbitration Act, SBC 2020, c. 2 [“Act”].

August 14, 2024August 12, 2024

Québec – Any competent court can issue interim measures regardless of arbitral seat – #854

In GlobeAir Holding GmbH c. Pratt & Whitney Canada Corp., 2024 QCCS 2451, the Court referred a claim to arbitration and, despite confirming its jurisdiction to do so, refused to issue interim measures. The Plaintiffs had argued that the claim, based in statute rather than contractual obligations, fell outside the scope of the arbitration clause, but the Court drew on the broad language of the clause to find otherwise. Then, after confirming that the Court had jurisdiction to issue interim measures even though the dispute was referred to arbitration seated in Ontario, it concluded that no prima facie case could be made to grant Plaintiffs’ request.

August 12, 2024August 9, 2024

Ontario – Partial Summary Judgment Test Applied on Recognition of Foreign Award Motion – #853

In Shanghai Investment Co. Ltd. V. Lu et al., 2024 ONSC 2762 the Chambers Judge concluded that to grant a motion asking that a foreign award be “domesticated” (that is, recognized and made enforceable as a judgment of the Ontario Court), the motion must also meet the additional requirements for partial summary judgment. In this case, the recognition of the foreign award was pleaded as a threshold issue and formed part of a larger enforcement action. As a result, if the motion for recognition were granted, it would bifurcate the action. Although the Ontario Court of Appeal in cases like Butera v. Chown, Cairns LLP, 2017 ONCA 783 (“Butera”) has held that partial summary judgment should rarely be granted as it usually not efficient nor cost effective, the Chambers Judge determined that it was appropriate in this case. Among other factors she noted was that the recognition portion of the action was distinct from the rest and there was no risk of inconsistent findings.

August 2, 2024July 25, 2024

Québec – Petrowest factors applied: arbitration agreement held inoperative in CCAA proceedings – #852

In Arrangement relatif à Endoceutics inc., 2024 QCCS 1482 (CanLII) (“Endoceutics”), the Court, in obiter dicta, cited the stay of proceedings criteria set out in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (CanLII) (“Petrowest”) and held that it – rather than an arbitral tribunal – could rule on one party’s performance of its obligations under a contract governed by an arbitration agreement in the context of the analysis required by section 32(6) of the Companies’ Creditors Arrangement Act, R.S.C., 1985, c. C-36 (the “CCAA”). Section 32 allows a debtor company to disclaim or resiliate any agreement to which the company is a party on the day on which proceedings under the CCAA commence (subject to certain conditions).

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.