Federal – Pirating action stayed under New York Convention – #610

In General Entertainment and Music Inc. v. Gold Line Telemanagement Inc., 2022 FC 418, Justice Fothergill of the Federal Court allowed an appeal of the prothonatory’s order and stayed an action for breach of certain provisions of the Copyright Act, the Trademarks Act and the Radiocommunication Act in favour of arbitration seated in Bermuda. In doing so, he applied Article II.3 of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the Supreme Court of Canada’s jurisprudence on staying court proceedings in favour of arbitration.  The prothonatory erred in applying the law relating to a forum selection clause to an arbitration clause.

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Ontario – Clause specifying non-exclusive attornment to courts doesn’t override arbitration clause – #609

In Husky Food Importers v. JH Whittaker & Sons, 2022 ONSC 1679, Justice Conway granted a stay of proceedings in favour of arbitration despite an allegation that no underlying agreement was ever finalized and notwithstanding a clause stating that the courts of New Zealand had non-exclusive jurisdiction.

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Ontario – Arbitrators can decide non-legal business disputes, but not in this case – #608

The case 1107051 Ontario Ltd. v. GG Kingspa Enterprises Limited Partnership, 2022 ONSC 1847 concerned the jurisdiction of an arbitrator to decide a business dispute that was not legal in nature. The Applicant, 1107051 Ontario Ltd. (“110”), applied to “set aside” a decision of an arbitrator to assume jurisdiction over a dispute about whether a major real estate development project at King Street West and Spadina Avenue in Toronto (the “Project”) should include a hotel component when the parties were deadlocked on the issue. Section 17(8) of the Ontario Arbitration Act allows a party to apply to the Court to “decide” a jurisdictional issue if, as here, an arbitrator decides it as a preliminary question, as opposed to with the merits. Justice McEwen granted the “set aside”. He agreed with the arbitrator that the dispute was of a business nature and not legal and, further, that parties could arbitrate such non-justiciable disputes if they clearly and specifically intended to do so. In this case, although the arbitration clause was described as broad, the dispute was beyond its scope because the dispute was required by the clause to arise “under this Agreement”. That meant the dispute had to be about more than just anything to do with the Project. It had to concern the rights and obligations of the parties under the Agreement. Although a hotel was contemplated as part of the Project, it was not a required component. Further, express authorization to determine a business issue would have been necessary.

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Ontario – Best practices: pre-appointment communications and application to appoint arbitrator – #607

In Magna International Inc. v Granite Real Estate Inc., 2022 ONSC 2200, Justice Myers granted the application of Magna, the tenant in a lease agreement, for an order appointing an arbitrator to fix the rent for a renewal term of the lease. The parties agreed that the tenant had validly renewed the lease, but could not agree on the rent for the renewal period. Respondent Granite, the landlord, opposed the appointment of the arbitrator for two reasons: (1) the evidence in support of the application was insufficient; and (2) the arbitration clause in the lease was invalid because it contained permissive, rather than mandatory, language and was too vague because it did not specify either the seat or the applicable rules of the arbitration. Justice Myers set out the preferred approach for both communicating with the proposed arbitrator in circumstances in which the parties are not cooperating and the kind of evidence that should be adduced on an application for a court order appointing the proposed arbitrator, using the analogy of the process for the court appointment of a receiver/trustee in bankruptcy. Also, he found that the issues relating to the validity of the arbitration clause were to be referred to the arbitrator under the competence-competence principle.

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Ontario – Continuing confusion over nature of court review of arbitration – #606

In PCL Constructors Canada Inc. v Johnson Controls, 2022 ONSC 1642, Justice Conway heard and dismissed four applications, two by PCL and two by Johnson, relating to two arbitrations arising out of disputes over the construction by PCL of the Humber River Regional Hospital (“the Humber Arbitration) and the Milton District Hospital (“the Milton Arbitration”). PCL  brought applications to the court, pursuant to s. 17(8) of Ontario Arbitration Act, 1991, S.O. 1991, c. 17 (“the Act”), to “decide the matter” of the tribunal’s ruling on jurisdiction as a preliminary matter.  Justice Conway applied the “correctness” standard of review; the arbitrators both ruled correctly that they had jurisdiction and that the prerequisites to arbitration in the arbitration clause did not constitute conditions precedent to arbitration.  Johnson brought applications under s. 8(2) of the Act, which provides that the court may determine any question of law that arises during an arbitration on an application if the parties or the tribunal consent. The issue concerned a party’s right under the contract to apply to the court for a reconsideration of the arbitrator’s determination.  That right had not crystallized because the arbitration continued and no determination had been made.

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Newfoundland and Labrador – No attornment to court jurisdiction where arbitration mandatory under treaty – #605

In Newfoundland and Labrador v Nunatsiavut Government, 2022 NLCA 19, the Court of Appeal of Newfoundland and Labrador (the “Court”) allowed the Province’s appeal of a trial decision in respect of a dispute pursuant to the Labrador Inuit Land Claims Agreement(the “Treaty”). The Court found that the parties were required to arbitrate their dispute, even though this issue was raised for the first time on appeal. At first instance, the trial judge agreed with the claim of the Nunatsiavut Government (“Nunatsiavut”) against the Province for a share of revenue related to the exploitation of land subject to the Treaty. On appeal, the Province challenged, for the first time, the jurisdiction of the Supreme Court of Newfoundland and Labrador (the “Superior Court”) to have adjudicated the matter in light of the requirement for mandatory arbitration under the Treaty. Central to the Court’s finding on appeal was its determination that the parties could not “attorn” to the Superior Court’s jurisdiction despite the fact that the Province did not raise the issue of jurisdiction before the trial judge. The Court found that “[56] [g]iven the clear language of the treaty that the parties must proceed to arbitration to resolve the disputes over revenue sharing, the parties cannot ‘attorn’ to the jurisdiction of the Court because the jurisdiction of the provincial Superior Court has been removed by these terms.

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