Arbitration Matters

June 7, 2023June 5, 2023

B.C. – High bar to arbitrate amended claims after attornment – #744

In Hawthorn v Hawrish, 2023 BCCA 182, the BC Court of Appeal addressed the often-difficult question of “who decides” key issues where arbitration agreements and court proceedings collide. The appeal concerned an amended notice of civil claim, which the defendants – who had already attorned to the court in respect of the original notice of civil claim – applied to stay in favor of arbitration. The core question was whether the amendments added new claims. The Court of Appeal affirmed the lower court’s refusal to refer the question first to arbitration, and the conclusion that the amendments were not new.

June 6, 2023June 20, 2023

Ontario – Competing “jurisdiction” clauses result in application for stay being dismissed – #743

In RH20 North America Inc. et al v. Bergmann et al, 2023 ONSC 2378, the moving defendants brought both a motion under Rule 21 striking out certain of the plaintiff’s claims as disclosing no reasonable cause of action, and an application for a stay for want of jurisdiction on the basis of arbitration clauses in their underlying contracts with the plaintiffs. They met with divided success. While granting relief on the Rule 21 motion, Justice Valente dismissed the stay application on a variety of grounds, including that there were competing arbitration and jurisdiction clauses and that there was an attornment to the court’s jurisdiction as a result of bringing the Rule 21 motion.

June 5, 2023June 5, 2023

Ontario – No hearing de novo in case of challenge to procedural fairness – #742

In All Communications Networks of Canada v. Planet Energy Corp., 2023 ONCA 319, the Court dismissed the appeal of a judgment upholding an arbitral award in favour of Respondent All Communications Networks of Canada (“ACN”) in the amount of $29,259,787 and made an order enforcing the award. In first instance, Planet Energy Corp. (“Planet”) sought to set aside the arbitral award based on the failure of due process, arguing: (1) that it was not given the opportunity to present its case; and (2) that the Arbitrator’s ruling violated public policy. Before the Court of Appeal, Appellant Planet raised the additional argument that the first instance judge failed to apply the right standard of review. Planet argued that a de novo hearing was required to examine properly the arguments raised against the arbitral award. The Court of Appeal dismissed Planet’s arguments and confirmed that a party seeking to set aside an arbitral award based on a failure of due process must prove that the Arbitrator’s conduct is serious enough to dismiss the application to enforce the award under the law of the enforcing State (here, Ontario). The Court of Appeal also confirmed that a party seeking to set aside an award based on a violation of public policy shall demonstrate that the award offends Ontario’s principles of justice and fairness in a fundamental way.

May 26, 2023June 20, 2023

B.C. –Issue estoppel may bind tribunal to prior arbitration award – #741

In Kingsgate Property Ltd. v Vancouver School District No. 39, 2023 BCSC 560, Justice Stephens granted leave to appeal from an arbitral award in a rent renewal dispute, in which the Arbitral Tribunal elected not to follow the interpretation of a key contractual provision from an arbitral award rendered decades earlier. In both rental renewal disputes, a key issue was a market value provision in a long-term lease of property. Justice Stephens found that the proper interpretation of a previous arbitral award and whether the Arbitral Tribunal properly applied the doctrine of issue estoppel raised questions of law. The leave grant decision will permit further court consideration of interesting and novel questions concerning the application of the doctrine of issue estoppel in an arbitration context.

May 25, 2023June 13, 2023

B.C. – Inadequate reasons on central issue a breach of natural justice – #740

In Bromley v. Getzie, 2023 BCSC 446 (“Bromley”), Justice Brongers remitted an arbitral award to the Arbitrator for reconsideration as a remedy for the arbitrator’s failure to observe the rules of natural justice, pursuant to s. 30 of the (former) British Columbia Arbitration Act, RSBC 1996, c. 55 (the “Act”). Justice Brongers found that the Arbitrator had breached principles of natural justice because he provided inadequate reasons on a “central issue” in dispute between the parties. This is a rare finding, but one which appears to rely, in part, on principles of natural justice as they relate to applications for judicial review in administrative proceedings. Regrettably, scant reasons are provided regarding the decision of Justice Brongers to order remittance of the matter to the arbitrator, rather than to set aside the award, as a remedy for the breach of natural justice.

May 24, 2023May 24, 2023

Ontario – Peace River “arguable case” standard applies to ICAA stay motion – #739

Husky Food Importers & Distributors Ltd v JH Whittaker & Sons Limited and Star Marketing Ltd, 2023 ONCA 260 addresses the standard of proof that a party seeking a stay of proceedings under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA”) must meet in order to establish the existence of an arbitration agreement that grounds the stay of proceedings. The Court of Appeal found that Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 supersedes the stay analysis articulated in Haas v. Gunasekaram, 2016 ONCA 744.

May 23, 2023May 26, 2023

Ontario – International award not enforced because of improper notice – #738

In Tianjin Dinghui Hongjun Equity Investment Partnership v. Du, 2023 ONSC 1808, Justice Kimmel refused to recognize and enforce a $120 million arbitral award in a Shenzhen Court of International Arbitration (“SCIA”) arbitration seated in Shenzhen, China against two individual respondents, Mr. and Mrs. Du, who were resident in both Canada and China. She found that the Dus had not been given proper notice of the arbitration within the meaning of Article 36(1)(a)(ii) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), being Schedule 2 to the International Commercial Arbitration Act, 2017, c. 2, Sched. 5. By extension, the Dus were also unable to present their case.

May 11, 2023May 8, 2023

Ontario – No appeal where parties agree dispute “finally settled” by arbitration – #737

In Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245, Baffinland Iron Mines LP (“BIM”) appealed a decision of Justice Laurence A. Pattillo dismissing its application for leave to appeal an arbitral award. Justice Pattillo had dismissed the application on the basis that the relevant arbitration agreements precluded appeals. BIM then sought to appeal that decision. Tower-EBC G.P./S.E.N.C (“TEBC”) moved to quash the appeal on the basis that there is no right to appeal from a denial of leave to appeal. The Court of Appeal dismissed the application to quash, holding that BIM’s appeal fell within a “narrow category of cases” that are an exception to the rule that there is no right to appeal from a denial of leave to appeal. Those are ones where it is alleged, as here, that the application judge mistakenly declined jurisdiction to consider the leave issues. The appeal itself, however, was also dismissed. The Court of Appeal found that the application judge’s interpretation of the arbitration agreements was correct. The Court concluded, among other things, that in the dispute resolution clause the phrase “finally settled” (used in relation to an arbitration) meant the same as the phrase “final and binding” (used in relation to decisions of a Dispute Arbitration Board, the “DAB”). Both resulted in there being no further recourse from the arbitral award by way of appeal.

May 10, 2023May 26, 2023

New Brunswick – When is an appeal not an appeal? – #736

In New Brunswick Highway Corporation v. MRDC Operations Corporation, 2023 NBCA 19, the Court of Appeal of New Brunswick (the “Court”) dismissed the appeal of a decision denying an appeal against an arbitral award. The Court found that the arbitration agreement did not grant the parties an automatic right of appeal, and denied leave to appeal pursuant to section 45 of the Arbitration Act, RSNB 2014, as no extricable questions of law were present. The Court cautioned against finding extricable errors of law in a case such as this involving contractual interpretation of the arbitration agreement. The decision turned on the interpretation of the arbitration agreement, which provided both for an appeal and for no appeal.

May 9, 2023May 5, 2023

B.C. – No error of law where some evidence supports findings of fact – #735

In 1550 Alberni Limited Partnership v. Northwest Community Enterprises Ltd., 2023 BCCA 141, the British Columbia Court of Appeal confirmed the decision of Justice Groves, who refused to grant leave to appeal from an arbitral award that turned largely on the Arbitrator’s interpretation of the parties’ agreement, as modified during the course of its performance. The Court found that the petitioner failed to establish that the proposed appeal raised an extricable question of law – because there was some evidence that supported the findings of fact. In so doing, the Court left the issue of the standard of review of the Arbitrator’s decision following the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, [2019] 4 S.C.R. 653 for another day.