Arbitration Matters

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.

May 8, 2023May 8, 2023

Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734

In Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc. et al., 2023 ONSC 1827, Justice Steele set aside two international awards (on the merits and as to costs and interest) arising out of a franchise dispute on the basis of a reasonable apprehension of bias on the part of the Arbitrator for failure to disclose that during the arbitration he had been appointed by counsel for one of the parties to serve as sole arbitrator on another matter even though it did not involve a franchise dispute and was in a different industry.

April 27, 2023April 24, 2023

Ontario –Arbitrator erred by allowing surrounding circumstances to overwhelm written agreement – #733

In Burwell v. Wozniak, 2023 ONSC 1685, Justice Jensen of found that the Arbitrator erred in law by allowing a promise in an email to overwhelm the words of a subsequent formal trust agreement. The Court varied the Arbitrator’s decision about the formation of a trust, holding that the Arbitrator’s reliance on surrounding circumstances while downplaying the words of the subsequently formalized agreement, gave rise to an extricable error of law.

April 26, 2023April 24, 2023

Ontario – Challenge to award for procedural unfairness and insufficient reasons dismissed – #732

In Orion Travel Insurance Co. v. CMN Global Inc., 2023 ONSC 1527, Justice Morgan dismissed an application under sections 45 and 46(1) of Ontario’s Arbitration Act, 1991, SO 1991, c. 17 for leave to appeal and to set aside an arbitral award. Among other things, Justice Morgan rejected the applicant’s argument that it did was denied its “right to be heard” based on the record, finding that this right only affords a party the opportunity to make one’s case—not to re-make one’s case after shortcomings. He also found that the Arbitrator was at liberty to borrow language from the successful party’s written brief, finding that there was no evidence that the Arbitrator lacked independent thought in doing so. In totality, Justice Morgan found the Arbitrator’s reasons intelligible and concise, and that there were no grounds to set aside the award or to grant leave to appeal.

April 25, 2023April 21, 2023

B.C. – No power to stay arbitration under Model Law – #731

In Johnston v Octaform Inc., 2023 BCSC 311, Justice Giaschi refused to stay an arbitration, finding he had no authority to do so under the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 [ICAA]. In so doing, he distinguished case law in which courts exercised inherent jurisdiction to stay domestic arbitration proceedings in various circumstances.

April 24, 2023May 1, 2023

Alberta – Former arbitrator, now judge/facilitator in same matter not biased – #730

In Shannon v Shannon, 2023 ABCA 79, the Appellant appealed the final consent order of a judge of the Alberta Court of Queen’s Bench (as it then was), which was made after a Binding Judicial Dispute Resolution (“BJDR”) process under the Alberta Rules of Court, AR 124/2010 and AR 194/202. The parties signed a Resolution Agreement dated February 16, 2021, which disposed of all the issues in dispute and whose terms were incorporated into a consent order. Both parties had counsel during the BJDR process, but not on the appeal. The Appellant challenged the consent order on the bases that: (1) there was a reasonable apprehension of bias on the part of the judge who facilitated the BJDR process because she had previously acted as arbitrator in the same matter before she was appointed to the Bench; and (2) the Appellant was not competent to enter into the Resolution Agreement that led to the consent order, which should be set aside as null and void. The Court of Appeal dismissed the appeal because it found that the Appellant had consented to having the judge who had previously sat as arbitrator facilitate the BJDR process, but also that a reasonable apprehension of bias allegation could not be established – there is a high burden to show that a superior court judge would not disabuse her mind of anything learned on a prior occasion and there is also a strong presumption that a judge will act judicially.

April 13, 2023April 13, 2023

Ontario – Court affirms narrow jurisdiction to set aside an arbitral award – #729

In Canada Soccer Association Incorporated v. Association de Soccer de Brossard, 2023 ONSC 1367, Bell J. dismissed a motion to stay an arbitral award and granted a cross-motion to enforce the award. The case is a reminder that applications to set aside arbitral awards which merely quarrel with the merits of a decision, even when dressed up as procedural grievances, attract little judicial sympathy.