Arbitration Matters

November 7, 2022March 8, 2023

Québec – Fragmentation of shareholders dispute stayed pending appeal on jurisdiction – #678

In Istanboulian v Kalajian, 2022 QCCA 1259, Justice Cournoyer granted leave to appeal from a judgment of the Québec Superior Court, which had referred part of a claim to arbitration. He found that the judgment under appeal caused irremediable injury to the Applicants by possibly preventing them from being heard in the appropriate forum and that it was in the interest of justice to immediately get to the bottom of the jurisdictional issue.

November 3, 2022November 15, 2022

Québec – No clean hands, no security despite stay of homologation application – #677

In Specter Aviation v United Mining Supply, 2022 QCCS 3643, Justice Castonguay granted a stay of an application by the successful party in a foreign arbitration to homologate the award, but denied the applicants’ alternative request for security, pending the unsuccessful party’s annulment application to the Paris Court of Appeal. Despite recognizing that a court should be reluctant to interfere with a successful party’s enforcement efforts, Justice Castonguay found that the annulment application was, “neither futile nor frivolous” and that the successful party did not have clean hands and had resorted to a self-help remedy. He also ordered costs against the successful party.

October 26, 2022October 26, 2022

Alberta – Action brought to require payment ordered in award – #676

In Tomalik v Enthink Inc., 2022 ABCA 302, the Court dismissed an appeal of the decision of Justice Gill of the Alberta Court of King’s Bench, who ordered the Appellant companies to buy out the Respondents’ shares in the companies pursuant to a Unanimous Shareholders Agreement (“USA”) and a valuation done by the second of two valuators. The Respondents argued that the first valuation was too low and pursued arbitration, as result of which the arbitrator found the first valuation deficient and ordered a second valuation, which was even lower. The arbitrator ordered the Appellants to purchase the shares at the second valuation amount. When they refused to pay, the Respondents sued the Appellants for breach of contract and, in a separate action, the second valuator in negligence for failing to arrive at a fair valuation. The two actions were permitted to proceed; by accepting the valuation as binding upon them in the first action and challenging it in the second, the Respondents were not seeking “inconsistent and mutually exclusive rights”.

October 25, 2022April 5, 2023

Ontario – Domestic arbitration statutes can supplement industry-specific arbitration schemes – #675

In Neuhaus Management Ltd v. Huang, 2022 ONSC 5548, the Ontario Divisional Court (Firestone RSJ, Stewart, and Akhtar JJ.) examined how Ontario’s domestic arbitration statute can be incorporated into and be read together with an industry-specific statutory arbitration scheme, the Ontario New Home Warranties Plan Act, R.S.O.1990, c.O.31 (the “Ontario New Home Warranties Act”).

October 25, 2022October 25, 2022

Ontario – Limitations defence not a matter of arbitral jurisdiction – #674

In Cruickshank Construction Ltd. v The Corporation of the City of Kingston, 2022 ONSC 5704, Justice Myers allowed an application to appoint an arbitrator, providing his views on the method for that appointment. He also dismissed the Respondent’s cross-application for a declaration that the notice of arbitration was limitation-barred and that the Applicant had not complied with preconditions to arbitration in the parties’ agreement. Justice Myers held that there was no basis in the Ontario Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) to permit the court to grant the cross-application and the grounds raised were not matters of arbitral jurisdiction.

October 24, 2022January 10, 2023

Quebec – The broad powers of an arbitrator as “amiable composer” – #673

In Investissements immobiliers MB inc. c. SMP Direct inc., 2022 QCCS 3315, Justice Godbout affirmed the broad jurisdiction that an arbitrator has to grant remedies in oppression claims, especially when empowered as an ‘amiable composer’. An ‘amiable composer’ may make a binding decision based on equity (rather than law) and without procedural formalities. It is a role that has its roots in civil law (“amiable compositeur”).

October 20, 2022October 20, 2022

Ontario – Does an appeal of a costs award require leave? – #672

In Schickedanz v Wagema Holdings Ltd., 2022 ONSC 5315, Justice Ramsay dismissed the motion by Wagema Holdings Ltd (Respondent on appeal) to quash Appellant Schickedanz’s appeal of a costs award. Wagema argued that leave was required under s. 133(b) of the Ontario Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) and so the appeal was also out of time. Justice Ramsay was not persuaded that Wagema would prevail when the issue was determined by the appeal judge. First, the parties’ arbitration agreement contained a broad appeal process, without a leave requirement for costs appeals. Second, there is nothing in s. 45 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 that requires leave to appeal a costs award or imports the leave requirement set out in the general costs appeal provision in s. 113(b) of the CJA. Third, the parties could contract out of the appeal provisions in s. 45 of the Arbitration Act pursuant to s. 3. Imposing a leave requirement to appeal a costs award would amount to judicial interference with the parties’ right to contract, which was recognized by the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, 2019 SCC 19. Ultimately, it would be up to the judge hearing the appeal to decide whether leave was required and, if so, whether the appeal was out of time and whether the appeal had merit.

October 13, 2022October 17, 2022

Québec – Solidary liability allegation no bar to referral to arbitration for one defendant – #671

In Nantel v Gonzalez (not reported), Justice Buchholz stayed an action as against one defendant of a group and referred its dispute with the Plaintiffs to arbitration, even though the Plaintiffs alleged solidary (joint) liability as against all Defendants.

October 12, 2022October 13, 2022

B.C. – Leave to appeal granted on question of law of public importance – #670

In The Graham-Aecon Joint Venture v. Malcolm Drilling Company Inc., 2022 BCCA 319, the Applicants (The Graham-Aecon Joint Venture and related entities) sought leave to appeal an arbitral award where the underlying dispute turned on the proper interpretation of section 8(d) of the Limitation Act, S.B.C. 2012 c. 13. That provision states that a claim is “discovered” “on the first day on which the person “knew or reasonably ought to have known…that, having regard to the nature of the injury, loss or damages, a court proceeding would have been an appropriate means to see to remedy the injury or loss”. Based on his interpretation of section 8(d), the Arbitrator had found that the claim was not time-barred. On application for leave to appeal, even though the Arbitrator’s reasons were “careful and thorough” Justice Voith decided to exercise his discretion to grant leave. He found the question of the proper interpretation of section 8(d) met the requirements of the Arbitration Act, S.B.C. 2020, c.2 for leave as it was a question of law that ‘cannot be dismissed through a preliminary examination’ and was of public or general importance as it had received little previous judicial attention.

October 11, 2022October 7, 2022

Manitoba – Arbitration Agreement Invalid due to Unconscionability and no Consideration – #669

In Pokornik v. SkipTheDishes Restaurant Services Inc., 2022 MBKB 178, Justice Chartier considered the principles arising from Uber Technologies Inc. v. Heller, 2020 SCC 16 (CanLII) (“Uber”) in a contract of adhesion between a restaurant delivery corporation, SkipTheDishes, and one of its individual couriers. Justice Chartier found that there was no arbitration agreement; SkipTheDishes asserted that the courier was bound to a new agreement with an arbitration agreement that only became effective after she sued. Had he found otherwise, Justice Chartier would have found the agreement to be invalid due to unconscionability and a lack of consideration. These findings were despite efforts by SkipTheDishes to address some of the concerns that animated the Supreme Court of Canada’s decision in Uber.