notes on new arbitration cases in Canada
By James Plotkin and Eric Morgan.
Our last Case Note reviewed the Ontario Court of Appeal’s Mundo decision. Here we consider the more recent decision of Peace River Hydro Partners v Petrowest, 2022 SCC 41 (“Petrowest”).
Continue reading “Eric/James 2022 Hot Topic: What is next for arbitration and insolvency? (Part 2) – #701”
Parties keep trying, but the threshold is still high for disqualifying an arbitrator. These cases in 2022 provide a sampling of the circumstances in which the threshold is met – and those in which it is not.
Continue reading “Lisa’s 2022 Hot Topic #2: Challenging the arbitrator – #700”
My “hot topic” for 2022 is the Court of Appeal for Ontario’s confirmation that an arbitration can be determined by summary judgment. In Optiva Inc. v. Tbaytel, 2022 ONCA 646, the Court approved proceeding by summary judgment motion where such a motion is consistent with the parties’ arbitration agreement. While the case addressed four grounds of appeal, including whether the arbitrator’s ruling to proceed by summary judgment was a procedural order or a jurisdictional award, the central issue, and my “hot topic,” is whether the arbitrator’s partial award, which decided a summary judgment motion should be set aside. For a summary of the decision, see Case Note – No oral hearing required even if one party requests it #667.
Continue reading “John’s 2022 Hot Topic: Summary judgment in arbitration – #699”
By Eric Morgan and James Plotkin.
This past year brought two important decisions about the interrelationship between arbitration and insolvency proceedings: the Supreme Court’s decision in Peace River Hydro Partners v Petrowest, 2022 SCC 41 (“Petrowest”) and the Ontario Court of Appeal’s decision in Mundo Media Ltd. (Re), 2022 ONCA 607 (“Mundo”). Both decisions, in different ways, concern the tension between judicial authority to supervise proceedings brought by a receiver or trustee under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (“BIA”) and parties’ autonomy to choose to have their disputes determined through arbitration. While the two Courts reached the same bottom-line conclusion – that the particular arbitration clauses were “inoperative” in the circumstances of an insolvency and thus not binding on receivers or trustees – the decisions leave unanswered questions about the ways that insolvency and arbitration continue to interact with each other.
Continue reading “Eric/James’s 2022 Hot Topic: What is next for arbitration and insolvency? (Part 1) – #698”
The last year has seen several judgments which bind third parties to arbitration, specifically in Québec. The basic principles remain unchanged: the rule is still that a contract has effect only between the contracting parties (sec. 1440 CCQ). However, there is a trend, which seemed clear starting in 2021 and continues into 2022, to bring non-signatories into arbitration in certain circumstances, as set out in Québec’s recent judgments. Many reasons explain these decisions: let’s explore why this new trend is arising in Québec.
Continue reading “Marie-Claude’s 2022 Hot Topic: Binding non-signatories – A new trend arising in Québec? – #697”
Although there is provision in most provincial domestic arbitration legislation and the Model Law for the resignation of the arbitrator, there is little guidance on when the arbitrator may do so and the potential consequences once that occurs. However, two cases released in 2022 are helpful in that they suggest: (1) potential limitations on the discretion of an arbitrator to resign, regardless of the rights contained in the legislation; and (2) how the parties many anticipate this issue and provide for it in their arbitration agreement if it is important, so as to minimize the inevitable disruption that arises when an arbitrator resigns.
Continue reading “Lisa’s 2022 Hot Topic #1: Arbitrator resignation – the when, how, and what next? – #696”
In Re YG Limited Partnership, 2022 ONSC 6138, Justice Kimmel held that the Trustee appointed under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the “BIA“) could not delegate to an arbitrator its authority, pursuant to section 135 of the BIA, to determine and value claims against the debtor. That put the Trustee in the position of an adversary, rather than a decision maker. As such, she found that a continuation of an arbitration to determine damages was not a valid exercise of the Trustee’s authority. She refused to order the Sponsor, who had agreed to indemnify the Trustee for all administrative fees and expenses incurred in relation to the resolution of unresolved claims against the debtor, to fund the administrative fees and expenses connected with Phase 2 of the arbitration (damages) following Phase 1 (liability). The issue of the Phase 1 administrative fees was not before her.
Continue reading “Ontario – BIA trustee cannot delegate claims determination to arbitrator – #695”
In Clayton v. Attorney General of Canada, 2022 ONSC 6583, Justice Akbarali rejected an attempt to set aside a damages award made by a three-member tribunal (the “Tribunal”) originally constituted under Chapter 11 of the North American Free Trade Agreement (“NAFTA”). The applicants argued that the Tribunal had exceeded its jurisdiction in respect of the legal standard to be applied, breached procedural fairness by refusing to admit certain expert evidence, and rendered an award that was contrary to public policy. Citing previous jurisprudence on the high thresholds to be met for each of these grounds to succeed – thresholds consistent with deference to arbitral tribunals, – Justice Akbarali found no errors had be committed. She dismissed the application.
Continue reading “Ontario – High threshold to set aside international award for damages not met – #694”
In Azam v Multani Custom Homes Ltd., 2022 ONSC 6536, Justice Chang denied the defendant’s application to stay litigation under section 7 of the Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) upon finding the defendant unduly delayed bringing the application for a stay, after having actively participated in many steps to advance the litigation over a 16-month period, with the effect that the defendant had abandoned its rights to rely upon the arbitration clause and it was therefore invalid.
Continue reading “Ontario – Participation in litigation beyond pleadings waives arbitration agreement – #693”
In The Tire Pit Inc. v Augend 6285 Yonge Village Properties Ltd., 2022 ONSC 6763, Justice Vermette dismissed an application for leave to appeal an award and the appeal itself. The grounds of appeal did not raise questions of law which were subject to appeal pursuant to subsection 45(1) of the Arbitration Act, 1991, S.O. 1991, c. 17 (“Act”) and had no importance beyond the parties. In any event, if she was wrong, she found that they lacked merit.
Continue reading “Ontario – Leave to appeal award application and appeal dismissed together – #692”