Arbitration Matters

July 21, 2022July 25, 2022

Ontario – Arbitration clause not consideration; provides only detriment to contracting party – #641

In Goberdhan v Knights of Columbus, 2022 ONSC 3788, Justice Harris dismissed the Defendant’s motion to stay the Plaintiff’s wrongful dismissal action in favour of arbitration. The parties signed three employment contracts over a period of 8 years; the last two each contained a mandatory arbitration clause. The Plaintiff argued that there was no consideration for the second and third contracts, so he was entitled to sue. The Defendant argued that the arbitration clause itself was consideration and that a stay should be ordered because it was “arguable” that the dispute fell within the terms of the arbitration agreement. Justice Harris rejected the Defendant’s argument. He found that the last two contracts lacked consideration because there was no benefit flowing to the Plaintiff; essentially, he gave up his right to sue, which was a detriment, and gave him nothing in return. Therefore, because the main contract failed for lack of consideration, so too did the arbitration clause.

July 20, 2022July 20, 2022

Québec – Winning party advantaged by recourse to arbitration – #640

In Fiducie Groupe Carmen Forino v Fermes v. Forino & Fils inc., 2022 QCCS 2215, Justice Gagnon granted an application to homologate a final award. He found that the Defendants were asking the court to exceed the narrow scope of intervention available in that context and refused to revisit the arbitrator’s determination on the merits, even where the award might be based upon “shaky” legal grounds.

July 19, 2022July 21, 2022

British Columbia: – Court partially stays class action related to videogame “loot boxes” – #639

In Petty v Niantic Inc., 2022 BCSC 1077, Justice Mayer stayed a proposed class action in favour of arbitration, except in respect of claims advanced under B.C.’s Business Practices and Consumer Protection Act [BPCPA]. He rejected the Representative Plaintiffs’ arguments that the arbitration agreements were null and void for unconscionability and/or violating B.C. public policy. He also applied the competence-competence principle, holding the arbitral tribunal should decide first as to its jurisdiction over claims based on the Competition Act where the parties’ contract provided for California law.

July 18, 2022July 18, 2022

Québec – Light touch to determining arbitration clause application (except to the non-signatory, maybe!) – #638

In Cannatechnologie inc. c. Matica Enterprises Inc., 2022 QCCA 758, the Québec Court of Appeal (Justices Bélanger, Rancourt and Moore) affirmed the principle that a court should limit itself to a prima facie assessment of whether or not a dispute comes within the scope of an arbitration clause. If it does, a court proceeding regarding the dispute should be stayed so that the arbitrator can rule on his or her own jurisdiction.

July 15, 2022July 14, 2022

Alberta – Preliminary “ruling” on jurisdiction not an “award” – #637

In Brazeau (County) v Drayton Valley (Town), 2022 ABQB 443 , Justice Davidson considered the timeliness of an application for judicial review of both an arbitrator’s preliminary ruling on jurisdiction and the final award. The issues raised on the application are relevant beyond the statutory tribunal regime under the Municipal Government Act, RSA 2000, c M-26 (the “MGA”) and have broader significance. Of most interest is: (1) Justice Davidson’s determination that the limitation period for a challenge to an award begins to run only once there has been compliance with the statutory formalities of an award, including the requirement that it be signed; and (2) Justice Davidson’s conclusion that an application for ”judicial review” of an arbitrator’s preliminary jurisdiction “ruling” must be made within 30 days after it is released, and cannot be challenged as part of a review of the final award, even if it is sent to the parties again as an attachment to the final award. It is not part of the final award.

July 5, 2022July 14, 2022

British Columbia – Effect of consent orders staying proceedings in favour of arbitration – #636

Williams v. Audible Inc., 2022 BCSC 834 (“Audible”) is the second of two decisions by Justice Horsman extending stays of proceedings in favour of arbitration under s. 15 of the former Arbitration Act, R.S.B.C. 1996, c. 55 in the context of class proceedings. The first, Williams v. Amazon.com Inc., 2020 BCSC 300 (the “Amazon Stay Decision”), concerned a separate class proceeding, brought by the same representative plaintiffs as in Audible, alleging similar causes of action, but against Amazon. That decision is under appeal. In this case, Justice Horsman granted the stay sought by Audible. Following the principles in Seidel v TELUS Communications Inc., 2011 SCC 15, the parties agreed to a consent stay of proceedings in favour of arbitration in respect of the plaintiff’s non-consumer protection legislation claims because of the arbitration clause in the relevant contracts. On this application, Justice Horsman found that, because the representative plaintiffs’ non-consumer claims were stayed by virtue of a consent order, there was no proceeding in which to advance the claims of the other possible class members, whose claims related to a period of time when Audible’s contracts did not contain arbitration clause. Therefore, she granted an extension of the stay of those proceedings to cover those claims too.

July 5, 2022July 5, 2022

Ontario – Motion to “compel” participation in arbitration dismissed, despite arbitration clause – #635

In Black & McDonald v. Eiffage Innovative Canada Inc., 2022 ONSC 1855, Justice Dow was faced with two motions: (1) the defendants’ motion to stay the Ontario action on the basis of forum non conveniens; and (2) the plaintiff’s motion to “compel” the defendants to participate in arbitration as a result of an arbitration clause contained in the relevant contract. Justice Dow granted the stay on the ground that British Columbia was the proper forum, but declined to “compel” the defendants to participate in arbitration. He found that whether the arbitrator had jurisdiction over the dispute was to be determined by the arbitrator at first instance and that any failure on the part of the defendants to participate in an arbitration would have consequences for them in that proceeding.

July 5, 2022July 5, 2022

Québec – Court prevents “improper attempt to circumvent” final ICC award – #634

In Eurobank Ergasias v. Bombardier inc., 2022 QCCA 802, a majority of the Québec Court of Appeal (Mainville and Baudouin, JJ.A.): (1) confirmed the homologation of an ICC Arbitral Tribunal Final Award (“Final Award”); (2) confirmed the trial judge’s decision that a Québec bank did not have to pay under a Letter of Counter-Guarantee that was called upon, the purpose of which was the evasion of the binding ICC arbitration process; and (3) overturned the trial judge’s decision to direct the Hellenic Ministry of National Defence (“HMOD”), a branch of the Greek government, to comply with the Final Award because HMOD was not an entity domiciled in Québec and homologation is for the purpose of rendering the Final Award legally binding in Québec, not in Greece.

July 5, 2022July 5, 2022

Alberta – No set aside for document disclosure complaints – #633

In ENMAX Energy Corporation v. TransAlta Generation Partnership et al, 2022 ABCA 206, the Alberta Court of Appeal (Paperny, Rowbotham, and Strekaf, JJA) upheld the chambers justice’s decision to refuse to set aside an arbitral award (the “Award”) under section 45(1)(f) of the Alberta Arbitration Act, RSA 2000, c A-43 (the “Act“). It agreed that the (“Tribunal”) document disclosure rulings of the arbitral tribunal (“Tribunal”) in relation to a narrow sub-issue did not prevent the Appellants from making their case, nor did it result in manifest unfairness. Among other things, the Court of Appeal found that the Tribunal did not foreclose the possibility of further document production, but that it was the Appellants who opted not to apply for the records whose absence they now complained about. The Court also held that, when viewed in context, the Tribunal relied on other evidence to reach its conclusion and the absence of the records sought by the Appellants did not preclude them from presenting their case.

June 30, 2022July 13, 2022

Ontario – “Vigorous” intervention and “difficult”, “incisive” questions by arbitrator not bias – #632

In Dufferin v Morrison Hershfield, 2022 ONSC 3485, Justice Woodley dismissed an application made pursuant to sections 13(6) and 15(1) of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17, for an order removing an arbitrator on the basis that, “circumstances exist which give rise to justifiable doubts about the Arbitrator’s independence and impartiality, which are alleged to give rise to a reasonable apprehension of bias”. Essentially, the allegations were that the arbitrator had “entered the fray” because of the many questions he asked the witnesses, pre-judged the issues, and become an advocate for the Respondent. Justice Woodley found that the arbitrator was interventionist, but that she could find no bias or a reasonable apprehension of bias; “instead, [she] found a deeply invested, engaged Arbitrator that worked tirelessly for the parties in furtherance of his mandate, which was to determine the truth of the issues before him”. The Applicants were not out of time to bring their application because the alleged conduct complained of was “cumulative”. In any event, it would be “nonsensical” to allow a partial arbitrator to continue, even if the Respondent had not objected in time.