Arbitration Matters

March 29, 2022April 5, 2022

Alberta – Rights of appeal must be explicit in arbitration agreement – # 598

In Sheridan v Sheridan, 2022 ABQB 180, Justice Jerke dismissed the appeal of an arbitral award for which leave had not been sought. The appellant Husband argued that by providing in the parties’ arbitration clause that any award was “subject to the rights of appeal under s. 44” of the Alberta Arbitration Act, RSO 2000, c. A-43, he was entitled to appeal on all of the grounds set out in s. 44(1) – on a question of law, on a question of fact or on a question of mixed law and fact. However, Justice Jerke found that this language meant that the award was also subject to s. 44(2) of the Act, which provides that where the arbitration agreement does not provide that the parties may appeal an award on a question of law, leave is required. This means that the arbitration agreement must explicitly allow an appeal on the s. 44(1) specified grounds, or the parties may appeal only a question of law, with leave of the court. Because the parties’ arbitration agreement did not explicitly do so, the appeal was dismissed because the Husband had not sought leave.

March 28, 2022March 31, 2022

B.C. – Court recognizes/enforces Swiss award, rejecting public policy defence – #597

In Enrroxs Energy and Mining Group v Saddad, 2022 BCSC 285, Justice Crerar granted a petition to enforce a foreign arbitral award under the International Commercial Arbitration Act, RSBC 1996, c 233 (ICAA) and the Foreign Arbitral Awards Act, RSBC 1996, c 154 (FAAA). He rejected the respondent’s attempts to resist enforcement based on the public policy ground in subparagraph 36(1)(b)(ii) of the ICAA and art. V(2)(b) of the FAAA. Justice Crerar also rejected the respondent’s request to stay execution pending a valuation of certain assets that the petitioner had seized, which the responded complained could result in double recovery.

March 17, 2022May 4, 2022

Ontario – Standard of review: set aside for applicant’s “inability to present his case” – #596

In Nelson v The Government of the United Mexican States, 2022 ONSC 1193, Justice Penny dismissed Nelson’s application to set aside the award of a three-member tribunal constituted under Chapter 11 of the North American Free Trade Agreement (“NAFTA”). Nelson relied upon Article 34(2)(a)(ii) of the Model Law, which allows the court to set aside an award on the basis that the applicant was, “otherwise unable to present his case”. Justice Penny relied upon the Ontario Court of Appeal’s decision of Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, at para. 65, leave to appeal refused, 2018 CarswellOnt 17927 (S.C.C), which held that the standard of review for setting aside an award under Article 34(2)(a)(ii) is whether the tribunal’s conduct is “sufficiently serious to offend our most basic notions of morality and justice” and “that it cannot be condoned under the law of the enforcing State”.

March 16, 2022February 1, 2023

Québec – Delay in raising arbitration provision fatal to application to amend class – #595

In 9238-0831 Québec inc. v Télébec and Vidéotron senc, 2022 QCCS 183 Justice Lussier dismissed defendant Vidéotron’s request to modify the definition of the plaintiff group in a class action to exclude customers who had signed a contract containing an arbitration clause. Vidéotron changed the relevant contracts to add the arbitration clause after the plaintiff’s application to authorize institution of the class action but before that application was decided. However, its application to modify the plaintiff group was brought outside of 45 days from the originating application in the litigation, as required by article 622 of the Code of Civil Procedure, CQLR c C-25.01. Vidéotron had participated in the judicial process for years before bringing its application and offered no explanation for its delay.

March 15, 2022May 4, 2022

Saskatchewan – Judicial review available only when arbitration agreement provides – #594

In Ministry of Highways for the Province of Saskatchewan v. West-Can Seal Coating Inc. et al, 2022 SKQB 43, Justice Currie heard, and rejected, all grounds pursued by the applicant, Ministry of Highways (the “Ministry”), to set aside a decision arising from an arbitration conducted pursuant to the New West Partnership Trade Agreement (“NWPTA”), a trade agreement among the four western Canadian provinces. Justice Currie confirmed that, unless contracted for by the parties, there is no role for judicial review of an arbitration award. The options are appeal (if applicable) and set aside. Set aside applications are also limited to issues of procedural fairness, and not whether the decision is correct on its merits.

March 14, 2022May 4, 2022

Ontario – Court rejects cross-applications to appoint valuators as the arbitrator – #593

In MacBryce Holdings Inc. et al. v. Magnes Partnership et al, 2022 ONSC 321, Justice Gilmore of the Ontario Supreme Court of Justice refused competing applications by parties to appoint their respective proposed candidates as arbitrator. Each proposed arbitrator was also a qualified valuator, whose mandate was to determine the fair market value (“FMV”) of shares pursuant to a shareholders agreement. Justice Gilmore rejected the argument that the conduct of the arbitration was to be confined to a more truncated and informal process of reviewing existing valuation reports, which was the process as set out in the agreement. She found that the parties clearly agreed upon an arbitration, rather than a valuation, which invoked certain procedural protections. She ordered that the parties choose an arbitrator (who would be neither of their proposed candidates) and gave further directions on the conduct of the arbitration.

March 10, 2022May 4, 2022

Ontario – Start of limitation period determined by interpretation of stepped arbitration clause – #592

In Maisonneuve v Clark, 2022 ONCA 113, the Ontario Court of Appeal interpreted the language of an arbitration agreement to determine the applicable limitation period. It found that the application judge’s interpretation of that language was entitled to deference and that the palpable and overriding error standard of review applied. The application judge found that the following language in the arbitration clause made an attempt at informal resolution a pre-requisite to arbitration: “[i]f the parties are unable to resolve the Excluded Issue as between them, then the Excluded Issue shall be fully and finally referred to the Arbitrator for resolution”. The application judge found that the word “then” made the clause “both temporal and conditional”, after considering the wording of the arbitration clause and the factual matrix. The Court of Appeal found no palpable and overriding error and dismissed the appeal. Maisonneuve’s application to appoint an arbitrator was not time-barred; he had brought his application within two years of the date when he knew that a negotiated resolution was not possible.

March 3, 2022May 4, 2022

Ontario – No issue estoppel regarding arbitrator’s findings in later litigation – #591

In The 6^th Line Mofos Limited v Stewart, 2022 ONSC 520, Justice Healey dismissed a summary judgment motion brought by parties to court proceedings, who argued that issue estoppel applied to prevent the court from making findings that were inconsistent with those made in a previous arbitration. The plaintiffs, who were adverse in interest in the arbitration, sued a land appraiser whose report was central to their dispute and which the arbitrator found did not meet the requisite professional standards. The plaintiffs argued that this finding was sufficient to establish the negligence of the defendant appraiser and they sought in damages recovery of the costs they had incurred in relation to the arbitration. Justice Healey disagreed and found that two elements of issue estoppel could not be met: (1) the same question was not before both the court and the arbitrator; and (2) the defendant appraiser was a witness in the arbitration and was not a party or its privy.

March 2, 2022May 4, 2022

Québec – Merchants reselling tickets not bound by arbitration agreement – #590

In Abihsira v. Ticketmaster Canada, 2022 QCCS 164, Justice Gagnon granted authorization to institute a class action against Ticketmaster Canada (“Ticketmaster”) on behalf of consumers and non-consumers, despite an arbitration agreement between the parties. Relying on public order provisions that extend the benefits of the Consumer Protection Act, CQLR c P-40.1 (“CPA”) to merchants selling or re-selling tickets, he found that the jurisdiction of the Superior Court could not be ousted by the arbitration agreement.

March 1, 2022May 4, 2022

Alberta – Previous arbitral award did not create res judicata for regulator – #589

In TransAlta Corporation v Alberta (Utilities Commission), 2022 ABCA 37, TransAlta Corporation (“TransAlta”) argued on appeal that the Alberta Utilities Commission (“AUC”) erred in law when it refused TransAlta’s application to decide, as a preliminary matter, that certain issues were rendered res judicata by a previous arbitral award arising out of a dispute between TransAlta and a legislated entity called the “Balancing Pool”. The majority of the Court of Appeal dismissed the appeal as: (1) the AUC decision was an interlocutory ruling in an unfinished proceeding and the AUC may ultimately agree with the arbitral award; and (2) the AUC did not err when it refused to apply res judicata as a preliminary matter as it was making a decision in a different statutory context than the arbitral tribunal.