Arbitration Matters

February 15, 2022May 4, 2022

B.C. – No breach of dispute resolution clause, no damages where party refused communication to resolve dispute – #584

In JM Bay Properties Inc. v Tung Cheng Yuen Buddhist Association, 2022 BCSC 81, Justice Walker found that a contract’s dispute resolution clause which provided that “parties shall make all reasonable efforts to resolve their dispute by amicable negotiations and agree to provide, without prejudice, frank, candid and timely disclosure of relevant facts, information and documents to facilitate these negotiations” was not breached in circumstances where a party decided not to engage in any further communication with the other party to resolve a dispute between them. Justice Walker noted that the party alleging breach did not raise its complaint about the dispute resolution clause at the time of the contract’s termination. Finally, he held that even if the party were in breach, the party alleging the breach failed to establish that it had suffered any damages.

February 11, 2022May 4, 2022

Alberta –No appeal of decision refusing leave to appeal arbitration award, despite s. 48 of Alberta Arbitration Act – #583

In 719491 Alberta Inc v Canada Life Assurance Company, 2021 ABCA 419, a three-member panel of the Court of Appeal of Alberta denied the applicant’s requests (i) for permission to appeal the chambers judge’s order refusing leave to appeal the arbitration award (the “Leave to Appeal Request”)and (ii) for permission to appeal the chambers judge’s dismissal of its application to set aside the award (the “Set Aside Request”). As a preliminary matter on the Leave to Appeal Request, the applicant asked the Court to reconsider its previous decision in Sherwin-Williams Company v. Walls Alive (Edmonton) Ltd., 2003 ABCA 191(“Sherwin-Williams”), which held that leave to appeal decisions are not appealable to the Court of Appeal under s. 48 of Alberta’s Arbitration Act, RSA 2000, c A-43 (the “Arbitration Act”). Section 48 provides, in relevant part, that an appeal from the decision of the Court of Queen’s Bench on an appeal of an award (s. 44) may be made to the Court of Appeal with leave. However, based on the case law on the test for leave to reconsider a previous decision, which includes whether the decision has some “obvious, demonstrable flaw,” the Court denied leave and ruled that it did not have jurisdiction to hear the Leave to Appeal Request. The Court similarly rejected the applicant’s Set Aside Request based on the finding that the chambers judge did not err in holding that the arbitrator did not exceed his jurisdiction.

February 9, 2022May 4, 2022

Québec – Statutory tribunal chair disqualified for bias for comments made in presence of witness during hearing break – #582

In Terrebonne Police Brotherhood Inc. v Truchon, 2022 QCCS 34, Justice Poulin granted, in part, the plaintiff union’s application for judicial review of a decision rendered by a three-person statutory tribunal. The tribunal had dismissed the union’s motion for an order disqualifying the entire tribunal based upon comments made by the chair, which were overheard by a witness and an observer during a break in the hearing. Justice Poulin set aside the tribunal’s ruling and found that those comments demonstrated both a lack of impartiality and a lack of open mind on the part of the chair, which warranted his disqualification. However, the other two members of the panel were not disqualified, even though they contributed to the unanimous decision dismissing the union’s motion. The chair’s comments could not be imputed to them.

February 3, 2022October 19, 2022

B.C. – Claims against non-party to arbitration agreement stayed with claims against parties – #581

In Goel v Dhaliwal, 2021 BCSC 2382, Justice MacDonald dismissed as premature a motion to lift a stay of court proceedings in favour of arbitration for the limited purpose of allowing the plaintiffs to file an amended Statement of Claim with respect to claims against a defendant who was not a party to the arbitration. The parties did not agree on whether these claims were new or not. The arbitration had not yet concluded and the proposed amendments appeared to raise issues that overlapped with those which were before the arbitrator. Justice MacDonald found that the extent of the overlap, if any, would be clearer after the arbitration was concluded. In addition, the plaintiffs had also brought an application for judicial review of a Partial Final Award issued by the arbitrator which had not yet been disposed of. Justice MacDonald found that it was not clear whether the plaintiffs would pursue the amendments if they were successful on the judicial review application.

February 2, 2022May 4, 2022

Ontario – It’s not cricket: Ontario court emphasizes arbitral awards must include reasons – #580

In Alberta Cricket Association v. Alberta Cricket Council, 2021 ONSC 8451, Justice Perell took the rare step of setting aside an arbitral award for failing to state the reasons on which it was based. Justice Perell found that the arbitrator of a sports-related dispute had failed to deliver adequate reasons and so he set aside the award and directed a new arbitration to be conducted before a different arbitrator.

February 1, 2022May 4, 2022

B.C. – Appeal court considering arbitrator’s alleged error of law where law changed post-award – #579

In Clemina Hydro Power Limited Partnership v British Columbia Hydro and Power Authority, 2022 BCSC 25, Justice Carol J. Ross denied the petitioners’ application for leave to appeal an arbitral award arising out of two energy purchase agreements. Justice Ross found the petitioners failed to identify an extricable legal error in the arbitrator’s contract interpretation exercise. She also held that, in any event, the petitioners’ appeal had been rendered moot. One issue Justice Ross addressed was what the appellate court should do with an alleged error of law where the law has changed between the initial decision and the appeal.

January 31, 2022May 4, 2022

Québec – Enforcement of foreign award against alter egos – #578

In CC/Devas (Mauritius) Ltd. v. Republic of India, 2022 QCCS 7, Justice Pinsonnault was seized with several questions with respect to two seizures before judgment by garnishment, which were authorized within the context of an application for recognition and enforcement of arbitral awards rendered outside of Québec. What makes this situation of interest is the fact that the seizures before judgment involved assets (money) owned by third parties who were not defendants to the arbitration or named in the awards for which recognition is sought (still pending). They are not implicated at all in the facts alleged in the dispute leading to these awards and they are not targeted in the awards either. Nonetheless, Justice Pinsonnault concluded that the allegations against these third-party corporations (fully owned by the respondent, Republic of India) were sufficient to cause him to confirm the seizure against one of them, although with a revised scope. The seizure against the other corporation was dismissed for other reasons related to the State Immunity Act. The application for recognition and enforcement of the awards remains pending.

January 27, 2022May 4, 2022

Québec – Arbitration 101: parallel proceedings, multiple arbitration clauses, competence-competence, arbitrability, separability, waiver – #577

In Specter Aviation v Laprade, 2021 QCCA 1811, the Court of Appeal faced circumstances in which both the court and an arbitral tribunal found that they had jurisdiction over the parties’ dispute. The applicant/appellant Specter and related corporation third-party/appellant United Mining Supply appealed the order of Justice Castonguay, who dismissed their request to stay the defendants’/respondents’ defence and counterclaim for lack of jurisdiction on the basis of an arbitration clause in one of the parties’ agreements. At about the same time, an arbitral tribunal ruled that it had jurisdiction over the parties’ dispute. Justice Sansfaçon, for the Court of Appeal, granted the appeal and stayed the counterclaim pending determination of the parties’ dispute by arbitration.

January 20, 2022May 4, 2022

Saskatchewan – Waiver of arbitration in joint venture agreement read strictly – #576

In Beauchamp v Beauchamp, 2021 SKCA 148, the Saskatchewan Court of Appeal dismissed an appeal from a case management judge’s decision, which provided for how farming operations would be conducted for the following year, on an interim basis, until a dispute involving a Joint Venture Agreement (“JVA”) governing those operations was finally resolved. The appellant alleged that the judge misinterpreted his waiver of the right to arbitrate contained in the JVA. This waiver was provided on three occasions, in his agreement to put matters to the case management judge for the sake of expediency and urgency and in two written briefs, each using slightly different language. In these, the appellant agreed: 1) the case management judge could “make an order providing for how this grain farm is [to be] operated for the 2021 to 2022 crop year”; 2) he “will waive his reliance on the arbitration clause if” the judge was distributing the farming equipment or dividing the farming operation on an interim basis, but would not waive these rights if the judge were to order the entirety of the farming operation be divided exclusively among the only the other parties in the dispute; and 3) he “will waive his reliance on the arbitration clause if the Court’s authority to distribute the equipment of New Age Farms on an interim basis is an issue to the extent necessary to effect the dividing of the farm operation.” The Court of Appeal found that because the case management judge did not order the farming operation be exclusively undertaken by the other parties, and directed on an interim basis only how farming operations were to proceed, the judge did not violate the terms of the waiver. Indeed the case management judge had expressly held that the jurisdiction issue raised by the appellant needed to be resolved before the underlying litigation could proceed.

January 19, 2022May 4, 2022

BC – Arbitrator’s decision set aside for lack of procedural fairness – #575

In Cyrenne v YWCA Metro Vancouver, 2021 BCSC 2406, Justice Baird of the British Columbia Supreme Court set aside a statutory arbitrator’s decision to grant an Order of Possession in a residential tenancies dispute under the Residential Tenancy Act, SBC 2002, c 78 (the “RTA”). He found that the hearing lacked procedural fairness because the arbitrator failed: (i) to judicially consider an adjournment request (dismissing it out of hand); and (ii) to give the tenant a reasonable opportunity to fully present her case (e.g. cutting her off in the middle of her submissions after a “time limit” had expired). Although the Arbitration Act, SBC 2020, c 2 does not apply to RTA disputes, it is illustrative of what procedural fairness dictates in relation to fair hearings.