In Terrace Community Forest LLP v Skeena Sawmills Ltd., 2021 BCSC 1522, Justice Milman dismissed an application brought by the petitioner, Terrace Community Forest LLP (TCF), for an order under s. 29(4) of the new British Columbia Arbitration Act, S.B.C 2020, c. 2, to set aside a subpoena requested by the respondent, Skeena, and issued by the arbitrator. The subpoena required TCF to produce documents in an ongoing arbitration under the Act. TCF was not a party to the arbitration, but was a third party and was alleged to have documents that were relevant to the arbitration. Justice Milman’s decision turned on the meaning of the word “or” in s. 29(4), which provides that a subpoena issued to a third party may be set aside on application by the person named in the subpoena to the arbitral tribunal “or” the Supreme Court. Justice Milman held that the word “or” in this context was to be read exclusively, rather than inclusively, because: (a) by its plain meaning, s. 29(4) contemplates an application by the third party in the first instance to either the arbitrator or the court, but not both, and the Legislature could not have intended that a third party could make sequential applications to set aside the same subpoena if dissatisfied with the first answer it received (b) there is no provision in the Act for the third party to bring an appeal or seek a review of an arbitrator’s decision under s. 29(4) and (c) s. 4 of the Act precludes any review of an arbitrator’s order by the court except as provided in the Act.
Continue reading “B.C. – Under new B.C. Act, third party may apply to arbitrator OR court to set aside subpoena issued by arbitrator – #524”B.C. – Scope/excess of authority when arbitrator considers variation of award made based upon incorrect facts – #523
In Marchetti v Lane, 2021 BCSC 1259, Justice Tucker dismissed an application brought by the respondent (Lane) to “change or set aside” an arbitral award under s. 19.18 of the Family Law Act, S.B.C. 2011, c. 25. The case has application to commercial arbitration awards and, indeed Justice Tucker looked to the set aside provisions of the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 (“ICAA”) to determine whether the award should be set aside on jurisdictional grounds. Lane argued, among other things, that the arbitrator had acted outside the scope of the submission to arbitration and outside her authority in varying an earlier “final” award. He argued that the arbitrator had previously declined to clarify or correct the initial award, so it was final and binding upon the parties and subject only to the statutory right of appeal. The parties had agreed to have all their issues in dispute resolved by arbitration and the award which was the subject of this application related merely to one issue. After considering s. 34 of the ICAA, Justice Tucker found that the first award had been based upon facts that turned out not to have been correct and was therefore incapable of being implemented. In varying that award, the arbitrator did not “purport to correct or clarify the award, but determined the application to vary brought before her while her jurisdiction over the matter remained extant under the terms of the submission to arbitration and the applicable statute”.
Continue reading “B.C. – Scope/excess of authority when arbitrator considers variation of award made based upon incorrect facts – #523”Ontario – Court application stayed; jurisdictional issues required analysis of contract’s factual matrix, should be decided by arbitrator – #522
In 743584 Ontario Inc. v. LAC Otelnuk Mining Ltd., 2021 ONSC 5255, Master Jolley stayed a court application in favour of arbitration. Applying the competence-competence principle and the general rule adopted by the Supreme Court of Canada in Dell Computer Corporation v. Union des consommateurs 2007 SCC 34, she held that the question of the arbitrator’s jurisdiction should be decided by the arbitrator, except if the challenge to jurisdiction is based solely on a pure question of law or a question of mixed fact and law that requires only a superficial consideration of the documentary evidence in the record. She stayed the application in favour of arbitration, because the jurisdictional issues raised were questions of mixed fact and law that could not be determined on superficial consideration of the evidence.
Continue reading “Ontario – Court application stayed; jurisdictional issues required analysis of contract’s factual matrix, should be decided by arbitrator – #522”B.C. – Court outlines reasoning process to be followed by arbitrator in interpreting agreement on re-hearing – #521
In Belmont Properties v. Swan, 2021 BCCA 265, the British Columbia Court of Appeal upheld a decision of the BC Supreme Court setting aside an arbitrator’s decision and remitting the dispute for a new hearing. In doing so, the Court of Appeal provided guidance as to the reasoning process to be followed by the arbitrator in interpreting the agreement at issue on the re-hearing.
Continue reading “B.C. – Court outlines reasoning process to be followed by arbitrator in interpreting agreement on re-hearing – #521”Ontario – Court refers part of dispute to arbitration despite concluding dividing the issues was “unreasonable” in the circumstances – #520
In Star Woodworking Ltd. v. Improve Inc., 2021 ONSC 4940, Justice F.L. Myers of the Ontario Superior Court of Justice concluded he was required to refer to arbitration parts of a multi-action litigation even though dividing the issues and parties was, in the Court’s view, unreasonable in the circumstances. In granting the stay, Justice Myers followed the Supreme Court of Canada’s holding in TELUS Communications Inc. v. Wellman, 2019 SCC 19 (Wellman) to the effect that unless a party establishes one of the bases for refusing a stay under subsection 7(2) of the Arbitration Act, 1991, the Court lacks discretion to refuse the partial stay motion under subsection 7(5). He stayed portions of two of the joined actions on certain issues as against one of the Defendants but allowed them to continue on the remaining issues as against the other Defendants.
Continue reading “Ontario – Court refers part of dispute to arbitration despite concluding dividing the issues was “unreasonable” in the circumstances – #520”Ontario – Party’s conduct in suing in foreign jurisdiction constituted “strong cause” why arbitration clause should not be enforced under ONCA Novatrax principles – #519
In CSI Toronto Car Systems Installations Ltd. v Pittasoft Co., Ltd., 2021 ONSC 5117, Justice Mohan D. Sharma dismissed a motion by Pittasoft for a stay of CSI’s Ontario action in favour of arbitration on the grounds that: (1) under Article 8(1) of the Model Law, the arbitration agreement was “null and void, inoperative or incapable of being performed” because Pittasoft was estopped by its own conduct from relying upon it and also that Pittasoft had brought its stay motion too late; and (2) these findings constituted “strong cause” why the arbitration clause should not be enforced in accordance with the principles articulated by the Ontario Court of Appeal in Novatrax International Inc. v Hagele Landtechnik GmbH, 2016 ONCA 771 , that apply “when a litigant seeks to displace a forum selection clause agreed upon in a commercial contract”.
Continue reading “Ontario – Party’s conduct in suing in foreign jurisdiction constituted “strong cause” why arbitration clause should not be enforced under ONCA Novatrax principles – #519”B.C. – Portion of arbitral award set aside; re-hearing to be conducted by different arbitrator – #518
In Spirit Bay Developments Limited Partnership v Scala Developments Consultants Ltd., 2021 BCSC 1415, Justice Davies set aside a portion of an arbitral award and ordered a re-hearing on the basis that the arbitrator had erred in his application of the law of unjust enrichment to a construction contract. However, he found that it was necessary to have a different arbitrator conduct the re-hearing because the arbitrator had made findings of credibility adverse to Petitioner (Spirit Bay) representatives and also made several determinations of credibility that were critical of Spirit Bay’s evidence as well as its motivation in advancing some arguments. The arbitrator had “harshly criticized” Spirit Bay’s conduct not only in relation to the disputes in issue, but also within the arbitration, referring to “accounting tactics or tricks” and “tricks by Spirit Bay [which] continued into the hearing”, and characterizing Spirit Bay’s position in respect of one issue as a “ruse or a fiction”.
Continue reading “B.C. – Portion of arbitral award set aside; re-hearing to be conducted by different arbitrator – #518”Québec – case referred to arbitration despite some parties and some claims possibly not covered by the arbitration agreement – #517
In Césario v Régnoux, 2021 QCCS 3009, Justice Johanne Mainville granted Defendants’ application to the Court to decline jurisdiction and refer the parties to arbitration (declinatory exception). Justice Mainville held that the record did not allow her to rule on the Court’s jurisdiction because of unanswered questions regarding the relationship between the parties and their conduct prior to executing the arbitration agreement. The arbitrator must therefore first rule on its own jurisdiction, even though Justice Mainville noted that some parties and some claims were possibly not covered by the arbitration agreement.
Continue reading “Québec – case referred to arbitration despite some parties and some claims possibly not covered by the arbitration agreement – #517”Alberta – Court finds that submissions of counsel and opinions and ruling of arbitrator in a quashed arbitration inadmissible – #516
In Flock Estate v. Flock, 2019 ABCA 194, the Alberta Court of Appeal (Mr. Justice Frans Slatter, Madam Justice Myra Bielby and Mr. Justice Thomas W. Wakeling) overturned the chambers justice’s decision to admit affidavit evidence referring to a related arbitration in respect of which the award was ultimately quashed and found to be a nullity. The Court found there was a distinction on the one hand between—the arbitrator’s opinion and ruling about what should happen in that case (which is not evidence of anything other than his personal opinion) and counsel’s submissions (which is not evidence but argument)—and on the other hand, actual evidence put before the arbitrator. The former held no probative value and was inadmissible. With respect to the latter, the Court held that the sworn testimony given by the parties during the arbitration ”might” be admissible, but that the related exhibits were presumptively inadmissible.
Continue reading “Alberta – Court finds that submissions of counsel and opinions and ruling of arbitrator in a quashed arbitration inadmissible – #516”Federal CA – Arbitrator/Adjudicator expressing “tentative views” in pre-adjudication mediation to foster settlement not indicative of bias – #515
In Fono v. Canada Mortgage and Housing Corporation, 2021 FCA 125, the Federal Court of Appeal heard a second-level appeal of a prothonotary’s decision to strike out parts of the appellant’s notice of application for judicial review and affidavit on the basis that they contained settlement privileged information, specifically, evaluative statements allegedly made by the labour adjudicator in a pre-hearing mediation, which the appellant argued demonstrated bias. The FCA found the Federal Court judge made no error in upholding the prothonotary’s decision, specifically noting that the impugned statements did not demonstrate bias merely because the labour adjudicator expressed tentative views on offers made and positions taken in the dispute with a view to fostering settlement.
Continue reading “Federal CA – Arbitrator/Adjudicator expressing “tentative views” in pre-adjudication mediation to foster settlement not indicative of bias – #515”