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”Ontario – Party can sue and not required to arbitrate where opposing party obviously will not participate – #514
In 1100 Walkers Line Inc. v Elliott Sports Medicine Clinic Inc., 2021 ONSC 5067, Justice E.M. Morgan considered a commercial lease containing a renewal provision, which stated that if the parties could not agree on the applicable market rent to be paid during the renewal term, that issue “shall be determined by arbitration”. When the Tenant terminated the lease, but did not give the required 6 months’ written notice and thereafter vacated the premises, the Landlord sued, asserting that the automatic renewal provision was triggered and rent during the renewal term was owing. The Tenant claimed that the renewal provision was ambiguous and unenforceable, in part, because the applicable market rent during the renewal term had never been agreed upon by the parties, nor determined by arbitration since neither party had commenced an arbitration. Justice Morgan found that the renewal provision was unambiguous and enforceable and that the mandatory arbitration clause did not require the Landlord to initiate an arbitration in which the Tenant would obviously not participate. Further, because only the Landlord adduced any evidence of the applicable market rent, the arbitrator would have fixed the rent at that rate. Therefore, Justice Morgan granted judgment in favour of the Landlord.
Continue reading “Ontario – Party can sue and not required to arbitrate where opposing party obviously will not participate – #514”Ontario – Court application under Model Law Art. 16(3) to “decide the matter” of the tribunal’s jurisdiction is a hearing de novo and not a “review” of the tribunal’s decision – #513
In Russian Federation v. Luxtona Limited, 2021 ONSC 4604, the Divisional Court heard an appeal by Russia of an interlocutory decision of Justice Penny of the Ontario Superior Court of Justice, Russia Federation v. Luxtona Limited, 2019 ONSC 7558. Justice Penny had declined to allow Russia to adduce fresh evidence on an application brought under Model Law Art. 16(3) to set aside an interim arbitral award finding that Russia had consented to arbitrate Luxtona’s claims and that the tribunal therefore had jurisdiction. The proposed fresh evidence related to the jurisdictional issue and had not been before the tribunal. The appeal turned on whether the application before Justice Penny was a “review” of the tribunal award on jurisdiction or a hearing de novo. The Divisional Court, in a decision written by Justice D.L. Corbett, held that Russia was entitled to adduce fresh evidence as of right because the application was a hearing de novo. The court relied upon two key decisions raised by the parties. Mexico v Cargill, 2011 ONCA 622 held that a set aside application brought in the Superior Court of Justice under Art. 34 of the Model Law is a “review” and not a hearing de novo, but in that case there was no challenge to the tribunal’s jurisdiction to hear and decide the dispute. Therefore, the Divisional Court was not bound by it. The English Supreme Court decision of Dallah v Pakistan, [2011] AC 763, held that the court’s role where one party took the position that it had not consented to the arbitration was “to reassess the issue [of jurisdiction] itself” and not to “review” the tribunal’s decision. The Divisional Court found that this approach is supported by the language in the Model Law and the weight of international authority and Art. 2A of the Model Law, which promotes the uniformity of the application of the Model Law internationally.
Continue reading “Ontario – Court application under Model Law Art. 16(3) to “decide the matter” of the tribunal’s jurisdiction is a hearing de novo and not a “review” of the tribunal’s decision – #513”B.C. – party not abandoning position made in written argument, despite counsel’s failure to object to arbitrator’s contrary understanding – #512
In Eisler v. Connor Clark & Lunn Financial Group Ltd., 2021 BCSC 1280, Justice N. Smith granted, in part, the petitioners’ application for leave to appeal an arbitral award arising out of a dispute with their former employer, CCL. During their employment, the petitioners were paid income from certain funds owned by CCL that had investments in a variety of companies. After the petitioners’ employment was terminated, CCL re-organized the funds and acquired new investments in the fund. It stopped paying income from the fund to the petitioners, as a result of which they commenced an arbitration. The arbitrator found for CCL and the petitioners sought leave to appeal the award. One of the issues before Justice Smith was whether the duty of good faith first recognized in Bhasin v. Hrynew, 2014 SCC 71 was before the arbitrator. The argument that CCL had breached the contractual duty of good faith, through an improper use of its discretion to re-organize the fund and terminate the petitioners’ income entitlement, was contained in the petitioners’ written argument. But when the arbitrator asserted during the arbitration that it was his understanding that the petitioners were not advancing this position, petitioners’ counsel failed to correct him. Nonetheless, Justice Smith found that the issue was properly before the arbitrator.
Continue reading “B.C. – party not abandoning position made in written argument, despite counsel’s failure to object to arbitrator’s contrary understanding – #512”