In Syndicate of co-owners of Quartier Urbain 3 v Habitations Bellagio Inc, 2022 BCCS 2445, the Applicant sought the homologation of an arbitral award dated October 28, 2021, which ordered the Respondent to carry out certain corrective work on the Applicant’s residential building. The parties disagreed upon the meaning of the award. Therefore, Justice Lussier stayed the homologation application for a short time to allow the parties to return to the Arbitrator to try to reach agreement on the meaning of the award. Because the Arbitrator was functus officio (presumably because the parties were too late to seek an interpretation of the award from the Arbitrator), she was not to participate in the meeting as arbitrator.
The parties engaged in an arbitration under the terms of the Québec Regulation respecting the guarantee plan RLRQ c B-1.1, r 8 for residential buildings, which resulted in an award dated October 28, 2021. It ordered the Respondent to carry out certain corrective work on a residential building owned by the Applicant in Terrebonne, Québec. For several months following the issuance of the award, the parties disagreed on the scope of the arbitration award and the nature of the work to be done. On March 16, 2022, counsel for the Applicant suggested that the parties approach the arbitrator to obtain clarification on the meaning of the award. He then contacted the Arbitrator, who said that she would hear the parties “in a private capacity”. As of April 8, 2022, counsel for the Respondent said that she was interested in the meeting.
However, by April 27, 2022, the parties still had not agreed on the nature of the work to be done and the Arbitrator had offered only July, 2022, dates for the meeting. The Applicant applied to have the award homologated. The Respondent sought a suspension of the application until it had obtained clarification, and gave an undertaking to have the corrective work carried out in accordance with the terms of the arbitration award once known.
Justice Lussier noted that the award was final, with no right of appeal, and ordered a temporary stay of proceedings, for about a month, because it was “appropriate for the parties to be able to clarify the scope of the decision in order to avoid the dispute in which they find themselves”. He relied upon Article 156 CCP, which allows the court to order a stay of proceedings:
“The court may suspend the proceedings for the time it determines if it is shown to it that the request is of a conservatory nature, that the case is likely to be settled amicably and that the efforts necessary to prepare the file for the investigation would therefore be useless or disproportionate in the circumstances and that he is also convinced of the seriousness of the steps. He can lift this suspension at the request of a party when he considers that the reasons which justified it no longer exist.”
Justice Lussier also noted that the Arbitrator was functus officio. He stated that the process during the stay must be supervised and ordered the parties to meet with the Arbitrator within two weeks and “try, with the help of [the Arbitrator], who will not act as arbitrator, to agree on the scope of work to be done” and the Respondent (which was no longer licenced to carry out the work) was required to identify a contractor to do the work, which was to provide an undertaking to do the work before a date to be agreed upon by the parties or, failing that, by the Court.
Editor’s Notes:
First, the homologation stay provision in Article 645 of the Québec Code of Civil Procedure could not be invoked because the parties had not asked the Arbitrator to interpret the award and were too late to do so:
“645. A party may apply to the court for the homologation of an arbitration award. As soon as it is homologated, the award acquires the force and effect of a judgment of the court.
The court seized of an application for the homologation of an arbitration award cannot review the merits of the dispute. It may stay its decision if the arbitrator has been asked to correct, supplement or interpret the award…”
Second, apparently there was no other recourse for the parties. The award was final and not subject to appeal and the parties were out of time to seek an interpretation of the award from the Arbitrator. Article 643 of the Québec Code of Civil Procedure provides a procedure for the clarification of a final award. Within 39 days after receiving the award, a party may ask the arbitrator for an interpretation of a specific passage of the award, in which case the interpretation forms an integral part of the award. Therefore, Justice Lussier was being asked to homologate an award in circumstances in which the parties could not agree upon the obligations it imposed upon the Respondent and could not get clarification from the Arbitrator. He did not reach any conclusion on the meaning of the award, or whether it was “vague”, and was not asked to do so. The Court has limited jurisdiction to refuse homologation. Article 646 of the Quebec Code of Civil Procedure states as follows:
“646. The court cannot refuse to homologate an arbitration award or a provisional or safeguard measure unless it is proved that
(1) one of the parties did not have the capacity to enter into the arbitration agreement;
(2) the arbitration agreement is invalid under the law chosen by the parties or, failing any indication in that regard, under Québec law;
(3) the procedure for the appointment of an arbitrator or the applicable arbitration procedure was not observed;
(4) the party against which the award or measure is invoked was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings, or it was for another reason impossible for that party to present its case; or
(5) the award pertains to a dispute not referred to in or covered by the arbitration agreement, or contains a conclusion on matters beyond the scope of the agreement, in which case only the irregular provision is not homologated if it can be dissociated from the rest….”
The Respondent apparently raised none of these enumerated grounds to oppose homologation of the award. Justice Lussier stated that, “the Court does not have to decide what to do with the award, but notes that there may be means of defense to homologation”.
Third, what if the parties had agreed to give the Arbitrator jurisdiction, in an arbitration agreement, to re-open the arbitration for the purpose of clarifying or interpreting her final award?