In Welter v. Parrish & Heimbecker Ltd., 2026 SKCA 62, the Court dismissed an appeal from a decision recognizing and enforcing a default arbitration award under The Enforcement of Foreign Arbitral Awards Act SS 1996, c E-9. 12 (the “EFAA”). The appellant failed to participate in the arbitration despite notice and did not pay arbitration institution fees as required. The arbitration rules agreed to by the parties permitted the arbitral institution to issue a default judgment in such circumstances, even when a tribunal had not been constituted. The arbitration institution issued a default judgment. The appellant raised several arguments that the award failed to satisfy the statutory prerequisites for enforcement and had been issued through a procedurally unfair process. The Court concluded that the appellant had not demonstrated any reviewable error in the enforcement decision.
Background – The dispute arose after the appellant, Welter, failed to deliver canola to the respondent, Parrish & Heimbecker Ltd. (“P&H”), as required under a commodity contract. The contract contained an arbitration agreement governed by the Arbitration Rules of the National Grain and Feed Association’s (“NGFA”). Following the alleged breach of contract, P&H provided notice to Welter and commenced arbitration proceedings by filing a complaint with the NGFA.
Over the following months, the NGFA and Welter exchanged multiple communications. The NGFA requested that Welter execute its arbitration services agreement and pay a portion of the arbitration fees. Although Welter indicated that he would sign the agreement, he ultimately failed to do so.
Under the Rules, a party’s failure to execute NGFA’s arbitration services agreement or pay the required arbitration fees may result in the NGFA issuing a default award without receiving further submissions from that party. After numerous communications and warnings to Welter, NGFA ultimately exercised that authority and issued a default award. P&H subsequently applied to the Saskatchewan Court of King’s Bench to have the approximately US$85,000 award recognized and enforced.
Chambers decision – In Parrish & Heimbecker Ltd. v Welter, 2025 SKKB 18, the Chambers Judge set out the statutory framework and related case law for the recognition and enforcement of foreign commercial arbitration awards in Saskatchewan. The Chambers Judge considered and rejected Welter’s argument that recognition and enforcement of the award would be contrary to public policy, a doctrine with very narrow application.
Appeal decision – The Court considered and rejected several arguments advanced by the appellant, some of which overlapped and some which had not been raised before the Chambers Judge. The primary arguments were as follows: the award was procedurally unfair; the award was not valid; and the statutory prerequisites for recognition and enforcement were not met.
First, the Court denied that the award was entered in a procedurally unfair manner. The Court relied on several unchallenged factual findings made by the Chambers Judge including that: the parties had agreed to the Rules; Welter received notice of P&H’s arbitration complaint; Welter communicated with NGFA on numerous occasions over several months; Welter indicated that he would execute and return the arbitration services contract; and Welter was advised that failure to participate in the arbitration process could result in a default award being entered against him. The Court further noted that the Rules allowed Welter to apply to vacate the default award but that he failed to do so.
Second, and relatedly, the Court rejected the argument that the award was invalid:
“[20] [T]he Chambers judge found that the parties agreed on an arbitration process governed by the Rules, and the Rules provide that an award may be entered in default where a party refuses to engage in the NFGA arbitration process. Specifically, the Rules require parties to return an executed arbitration services contract within 15 days from receiving one from the NFGA secretary (Rule 2(D)). If a party fails to do so, or fails to pay the arbitration service fee, “the NFGA Secretary may without further submissions of the parties enter a default judgment” (Rule 2(E); see also Rule 10(A)). That is precisely what occurred here….
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[22] The Chambers judge… did not fail to consider any issues associated with notice or procedural fairness, as the Rules did not require a tribunal to be constituted before an award could be granted in these circumstances. In short, there was no deficiency in the evidence before the Chambers judge as to how the award was issued or its propriety under the Rules. It was clear on the record that the award was issued in default pursuant to the Rules because Mr. Welter failed to engage in a process he agreed to in his contract with P&H.”
Third, the Court found that P&H had met its burden of demonstrating that the procedural requirements for recognition and enforcement of the award had been satisfied:
“[34] The Chambers judge reviewed the relevant provisions of the EFAA (which adopts the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards [New York Convention]), as well as the UNCITRAL Model Law on International Commercial Arbitration [Model Law] (adopted by The International Commercial Arbitration Act, SS 1988-89, c I-10.2). As P&H points out, unless there was evidence proving one of the applicable exceptions under Article V of the New York Convention, the award was both recognizable and enforceable. I see nothing in the record that would make an Article V exception applicable here, given the evidence and the Chambers judge’s factual determinations….
[35] There is also no basis to conclude that the composition or authority of the arbitral tribunal, the arbitral procedure, or the form of the arbitral award were not in accordance with the agreement of the parties under Article V(1)(d) of the New York Convention. This is because, as noted, the Rules the parties had agreed upon expressly authorized entry of the default judgment by the NFGA secretary in the circumstances.”
Having failed to show any ground, including any exception under the New York Convention or the Model Law upon which the award should not be enforced, Welter’s appeal was dismissed.
A few brief comments are warranted.
First, P&H is a privately held Canadian company and Welter is a Saskatchewan canola producer. Why, then, is this an international arbitration decision? Neither the Chambers Judge nor the Court of Appeal addressed this point. However, the issue was considered in an earlier decision, in Parrish & Heimbecker Ltd. v. Bukurak, 2017 SKQB 322:
“[12] The arbitration proceeding giving rise to this arbitration award was an international commercial arbitration that arose out of a legal, contractual relationship which was commercial in nature as contemplated by Article 1 of the New York Convention. There is no question that the NGFA arbitral award was derived from a commercial relationship and originated out of a legal, contractual relationship which was between the two parties.
[13] The NGFA is headquartered in Arlington, Virginia. The international status of the NGFA satisfies the New York Convention requirement that the arbitral award originate in a state other than the state where the recognition is sought.”
Bukurak is notable for other reasons. Like the present case, it involved the breach of a crop delivery contract with P&H, a producer which corresponded with NGFA but failed to return an arbitration services contract, the issuance of a default award, and a successful enforcement application. See Saskatchewan – Court delivers no-fuss recognition of default foreign arbitral award – Arbitration Matters #48.
Third, and unsurprisingly, the terms of an arbitration agreement matter. An arbitration agreement that incorporates institutional arbitrational rules requires adherence to those rules. No exceptions.
In both Bukurak and the present case, the defendants failed to comply with the agreed arbitration rules. The result in each case was the same: the default award was recognized and enforced.
Fourth, the NGFA publishes some of its arbitral awards on its website: see Arbitration Decisions – NGFA. Not all awards are available, however, and the default award at issue in the present case does not appear to be publicly posted.
A spot check of several recent NGFA default awards reveals a pattern similar to that in this case. Following an arbitration complaint (to use NGFA’s terminology), the NGFA will typically send multiple notices and letters to a defendant over a period of several months. If no response is received, the NGFA sends a final warning in language that appears to be standardized:
“NGFA Arbitration Rules 2(D) and (E) provide for the entry of a default judgment when a party fails to execute the arbitration contract and pay the service fee within fifteen (15) days. Based upon the lack of any response from you thus far, we must anticipate that you do not intend to respond. This is our last attempt to elicit a response from you. A default judgment may be entered against you at any time, which the Plaintiff may enforce in a court of law.” [Emphasis in original].
Fifth, the warning language highlights a novel feature of the NGFA process. NGFA’s default arbitration award process is somewhat unorthodox and differs from what many practitioners would regard as the norm among institutional arbitration providers.
The problem of a respondent who fails to participate in an arbitration is a familiar one under the rules of institutions such as VanIAC, ADRIC, the ICC, and the AAA. Under those regimes, the arbitration would ordinarily proceed notwithstanding the respondent’s default, with an arbitral tribunal being constituted to receive evidence and submissions from the participating party before rendering an award. By contrast, under the NGFA Rules, the NGFA itself may issue a default judgment without first constituting an arbitral tribunal. A spot check of published decisions shows that it does so with regularity in commodity disputes in both Canada and the United States.
Two final housekeeping matters should be noted to avoid potential confusion. The Court of Appeal cited the superseded 1986 version of the EFAA in its reasons. However, the hyperlinks in the decision correctly direct readers to the current 1996 EFAA. The Court of Appeal also mistakenly referred to the National Feed and Grain Association (NFGA). As discussed above, and as correctly reflected in the Chambers decision, the correct name of the organization is the National Grain and Feed Association (NGFA).