Québec – Arbitral award did not “apply” to court proceeding – #657

In Nour v Estephan, 2022 QCCS 2996, Justice Wery dismissed an action brought by the Plaintiff for damages for breach of an agreement with the Defendants, which set out the terms of his departure from their business acting as financial advisors. Confession: this is not an arbitration case, but don’t stop reading because there is an interesting little section on the precedential value in the Québec Superior Court of an arbitral award issued by a retired former justice of the Québec Court of Appeal, acting as arbitrator, in unrelated litigation brought in the courts.

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B.C. – Leave to appeal threshold not overcome by strategic drafting – #645

In MDG Contracting Services Inc. v. Mount Polley Mining Corporation, MDG sought leave to appeal an arbitral award on the basis of section 30 (errors of law) and to set aside the award on the basis of section 31 (failing to observe the rules of natural justice) of the former B.C. Arbitration Act, RSBC 1995, c 55. Justice McDonald dismissed MDG’s petition on the basis that it failed to meet the threshold requirement for granting leave in cases where there is a “clearly perceived and delineated” question of law, or, a rare extricable question of law. Rather, MDG’s arguments raised questions of mixed fact and law by submitting that despite the Arbitrator making a correct statement regarding the law, when properly applied, it should have resulted in a different outcome. The court also rejected MDG’s argument that the Arbitrator failed to observe the rules of natural justice when he failed to explain how he reached a “summary conclusion”, as the Award contained ample detail regarding the Arbitrator’s findings.

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British Columbia –  Effect of consent orders staying proceedings in favour of arbitration – #636

Williams v. Audible Inc., 2022 BCSC 834 (“Audible”) is the second of two decisions by Justice Horsman extending stays of proceedings in favour of arbitration under s. 15 of the former Arbitration Act, R.S.B.C. 1996, c. 55 in the context of class proceedings. The first, Williams v. Amazon.com Inc., 2020 BCSC 300 (the “Amazon Stay Decision”), concerned a separate class proceeding, brought by the same representative plaintiffs as in Audible, alleging similar causes of action, but against Amazon. That decision is under appeal. In this case, Justice Horsman granted the stay sought by Audible. Following the principles in Seidel v TELUS Communications Inc., 2011 SCC 15, the parties agreed to a consent stay of proceedings in favour of arbitration in respect of the plaintiff’s non-consumer protection legislation claims because of the arbitration clause in the relevant contracts. On this application, Justice Horsman found that, because the representative plaintiffs’ non-consumer claims were stayed by virtue of a consent order, there was no proceeding in which to advance the claims of the other possible class members, whose claims related to a period of time when Audible’s contracts did not contain arbitration clause. Therefore, she granted an extension of the stay of those proceedings to cover those claims too.

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Ontario – Arbitrator’s notes not a substitute for transcript – #627

In Aquanta Group Inc. v Lightbox Enterprises Ltd, 2022 ONSC 3036, Justice Morgan was asked to appoint an arbitrator when the parties could not agree. The Respondents opposed all arbitrator candidates on the Applicants’ list and requested the appointment of an arbitrator who was previously appointed by the parties in an earlier arbitration involving the same parties and the same agreements. The Respondents argued that this would facilitate costs and time savings by allowing the arbitrator to use his notes from the earlier arbitration because there was no transcript of that arbitration. The Applicants had challenged the award arising from the earlier arbitration and opposed the appointment of the same arbitrator on the basis of reasonable apprehension of bias. Justice Morgan rejected the Respondents’ request to appoint the same arbitrator and found that their proposal, among other things, violated the principle of deliberative secrecy. In the alternative, the Respondents agreed to the appointment of certain candidates on the Applicants’ list. Justice Morgan chose one of those, “resort[ing] to the entirely arbitrary approach of going in alphabetical order”.

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Ontario – Arbitrators can decide non-legal business disputes, but not in this case – #608

The case 1107051 Ontario Ltd. v. GG Kingspa Enterprises Limited Partnership, 2022 ONSC 1847 concerned the jurisdiction of an arbitrator to decide a business dispute that was not legal in nature. The Applicant, 1107051 Ontario Ltd. (“110”), applied to “set aside” a decision of an arbitrator to assume jurisdiction over a dispute about whether a major real estate development project at King Street West and Spadina Avenue in Toronto (the “Project”) should include a hotel component when the parties were deadlocked on the issue. Section 17(8) of the Ontario Arbitration Act allows a party to apply to the Court to “decide” a jurisdictional issue if, as here, an arbitrator decides it as a preliminary question, as opposed to with the merits. Justice McEwen granted the “set aside”. He agreed with the arbitrator that the dispute was of a business nature and not legal and, further, that parties could arbitrate such non-justiciable disputes if they clearly and specifically intended to do so. In this case, although the arbitration clause was described as broad, the dispute was beyond its scope because the dispute was required by the clause to arise “under this Agreement”. That meant the dispute had to be about more than just anything to do with the Project. It had to concern the rights and obligations of the parties under the Agreement. Although a hotel was contemplated as part of the Project, it was not a required component. Further, express authorization to determine a business issue would have been necessary.

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Ontario – Best practices: pre-appointment communications and application to appoint arbitrator – #607

In Magna International Inc. v Granite Real Estate Inc., 2022 ONSC 2200, Justice Myers granted the application of Magna, the tenant in a lease agreement, for an order appointing an arbitrator to fix the rent for a renewal term of the lease. The parties agreed that the tenant had validly renewed the lease, but could not agree on the rent for the renewal period. Respondent Granite, the landlord, opposed the appointment of the arbitrator for two reasons: (1) the evidence in support of the application was insufficient; and (2) the arbitration clause in the lease was invalid because it contained permissive, rather than mandatory, language and was too vague because it did not specify either the seat or the applicable rules of the arbitration. Justice Myers set out the preferred approach for both communicating with the proposed arbitrator in circumstances in which the parties are not cooperating and the kind of evidence that should be adduced on an application for a court order appointing the proposed arbitrator, using the analogy of the process for the court appointment of a receiver/trustee in bankruptcy. Also, he found that the issues relating to the validity of the arbitration clause were to be referred to the arbitrator under the competence-competence principle.

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