notes on new arbitration cases in Canada
In 10060 Jasper Avenue Building Limited v Scotia Place Tower III Inc, 2023 ABKB 23, Justice Summers refused an application to stay a proceeding brought by the party who commenced it. He found that the applicant party did not have status to make the application under the relevant arbitration legislation.
Continue reading “Alberta – Claimants denied stay of own action in favour of arbitration – #716”
In IBI Group Architects (Canada) Inc. v Edmonton (City), 2022 CarswellAlta 1805, the applicants, IBI Group Architects (Canada) Inc. and a related party (“IBI”), applied to stay an arbitration commenced by the City of Edmonton in favour of court proceedings. Although there is no express power to stay arbitrations under the Alberta Arbitration Act, RSA 2000, c A-43(“the Act”), the application was brought under subsection 6(c) which provides “[n]o court may intervene in matters governed by this Act, except for the following purposes as provided by this Act…(c) to prevent manifestly unfair or unequal treatment of a party to an arbitration agreement”. Previously, the Alberta Court of Appeal held in New Era Nutrition Inc. v Balance Bar Company, 2004 ABCA 280 (“New Era”), that courts could use subsection 6(c) to provide a remedy to cure unfairness arising from matters not covered by the specific language of the Act and that it could be used to allow “a party, faced with both a statement of claim and a notice to arbitrate, to apply to stay the arbitration on the basis that the matters in the two proceedings overlap and cannot be reasonably separated” in order to avoid unfairness (para. 43). IBI argued, among other things, that it needed the full participation and evidence of non-parties to the arbitration clause to defend itself and so if it were forced to arbitrate it would be unable to meet the case against it, which was manifestly unfair and so the arbitration should be stayed. Justice Dunlop, delivering his decision from the bench, refused the application to stay the arbitration as he determined that he had no jurisdiction to do so under the Act. He concluded that New Era “was no longer good law” in Alberta as the case had been considered and expressly overruled by the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, 2019 SCC 19 (CanLII), [2019] 2 SCR 144 (“Telus v Wellman”).
Continue reading “Alberta – Power to prevent “manifestly unfair treatment” not power to stay arbitration – #706”
In Esfahani v Samimi, 2022 ABKB 795, the parties’ marriage broke down and they agreed that certain issues would be decided by way of arbitration and other matters by litigation. The Arbitrator issued an award, which Husband appealed and sought to set aside pursuant to s. 44(1) (appeals) of the Alberta Arbitration Act, RSA 2000, c A-43, but not s. 45 (set asides) of the Act. Ultimately, Justice Marion dismissed the appeal and declined to set aside the award, but varied and remitted certain issues back to the Arbitrator. This Case Note focusses on the following two issues:
Continue reading “Alberta – Alberta never bound by Sattva and Teal Cedar – #705”
In Schafer v Schafer, 2022 ABCA 358, Justice Pentelchuk ordered further briefing on the court’s jurisdiction to hear an appeal from an order of the Alberta Court of King’s Bench refusing permission to appeal under section 44(2) of the Arbitration Act, RSA 2000, c A-43 (the “Arbitration Act”). Although the amounts in dispute were relatively small, the case engaged several foundational questions. The first involved the overlapping, and sometimes dissonant, statutory jurisdiction of the Court of Appeal in matters ancillary to arbitration. Second, Justice Pentelchuk saw merit in providing interpretive guidance to parties and counsel on the appeal rights which flow from the arbitration agreement signed by the parties, which was said to be “standard” in family law arbitration in Alberta. She accordingly granted permission to brief the issue of jurisdiction to a panel of the Court of Appeal, in order to provide clarity in situations where the Judicature Act, Rules of Court, and Arbitration Act intersect. Justice Pentelchuk also asked the parties to address whether the arbitration agreement was a standard form agreement (which could make its interpretation an issue of law rather than mixed law and fact), and apply to adduce fresh evidence on that question, if necessary.
Continue reading “Alberta – Court of Appeal to clarify its jurisdiction in arbitration matters – #689”
In Angophora Holdings Limited v. Ovsyankin, 2022 ABKB 711, Justice Romaine dismissed an application by an arbitral award debtor to stay enforcement of the award issued in favour of a party indirectly owned and controlled by Russian bank Gazprombank JSC, which is an entity subject to Russian sanctions.
Continue reading “Alberta – Arbitral award enforced despite Russian sanctions – #685”
In Tomalik v Enthink Inc., 2022 ABCA 302, the Court dismissed an appeal of the decision of Justice Gill of the Alberta Court of King’s Bench, who ordered the Appellant companies to buy out the Respondents’ shares in the companies pursuant to a Unanimous Shareholders Agreement (“USA”) and a valuation done by the second of two valuators. The Respondents argued that the first valuation was too low and pursued arbitration, as result of which the arbitrator found the first valuation deficient and ordered a second valuation, which was even lower. The arbitrator ordered the Appellants to purchase the shares at the second valuation amount. When they refused to pay, the Respondents sued the Appellants for breach of contract and, in a separate action, the second valuator in negligence for failing to arrive at a fair valuation. The two actions were permitted to proceed; by accepting the valuation as binding upon them in the first action and challenging it in the second, the Respondents were not seeking “inconsistent and mutually exclusive rights”.
Continue reading “Alberta – Action brought to require payment ordered in award – #676”
In Agrium v Orbis Engineering Field Services, 2022 ABCA 266, the majority of a three-member panel of the Court of Appeal of Alberta (the “Court of Appeal”) dismissed an appeal to overturn a decision staying the action in favour of arbitration. The Appellant, Agrium, Inc. (“Agrium”), commenced an action against the Respondents, Orbis Engineering Field Services Ltd., Elliott Turbomachinery Canada Inc., and Elliott Company (together, the “Respondents”), in relation to a dispute arising out of the parties’ services contract that included a mandatory arbitration agreement. The Respondents defended the claim, including on the ground that the arbitration agreement barred the action pursuant to s 7 of Alberta’s Arbitration Act (the “Act”). The Respondents’ initial application to stay the action was dismissed by Master Prowse on the grounds of waiver and attornment. The Respondents then appealed to a Justice of Alberta’s Court of King’s Bench. Before Justice Dilts, Agrium relied upon s 7(6) of the Act, which states that “[t]here is no appeal from the court’s decision under this section”. Agrium argued that thisprohibited the appeal. Justice Dilts dismissed this argument and allowed the Respondents’ appeal on the grounds that: (1) an appeal was permitted notwithstanding s. 7(6); and (2) the Respondents’ conduct did not amount to a waiver of their right to arbitrate. The majority of the Court of Appeal upheld Justice Dilts’ decision based on a similar analysis. Of note, Justice Wakeling wrote a 44-page dissenting opinion, which includes 140 paragraphs and 152 footnotes, as compared with the 34- paragraph majority decision (!).
Continue reading “Alberta – Master’s stay decision appealable despite no appeal under Arbitration Act – #665”
In Ong v Fedoruk, 2022 ABQB 557, Justice Bourque confirmed that under subsection 17(9) of the Alberta Arbitration Act(“the Act“), the court reviews preliminary jurisdictional awards in domestic arbitrations for correctness on a de novo basis. In doing so, Ong aligned the standard of review and procedure in Alberta with the decision of the Ontario Divisional Court in The Russian Federation v. Luxtona Limited, 2021 ONSC 4604 (“Luxtona”), a case decided under the comparable provision of Ontario’s International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5 (“ICAA”), which implements the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). However, it diverged from Ace Bermuda Insurance Ltd. v Allianz Insurance Company of Canada, 2005 ABQB 975 (“Ace Bermuda”), an international case which applied a review standard of “reasonableness, deference & respect” under Alberta’s International Commercial Arbitration Act, RSA 2000, c I-5, which also implements the Model Law. That case as a precedent may now be in doubt, considering the trend in Canadian and other Model Law jurisdictions in favor of non-deferential review of preliminary jurisdictional decisions of arbitral tribunals.
Continue reading “Alberta – Court reviews preliminary jurisdictional award for correctness de novo – #663”
In Barrel Oil Corp v. Cenovus Energy Inc., 2022 ABQB 488, Justice M.H. Hollins granted a Respondent who successfully defended an application to stay an arbitration the Respondent had commenced, triple “tariff” costs, equating to just over 40% of the Respondent’s out of pocket costs. The Court rejected the Respondent’s plea of full indemnity costs, finding they were inappropriate in this case.
Continue reading “Alberta – Successful enforcement of right to arbitrate attracts triple “tariff” costs – #659″
In Benke v Loblaw Companies Limited, 2022 ABQB 461, Justice Feasby called for a “culture change” in the courts to “create an environment promoting timely and affordable access to the civil justice system” (quoting Justice Karakatsanis in Hyrniak v Mauldin, 2014 SCC 7 at para. 2) to avoid a “large-scale exodus” from the courts to arbitration. He took an expansive view of the court’s power to decide a case by summary trial as one way to move away from the conventional trial and solve the problem. He also commented on why we should not want all commercial disputes to be decided by arbitration.
Continue reading “Alberta – Why arbitration needs the courts – and vice versa – #650”