Arbitrator Challenge Archives - Arbitration Matters

July 3, 2024July 5, 2024

Québec – Arbitrator Need Not Recuse Himself for “Conflict” Created by Party – #845

In Groupe Marsan inc. c. Centre Canadien d’Arbitrage Commercial (CCAC), 2024 QCCS 1838, the Court dismissed the application of Groupe Marsan (“Marsan”), which sought review of a decision by the Arbitrator, who refused to recuse himself (the “Arbitrator’s Decision”). Concurrent with the ongoing arbitrations, the Arbitrator was also acting as counsel in a parallel proceeding before the Court involving different parties, in which Marsan’s counsel in the arbitrations acted for the opposing party. According to Marsan, this situation raised a reasonable apprehension of bias and the Arbitrator’s refusal to recuse himself violated procedural fairness. The Court found that the Arbitrator rightly concluded that the situation of concurrent representation was created by Marsan’s counsel and that the Arbitrator’s Decision met the standard of procedural fairness.

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June 17, 2024June 17, 2024

Nunavut – No lawyer disqualification for near-client relationship in prior arbitration – #841

In The Government of Nunavut v. Stantec Architecture Ltd., 2024 NUCJ 11, the Court dismissed the application of Defendant Stantec Architecture Ltd. (“Stantec”) to disqualify the lawyers of the Plaintiff, Government of Nunavut (“Nunavut”), from acting in the litigation. The dispute arose from the construction of an arena (“Project”). Stantec, the architect for the Project, argued that the Nunavut’s lawyers were in a conflict of interest because of a confidential cooperation agreement in which Nunavut’s counsel had assisted Stantec in a previous arbitration in which Stantec and the construction company hired for the Project were parties. That construction company was not a party to this action. Stantec alleged a “near-client” relationship with Nunavut’s lawyers arising from this cooperation agreement which disqualified them from acting for Nunavut in this litigation. The Court dismissed the application because the cooperation agreement specifically excluded the creation of a solicitor-client relationship between Stantec and Nunavut’s lawyers and expressly reserved the parties’ rights and recourses against each other concerning the Project.

May 8, 2024May 10, 2024

B.C. – No arbitrator bias where prima facie merits and credibility determinations made – #833

In Johnston v. Octaform Inc., 2024 BCSC 537, the Court dismissed a petition to have an arbitrator removed from an ongoing arbitration on the basis of an alleged reasonable apprehension of bias. The circumstances relied on by the petitioners arose from the arbitrator’s issuance of a freezing order and other procedural directions, in a hard fought and contested arbitration. The fact that the freezing order required the arbitrator to make findings of credibility and preliminary merits determinations did not give rise to bias. Also, the trigger for the 15-day period to challenge an arbitrator for bias is not an “open and fluid concept”.

April 10, 2024April 5, 2024

Ontario – Abuse of process precludes re-litigating arbitrator bias allegation – #827

La Française IC 2 v. Wires, 2024 ONCA 171 involved an appeal from a judgment recognizing and enforcing an arbitration award obtained by the Respondent. The Appellant/Claimant in the arbitration, entered into a funding agreement. The arbitration arose when the Appellant/Claimant commenced proceedings seeking recovery of fees under the funding agreement. The central issue before the Court was whether the doctrine of abuse of process prevented the Appellant/Claimant from arguing on the application to enforce the judgment that the arbitrator was biased, when that issue had already been dismissed by the arbitral institution that heard and decided the challenge.

March 27, 2024April 1, 2024

Ontario – Affidavits of “reasonable and informed persons” inadmissible in bias challenge – #824

In The Law Society of British Columbia and Valerie Frances Hemminger, 2024 LSBC 7, a hearing panel of the Law Society of British Columbia Tribunal refused to admit twelve affidavits offered to support the Respondent’s allegation of a reasonable apprehension of bias on the part of the panel. The panel found the affidavits were inadmissible primarily because the “reasonable and informed person” part of the test for reasonable apprehension of bias is an objective legal fiction, not informed by a subjective person whose views may be assessed by evidence and then applied by a decision maker. Accordingly, the affidavits – which offered the opinions of self-professed “reasonable” people about the implications of procedural decisions at the heart of the Respondent’s challenge – were inadmissible.

January 3, 2024April 30, 2024

Lisa Reflects (2023): Aroma – the blockbuster case of 2023? – #804

Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc., 2023 ONSC 1827 was the case I think created the biggest “buzz” in 2023, likely because it was the only Canadian case (of which I am aware) that has addressed the gnarly issue of arbitrator disclosure obligations in circumstances in which the arbitrator has taken on multiple appointments at the same time, a situation in which the IBA Guidelines on Conflict of Interest in International Arbitration provides little, well, guidance. I reported on this decision in an earlier case note: Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734 – Arbitration Matters. Since then, the case has continued to generate interest and commentary, which has kept me thinking about it. The Ontario Court of Appeal heard the appeal on December 6, 2023.

September 13, 2023September 16, 2023

B.C. – “Neutral nationality principle” not limited to nationality in Court’s arbitral appointment – #773

In Fotmer v Tilray, 2023 BCSC 1323 , the Court held that in an international arbitration, an American company’s multiple connections to British Columbia (including a place of business) precluded court appointment of a Canadian arbitrator over the objection of the opposing party. After considering the neutral nationality principle, the Court found that although the respondent was incorporated in Delaware, its close and obvious connections to British Columbia could give rise to a perception of bias if a Canadian arbitrator were appointed. Such an appointment would risk undermining the integrity of the arbitral process.

August 18, 2023August 18, 2023

International – Deliberation-related documents need not be produced, despite strong dissent – #766

In CZT v CZU, 2023 SGHCI 11, the Singapore International Commercial Court refused to order the arbitral tribunal to disclose deliberation-related documents in the context of a set-aside application under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) despite the dissenting arbitrator’s statement that he had “lost any and all trust in the impartiality of [his] fellow arbitrators.” The applicant relied upon Article 34(2), alleging that the majority had breached the rules of natural justice, had exceeded the terms or scope of the submission to arbitration, that the arbitral procedure was not in accordance with the parties’ agreement, and that the award conflicted with Singapore public policy. For the reasons set out below, this case has relevance to Canadian international arbitration practice.

August 3, 2023August 1, 2023

Ontario – Title of proceedings may be amended in recognition and enforcement proceeding – #760

IC2 Fund v Wires, 2023 ONSC 3879 addresses: (1) whether it is appropriate for a party seeking to enforce an international arbitral award to correct the title of proceedings in an enforcement proceeding where both abbreviated and formal names were used interchangeably in the arbitration; (2) whether an applicant using an abbreviated name has standing; and (3) whether a party resisting enforcement can do so on the basis of an arbitrator’s alleged partiality after such allegations were addressed in the arbitration, which decision was not challenged. Here, the applicant (the respondent in the arbitration) brought an application to enforce an arbitral award (the “Award”) relating to its costs of the arbitration. In the title of proceedings in the notice of application, the applicant used an abbreviated corporate name. In the absence of confusion around the party’s identity, including because the respondent (the applicant in the arbitration) had used both the formal and abbreviated names, the court granted leave to amend the notice of application to reflect the full corporate name and resolved the standing issue on the same basis. The court also recognized the Award, rejecting the allegations of partiality of the arbitrator. The respondent had previously made allegations in the arbitration about the arbitrator’s lack of impartiality, which were rejected. The respondent did not challenge this decision.

July 19, 2023July 17, 2023

Québec – Arbitrator’s past professional relationship not a cause of partiality – #756

In Tourigny v Chabot, 2023 QCCS 1976 (“Tourigny”), the Court homologated an arbitral award for costs, thereby dismissing the Defendants’ challenge based on an application to recuse the arbitrator on grounds of partiality.