Arbitrator Challenge Archives - Arbitration Matters

December 2, 2024November 29, 2024

Ontario – Court Grants Extraordinary Remedy of Removing Arbitrator for Undue Delay – #878

In Maharajh v Mathura, 2024 ONSC 5737 (“Maharajh”), the Court granted an application to remove an Arbitrator for undue delay. The Arbitrator went silent for four months without explanation and then consented to the Applicant’s request that she resign. The Court was required to rule on the issue when the Respondent refused to consent. The delay was “undue” because the Applicant was prejudiced by it. This undermined the arbitration agreement. The parties could not cooperate, so their dispute returned to court.

November 4, 2024November 8, 2024

Ontario – Common counsel insufficient for multiple arbitral appointments to raise bias – #872

In Dhaliwal v Richter International Ltd., 2024 ONSC 5103, the Court dismissed an application to remove an arbitrator for reasonable apprehension of bias. This was a multiple appointments case. The application arose from the non-disclosure of a concurrent mandate, in which counsel for the Respondents also was counsel in another arbitration before the same arbitrator. The Applicants’ challenge for bias was not brought in a timely manner, as required by s. 13(3) of the Arbitration Act, 1991, SO 1991, c 17. In any event, overlapping counsel alone was not a sufficient ground for claiming bias, and no contextual circumstances necessitated disclosure of the concurrent mandate. Also, the arbitrator’s rejection of the Applicants’ evidence of what had been disclosed about the concurrent mandate did not give rise to actual bias.

August 30, 2024August 30, 2024

Québec – Multiple arbitrator challenges res judicata and abuse of process – #859

In B Smart Technology Inc. v Norstan Communications Inc., 2024 QCCS 2416 (“B Smart”), the Court considered an application by Norstan Communications Inc. (“Norstan”) to dismiss originating applications of B Smart, in which B Smart sought an order to replace the arbitrator who was appointed to resolve their dispute. B Smart alleged that the arbitrator was biased and that his appointment was improper. What was important to the Court’s analysis was that B Smart had brought an earlier application before the Court to challenge this same arbitrator’s appointment. That judge held that the arbitrator was impartial and that his appointment was proper. Given those findings, the Court found that res judicata applied as a full answer to B Smart’s allegations and the application was dismissed. The Court also found that B Smart’s multiple attempts to challenge the arbitrator were an abuse of process.

July 3, 2024August 28, 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.

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.