Arbitrator Challenge Archives - Arbitration Matters

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.

May 8, 2023May 8, 2023

Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734

In Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc. et al., 2023 ONSC 1827, Justice Steele set aside two international awards (on the merits and as to costs and interest) arising out of a franchise dispute on the basis of a reasonable apprehension of bias on the part of the Arbitrator for failure to disclose that during the arbitration he had been appointed by counsel for one of the parties to serve as sole arbitrator on another matter even though it did not involve a franchise dispute and was in a different industry.

April 25, 2023April 21, 2023

B.C. – No power to stay arbitration under Model Law – #731

In Johnston v Octaform Inc., 2023 BCSC 311, Justice Giaschi refused to stay an arbitration, finding he had no authority to do so under the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 [ICAA]. In so doing, he distinguished case law in which courts exercised inherent jurisdiction to stay domestic arbitration proceedings in various circumstances.

January 9, 2023March 13, 2023

Lisa’s 2022 Hot Topic #2: Challenging the arbitrator – #700

Parties keep trying, but the threshold is still high for disqualifying an arbitrator. These cases in 2022 provide a sampling of the circumstances in which the threshold is met – and those in which it is not.

December 30, 2022March 13, 2023

Lisa’s 2022 Hot Topic #1: Arbitrator resignation – the when, how, and what next? – #696

Although there is provision in most provincial domestic arbitration legislation and the Model Law for the resignation of the arbitrator, there is little guidance on when the arbitrator may do so and the potential consequences once that occurs. However, two cases released in 2022 are helpful in that they suggest: (1) potential limitations on the discretion of an arbitrator to resign, regardless of the rights contained in the legislation; and (2) how the parties many anticipate this issue and provide for it in their arbitration agreement if it is important, so as to minimize the inevitable disruption that arises when an arbitrator resigns.

December 7, 2022December 5, 2022

Ontario – Arbitrator no jurisdiction to hear challenge for bias after partial final award – #691

In Aroma Franchise Company, Inc. v Aroma Espresso Bar Canada Inc., 2022 ONSC 6188, Justice Cavanagh dismissed the Respondents’ motion to stay or dismiss an application to set aside a final award on the merits on the ground of the reasonable apprehension of bias of the Arbitrator. The Respondents argued that the Applicant was required to bring its challenge to the Arbitrator first in accordance with Article 13 of the Model Law because the arbitration had not yet terminated; interest and costs had yet to be determined. However, Justice Cavanagh found that the Arbitrator was functus officio. Therefore, the application was properly before the Court.

August 2, 2022August 2, 2022

England – Court clarifies requirements for validly appointing arbitrators – #646

As our readers know, Canadian courts have been generating a wealth of jurisprudence on many international arbitration-related issues of late. However, there are still some lacunae in Canadian jurisprudence, which courts will often fill by referring to jurisprudence from other leading arbitral jurisdictions, including England and UNCITRAL Model Law on International Commercial Arbitration jurisdictions such as Australia, New Zealand and Singapore. Article 2A(1) of the Model Law explicitly provides for this: “In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.” Because of this, Arbitration Matters will occasionally report on interesting cases from other jurisdictions which could be applied in Canada if the issue were to present itself here. One such case made our radar this week, because it deals with an issue that is seldom fought about in Canada: whether an arbitrator was validly appointed. In ARI v. WXJ, [2022] EWHC 1543 (Comm), Justice Foxton of the English Commercial Court rejected the Claimant’s argument that the Respondent’s appointee was invalidly appointed, and that the arbitrator appointed by the Claimant should therefore decide the dispute as sole arbitrator.