In O’Melveny & Myers LLP v. Tilt Holdings Inc., 2021 BCSC 124, Madam Justice Amy D. Francis applied the doctrine of forum non conveniens to stay B.C. litigation in favour of California litigation and, in doing so, recorded gaps in a law firm’s engagement letter. The B.C. litigation involved disputed invoices totalling $3.2 million USD for significant M&A work undertaken by the law firm but without renegotiating an initial engagement letter (i) signed with only one (1) of four (4) corporations which merged into the eventual client and (ii) limited to a threatened litigation file. The engagement letter contained an agreement to arbitrate which an arbitrator held did not apply to the merged client. The evolution of the law firm’s relationship with the merged client suggests moments at which law firms and clients ought to revisit, reframe and extend initial engagement letters in order to carry forward the benefit of any initial agreement to arbitrate.
Continue reading “B.C. – forum non conveniens required to address omission to extend agreement to arbitrate to merged corporation – #432”B.C. – three-part test for stay under 1996 Arbitration Act still applies under 2020 Arbitration Act – #425
In Wilson v. Infracon Construction Inc., 2020 BCSC 2074, Madam Justice Lindsay L. Lyster held that the three-part test for a stay developed under B.C.’s former Arbitration Act, RSBC 1996, c 55 continues to apply under the new Arbitration Act, SBC 2020, c 2. To resist a stay of his wrongful dismissal action, Plaintiff argued that the agreement to arbitrate included in the employment contract was void due to conflict between B.C.’s Arbitration Act, RSBC 1996, c 55 and its Employment Standards Act, RSBC 1996, c 113. Lyster J. disagreed, following A-Teck Appraisals Ltd. v. Constandinou, 2020 BCSC 135 whose reasoning was on “all fours with the present matter”. In doing so, Lyster J. dismissed all four (4) of Plaintiff’s reasons to resist its application: the court had considered binding authorities and statutes; despite being “isolated and relatively recent”, the reasoning remained persuasive; promoting consistency with similar legislation did not justify disregarding the B.C. decision in first instance in favour of an Ontario appellate decision; and, Plaintiff failed to meet the “exceptionally high” standard to demonstrate that the decision was “palpably wrong”.
Continue reading “B.C. – three-part test for stay under 1996 Arbitration Act still applies under 2020 Arbitration Act – #425”Supreme Court – for those SCC justices willing to consider it, Vavilov applies to private commercial arbitration where legislation provides for appeal – #420
Canada’s Supreme Court in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 offered to clarify a contracting party’s duty to exercise in good faith a discretion granted to it by contract and recognized in Bhasin v. Hrynew, 2014 SCC 71. In dismissing the appeal from Greater Vancouver Sewerage and Drainage District v. Wastech Services Ltd., 2019 BCCA 66, the Supreme Court upheld a decision in first instance to set aside a private, commercial arbitration award. The appeal presented an opportunity for the Supreme Court to consider the effect, if any, of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 on the standard of review principles applicable to appeals of commercial arbitration awards set out in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 and Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32.
Regarding that opportunity, six justices preferred to “leave [it] to another day” while the other three chose to embrace it, considering that to “leave this undecided is to invite conflict and confusion”. The six reasoned that they did not have the benefit of submissions on that question or the assistance of reasons on point from the courts below and that, in any event, the appeal’s outcome did not depend on identifying whether the proper standard of review was correctness or reasonableness.
Three justices acknowledged “important differences between commercial arbitration and administrative decision‑making” but declared that such differences do not affect the standard of review where legislation provides for a right of appeal. Drawing on Vavilov which explained that “a legislative choice to enact a statutory right of appeal signals an intention to ascribe an appellate role to reviewing courts”, the three held that Vavilov had “displaced” the reasoning in Sattva and Teal Cedar. “Concluding otherwise would undermine the coherence of Vavilov and the principles expressed therein”. The three limited the scope of their determination. “Our conclusion on this point is limited to the specific statutory provision at issue. In every case, the question is one of legislative intention, as reflected in the language of the statute”.
Independent of the above, the six justices also expressly agreed with B.C.’s Attorney General that, when granting leave to appeal, courts should “simply and precisely” state questions of law upon which they grant leave in order to prosecute appeals efficiently. The six observed that the “complicated formulation of the first question of law” made it difficult for the courts below to provide a direct and effective answer.
Continue reading “Supreme Court – for those SCC justices willing to consider it, Vavilov applies to private commercial arbitration where legislation provides for appeal – #420”B.C. – T’s responses to F’s mediation efforts justify delayed oppression remedy petition, qualify as component of oppressive conduct – #418
In Gierc Jr. v. Wescon Cedar Products Ltd., 2021 BCSC 23, Madam Justice Catherine Murray determined that Petitioner’s “reasonable efforts to mediate and settle the matter” served two (2) purposes: to rebut Respondents’ allegations of Petitioner’s undue delay to apply for oppression remedy under the Business Corporations Act, SBC 2002, c 57 and to qualify Respondents’ own conduct as oppressive.
Continue reading “B.C. – T’s responses to F’s mediation efforts justify delayed oppression remedy petition, qualify as component of oppressive conduct – #418”B.C. – court adjourns its assistance to issue subpoenas approved in international commercial arbitration – #416
Despite having “no difficulty accepting” the arbitrator’s conclusion that non-party witnesses had testimony “relevant to the issues in the Arbitration and material to its outcome”, Mr. Justice Gordon C. Weatherill in Octaform Inc. v Leung, 2021 BCSC 73 opted to adjourn an arbitral party’s applications to issue subpoenas in assistance of an arbitration conducted under the International Commercial Arbitration Act, RSBC 1996, c 233. Weatherill J. did affirm that arbitrations are “autonomous, self-contained, self-sufficient processes”, did acknowledge that “[i]t is the task of the Arbitrator to determine the truth” and did note that the arbitrator had not varied his initial approval of the subpoenas request after having participated in fourteen (14) days of hearing. Nonetheless, Weatherill J. considered the applications “premature”. He commented on whether one witness had been duly contacted and recorded that the other witness had set conditions on potentially attending. The witnesses did have over three (3) months between service of the October 9, 2020 applications and the January 14, 2021 hearing at which the witnesses were represented and could have addressed any concerns about willingness to participate. Weatherill J. still opted to see whether either witness in the future “unreasonably refuses to provide written evidence in chief and attend the hearing of the Arbitration for viva voce examination in chief, cross-examination and re-examination”. At that future time he advised “I will consider issuing the requested subpoenas”.
Continue reading “B.C. – court adjourns its assistance to issue subpoenas approved in international commercial arbitration – #416”B.C. – commercial dispute “foundationally different” from investor-state claim – #409
In lululemon athletica canada inc. v. Industrial Color Productions Inc., 2021 BCSC 15, Mr. Justice Gordon S. Funt determined that a standard of reasonableness applied to the court’s review of jurisdictional challenges in consensual arbitration. He distinguished Mexico v. Cargill, Incorporated, 2011 ONCA 622, stating that “[a] dispute involving two commercial parties over the termination of a private contract is, without more, foundationally different than a claim for damages against a country under NAFTA engaging international multilateral trade agreement or treaty interpretation principles”. Also, Funt J. dismissed the requirement for a more express or “paint by numbers” treatment of a party’s jurisdictional argument, stating that “the parties’ expectations as to the completeness of the arbitrator’s reasons is less than those of parties engaged in commercial litigation before a judge”.
Continue reading “B.C. – commercial dispute “foundationally different” from investor-state claim – #409″B.C. – errors interpreting and applying the law eligible for appeal on questions of law but not for set aside – #407
In Spirit Bay Developments v. Scala Developments, 2020 BCSC 1839, Mr. Justice Robert Johnston granted leave to appeal for three (3) questions of law which he determined had arguable merit but dismissed the application to set aside the award. A pair of questions involved misinterpretation and application of applicable case precedents and a third arose from the “arguably defective” pleading made by the party resisting appeal of the award. Refusing to set aside the award on the basis of legal error, Johnston J. noted that the alleged error of law would be determined on appeal. “Additionally, the parties clothed the arbitrator with the power to decide their dispute, and that includes the power to be wrong in interpreting and applying the law”.
Continue reading “B.C. – errors interpreting and applying the law eligible for appeal on questions of law but not for set aside – #407”B.C. – doctrine of separability allows receiver to disclaim agreement to arbitrate while litigating main contract – #399
In Petrowest Corporation v. Peace River Hydro Partners, 2020 BCCA 339, B.C.’s Court of Appeal identified the particular status and powers of a court-appointed receiver exercising its jurisdiction under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 and set out the doctrine of separability applicable to agreements to arbitrate. Their combined application supported the Court’s conclusion that a court-appointed receiver can sue on a contract and also disclaim application of the agreement to arbitrate contained in that contract. The Court held that doing so did not allow the receiver to “pick and choose” terms in a contract but instead merely recognized that the receiver had the option to pursue or disclaim two (2) separate contracts.
Continue reading “B.C. – doctrine of separability allows receiver to disclaim agreement to arbitrate while litigating main contract – #399”B.C. – court qualifies parties’ agreement to require only summary reasons as “penny-wise and pound-foolish” – #381
In Nolin v. Ramirez, 2020 BCCA 274, B.C.’s Court of Appeal set aside part of an arbitration award which rested on the arbitrator’s dismissal of a party’s evidence as suspicious in one context and reliance on it in another. The handling of the evidence was so inconsistent that the Court found it “impossible to understand how the arbitrator came to his conclusion” on the related issues and the arbitrator provided no justification in the summary reasons agreed to by the parties. Without more explanation in the brief reasons and unable to reconcile the findings and conclusions, the Court set aside that portion of the award related to the handling of that evidence.
Continue reading “B.C. – court qualifies parties’ agreement to require only summary reasons as “penny-wise and pound-foolish” – #381”B.C. – award’s short-form reference to party insufficient to refuse recognition and enforcement – #380
Despite ambiguity in the award’s use of a “short-form reference” to refer to the winning party, B.C.’s Court of Appeal in Macdonald Realty Ltd. v. Metro Edge Holdings Ltd., 2020 BCCA 272 declined to refer the parties back to the arbitration panel to clarify the name as doing so would be an “unnecessary expense to the parties and would not change the result”. The Court held that, despite the variation in the legal name, the award and decision in first instance validly identified the winning party. The Court also readily dismissed post-award challenges, in first instance and on appeal, limited to contesting the facts in dispute. The court reminded challengers that such an approach is misdirected given that an application to recognize and enforce an award is not a hearing on merits of the arbitrated dispute.
Continue reading “B.C. – award’s short-form reference to party insufficient to refuse recognition and enforcement – #380”