B.C. Archives - Page 3 of 17 - Arbitration Matters

February 28, 2024February 23, 2024

B.C. – Reasons for granting anti-suit injunction to prevent arbitration different than litigation – #818

In Axion Ventures Inc. v Bonner, 2024 BCSC 45 (“Axion”), the Court addressed a British Columbia application for anti-suit injunctions to prevent the respondents from proceeding with a Washington State lawsuit and an arbitration seated in Thailand. Axion is a skirmish in the ongoing war over the ownership and control of Axion Ventures Inc. and Axion Interactive (the two applicants in this case) and their assets and those of their subsidiary and related entities in other jurisdictions around the world. The applicants were both plaintiffs and defendants in litigation already underway in BC. For reasons described below the Court ultimately adjourned the anti-suit injunction applications. However, it recognized a distinction between anti-suit injunctions sought in respect of foreign court actions and those sought in respect of commercial arbitrations; namely, that the latter do not engage principles of comity. And of particular interest to BC counsel, the Court suggested there is no absolute rule in BC that an anti-suit can only be sought after a stay application is brought in the foreign proceeding.

January 31, 2024January 26, 2024

B.C. – Enforcing award may be easy; collection may not – #813

In Asia Growth v. Qiao, 2023 BCSC 2173, the claimant was successful in its international arbitration and obtained a damages award of more than $17 million. However, the path to recovery was not simple as the respondent quickly transferred his only asset in B.C., his house, to his daughter. To recover, the claimant not only had to bring enforcement proceedings but also an action to set aside the transfer as a fraudulent conveyance. The claimant got default judgment against the respondent, his daughter and his wife (the other co-owner). Yet, that was still not the end of the story for the claimant. It then had to try to engage in a sale process to sell the respondent’s interest in the property, only to be faced with an application to set aside the default judgment. In this decision, the B.C. court dismissed the application, ultimately clearing a path to recovery for the claimant. This exemplifies that even after the court issues an order enforcing the arbitral award, the path to recovery is not always simple.

January 29, 2024January 26, 2024

B.C. – “Lacuna” identified in B.C.’s domestic arbitration scheme? – #811

In Bollhorn v. Lakehouse Custom Homes Ltd., 2023 BCCA 444, One justice of the Court of Appeal for British Columbia referred an application for leave to appeal from the decision of an arbitrator to a full panel of that Court. The Court identified what it termed “a gap [in the legislative scheme] that may confound the general understanding of ‘where there is a right, there is a remedy’”. That gap arises from the apparent application of the Vancouver International Arbitration Centre [“VanIAC”] expedited arbitration rules to claims under $250,000, which preclude appeals unless the parties agree otherwise.

December 20, 2023December 18, 2023

B.C. – failure to answer fundamental question not an extricable error of law – #801

In Hudson’s Bay Company ULC v. Piret (18111 Blundell Road) Holdings Inc., 2023 BCCA 428, the Court held that the failure of an arbitrator to answer a fundamental question is a matter of interpretation of the arbitral award and does not give rise to an extricable error of law. It dismissed the application for leave to appeal. This decision seems to stand in contrast to other recent decisions coming out of the same court that have held a material misapprehension of evidence going to the core of an outcome of an arbitral award can amount to an extricable legal error.

October 1, 2023October 1, 2023

B.C. – Court articulates principles on fixing conditions in leave applications – #778

In Kingsgate Property Ltd. v The Board of Education of School District No. 39, 2023 BCSC 1266, the Court considered the text, context and purpose of s. 31(3) of the (former) Arbitration Act R.S.B.C. 1996 c. 55 (the “Arbitration Act”). (Comparable language appears in s. 59(5) of the current B.C. domestic Act.) That section allowed a court to attach such conditions to an order granting leave to appeal an arbitration award as it considers just. The Court determined that s. 31(3) empowered the Court to impose conditions on granting leave to appeal that will prevent miscarriages of justice. Here, the Court made two such orders sought by the petitioner Kingsgate Property Ltd. (the “Tenant”). Firstly, the Court settled the terms of security with respect to the Tenant’s appeal of an award made in a rent review arbitration (the “Award”). Secondly, the Court ordered a stay of the Award and a default notice the Board of Education of School District No. 39 School Board (the “Landlord ”) had issued for arrears of rent (the “Default Notice”).

October 1, 2023October 2, 2023

B.C. – Med-arb process was “fundamentally flawed” – #775

In Shaikh v Brar, 2023 BCSC 1285, the applicants (“Tenants”) complained about an unfair mediation-arbitration process and applied for judicial review and an order setting aside a decision of an arbitrator from the B.C. Residential Tenancies Branch (“RTB”). This case note focusses on the med-arb issues it raises, not the relevant statutory regime, the nature of the Arbitrator’s discretion under it, or the standard of review. The Court found that the med-arb process was “fundamentally flawed” and set aside the award because the RTB Arbitrator: (1) used decision-making powers in the mediation stage that should have been reserved for the arbitration stage; and (2) went beyond the scope of appropriate exhortation to settle in the med-arb context.

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.

September 12, 2023October 23, 2023

B.C. – Arbitration clause in contract of adhesion not unconscionable/against public policy – #772

In Williams v. Amazon.com Inc., 2023 BCCA 314 the Court upheld a partial stay of a proposed class action in favour of arbitration. It found that the Chambers Judge did not err when she concluded that an arbitration clause that formed part of a contract of adhesion was not unconscionable or against public policy. In doing so, the Court distinguished the case from the Supreme Court of Canada decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”) on the issue of the applicable standard of review. In Ledcor, the Supreme Court determined that correctness standard applies when reviewing the interpretation of standard form contracts. Here, the British Columbia Court of Appeal found that a deferential standard was applicable because of the highly contextual and fact specific analysis required for determining unconscionability/public policy issues. The fact that a contract of adhesion was involved did not change that conclusion. The Court also distinguished this case from the Supreme Court of Canada decision in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”), where the Supreme Court found an arbitration clause in a contract of adhesion invalid on the basis of unconscionability and, in concurring reasons, as against public policy. The Court distinguished Uber because of, among other things, the “profound” differences that it noted in the two cases between the arbitration clauses at issue and the vulnerability of the plaintiffs.

August 15, 2023August 14, 2023

B.C. – No unfairness for procedural irregularity, no jurisdiction to review facts – #763

In Anins v. Anins, 2022 BCCA 441 (leave to appeal refused 2023 CanLII 64855 (SCC)), the Court of Appeal for British Columbia upheld a lower court decision dismissing a petition to set aside a family arbitral award based on errors of law and procedural unfairness. The Court of Appeal agreed with the B.C. Supreme Court that the Arbitrator did not cause any unfairness in failing to make a procedural direction in writing, nor were his reasons insufficient for omitting reference to certain statutory provisions. The Court of Appeal also agreed that the appellant’s grounds for appeal on the merits raised pure questions of fact. These were not appealable under B.C.’s then-applicable domestic arbitration statute.

August 4, 2023August 1, 2023

British Columbia – Google wins stay of conspiracy claims; plaintiff refuses to arbitrate – #761

In Spark Event Rentals Ltd. v. Google LLC, 2023 BCSC 1115, the BC Supreme Court granted the Google Defendants a stay in favour of arbitration. The Court rejected Spark’s assertion that the applicable arbitration agreement prohibited it from commencing arbitration, and that the entire dispute with Google could not be resolved in arbitration. Spark had also sued affiliates of Apple in the action. Apple applied, unsuccessfully, to stay the action on the basis that it was so intertwined with the claims against Google that it would amount to an abuse of process for the BC litigation to proceed in parallel with an arbitration against Google on the same claims. However, Spark represented to the Court that if its claims against Google were stayed, it would not proceed with an arbitration; accordingly, the Court found that Apple’s stay application was moot. While the Court left the door open to Spark to arbitrate with Google, in effect the arbitration agreement appears to have provided a tactical shield for Google – for now. This may be a case to watch, as Canadian courts have not yet definitively ruled on the availability of joint and several damages from co-conspirators in private litigation under the Competition Act, RSC 1985, c C-3 4. Another unsettled question that may arise in due course is whether, in these circumstances, a party has a right of contribution and indemnity from a co-conspirator if it is ordered to pay more than its proportional share of damages.