Domestic Archives - Arbitration Matters

July 22, 2024July 25, 2024

B.C. – Insufficiency of Reasons Breached Due Process – #848

In Sound Contracting Ltd. v Campbell River (City), 2024 BCSC 933, the court allowed the set- aside challenge of an arbitral award and remitted the matter to the arbitrator on the basis that the arbitrator had failed in his duty under natural justice to provide adequate reasons. The arbitrator concluded that the arbitration was time-barred but did not explain why he had reached that conclusion. In so doing, the court treated the set-aside challenge as akin to an appeal, where insufficient reasons amount to an error of law. In so doing, the court applied principles in the civil (appeal) and administrative (judicial review) contexts to the set aside of an arbitral award. This stands in contrast to how this issue has been treated internationally, where the matter of whether insufficiency of reasons is a breach of procedural fairness is not well-settled.

July 5, 2024July 2, 2024

B.C. – Danger of Bifurcated Proceedings – #846

In G & T Martini Holdings Ltd. v. Desert Properties Inc., 2024 BCSC 828, the Court dismissed a petition under s. 58(1)(c) of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to set aside an arbitral award after a bifurcated arbitration. The Petitioner claimed that the Arbitrator had changed the rationale of the earlier liability award and was precluded from calculating damages in the manner it did at the damages stage after the Arbitrator’s earlier award on liability. The Court found that the Arbitrator did not improperly change his decision on liability in the damages award, but instead merely elucidated upon his rationale for the decision he made in the liability award.

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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July 2, 2024July 2, 2024

Alberta – Arbitrator not functus for issuing consent award after party denied settlement – #844

In Caroll v Caroll, 2024 ABKB 227, the Court found that the Arbitrator was not functus officio for issuing a Consent Award after a settlement was reached in a med-arb process. One party denied the settlement but argued that, in any event, the Arbitrator’s jurisdiction was over after the settlement agreement and it was improper to “crystallize” the agreement into the Award. The Court dismissed this argument and found that there was a settlement. And the process was not unfair. The Arbitrator did not “conflate” the mediation and arbitration phases of the proceeding by terminating the proceeding after the settlement agreement rather than proceeding to arbitration once one party denied the settlement.

June 21, 2024June 21, 2024

B.C. – Court strictly enforces arbitration rules to foreclose leave to appeal award – #843

In Bollhorn v Lakehouse Custom Homes Ltd., 2024 BCCA 192, the Court dismissed an application by the Appellant/Plaintiff Robert Bollhorn for leave to appeal an award of an arbitrator. This outcome resulted from the Court’s application of Rule 27 of the Vancouver International Arbitration Centre (“VanIAC”) Domestic Arbitration Rules (the “Rules”) and Section 59(3) of the Arbitration Act, SBC 2020, c 2. The former operates to foreclose appeals where the award is issued under the Expedited Procedures of the Rules, which the Court found applied to the case. The latter provides that there can be no appeal on a question of law where the arbitration agreement – in this case the parties’ adoption of the Rules – expressly disallows it.

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.

June 7, 2024June 7, 2024

Ontario – Court dismisses action for issue estoppel based on prior arbitration – #840

In Ford v. GMP Securities LP, 2024 ONSC 271, the Court partially dismissed an action for issue estoppel, relying on a 2022 arbitral award that had been rendered as a result of a dispute between a group of shareholders (of which the plaintiff was a part) and an entity that the defendants (investment dealer and senior investment banker) had represented in a reverse take-over process. The defendants were found to be privies of the parties to the previous arbitration, even though they were not parties themselves. The only claims remaining in the Ontario action were the ones that had not been raised or decided in the previous arbitration.

June 3, 2024May 30, 2024

B.C. – BCCA goes deep and wide on partial stays – #838

Davidson v. Lyra Growth Partners Inc., 2024 BCCA 133 concerns whether there is jurisdiction under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to grant a partial stay of court proceedings concerning only those matters arguably agreed to be arbitrated by the parties or whether a court is required to stay the entire action. The Court confirmed that partial stays are available under the Arbitration Act where the court action raises some non-arbitrable matters despite there being no express language permitting non-arbitrable matters to proceed in Court – unlike other provincial legislation. It set out factors that should be considered by a court of first instance in determining whether to grant a partial stay or a complete stay. It also emphasized, however, that a stay of those matters arguably agreed to be arbitrated is mandatory if the requirements of s. 7 are met. In this case it had been argued that a stay could be refused as the “essential nature” or “pith and substance” of the court proceedings related to matters not covered by the arbitration agreement. The Court confirmed that there is no “residual” jurisdiction to deny a stay on that basis. This decision aligns with the Supreme Court of Canada’s guidance in TELUS Communications Inc. v Wellman, 2019 SCC 19 (“Wellman”) concerning the mandatory nature of stays of court proceedings that relate to any matter arguably reserved for arbitration.

May 21, 2024May 28, 2024

Ontario – Parties share responsibility to keep arbitration moving – #835

In Bank-Strox Renovation Inc. v. Lugano View Limited, (“Bank-Strox”) the Court dismissed the defendant’s motion to dismiss a construction lien action for delay where the had parties agreed to have their dispute resolved by arbitration. As a reminder of the sharp distinction between litigation and arbitration, the Court held that a respondent in an arbitration has the same, or in some circumstances a greater, contractual obligation to keep the arbitration moving as the claimant. Simply sitting back and doing nothing is not a basis to later seek dismissal of the claim for delay. That might work in a court case but it won’t where the parties have agreed to move their dispute to arbitration.

May 6, 2024May 3, 2024

Ontario – Award unreasonable where tribunal failed to follow binding law on frustration – #832

In Taseko Mines Limited v. Franco-Nevada Corporation, 2023 ONSC 2055, the Ontario Superior Court of Justice (Commercial List) granted an appeal from an arbitral award due to, among other things, the arbitrator’s failure to apply binding precedent on frustration of contract. Although the Court applied a deferential reasonableness standard, it concluded the arbitrator’s departure from binding jurisprudence rendered the award unreasonable.