Domestic Archives - Page 14 of 27

January 6, 2023March 13, 2023

John’s 2022 Hot Topic: Summary judgment in arbitration – #699

My “hot topic” for 2022 is the Court of Appeal for Ontario’s confirmation that an arbitration can be determined by summary judgment. In Optiva Inc. v. Tbaytel, 2022 ONCA 646, the Court approved proceeding by summary judgment motion where such a motion is consistent with the parties’ arbitration agreement. While the case addressed four grounds of appeal, including whether the arbitrator’s ruling to proceed by summary judgment was a procedural order or a jurisdictional award, the central issue, and my “hot topic,” is whether the arbitrator’s partial award, which decided a summary judgment motion should be set aside. For a summary of the decision, see Case Note – No oral hearing required even if one party requests it #667.

January 4, 2023March 13, 2023

Marie-Claude’s 2022 Hot Topic: Binding non-signatories – A new trend arising in Québec? – #697

The last year has seen several judgments which bind third parties to arbitration, specifically in Québec. The basic principles remain unchanged: the rule is still that a contract has effect only between the contracting parties (sec. 1440 CCQ). However, there is a trend, which seemed clear starting in 2021 and continues into 2022, to bring non-signatories into arbitration in certain circumstances, as set out in Québec’s recent judgments. Many reasons explain these decisions: let’s explore why this new trend is arising in Québec.

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 20, 2022December 15, 2022

Ontario – BIA trustee cannot delegate claims determination to arbitrator – #695

In Re YG Limited Partnership, 2022 ONSC 6138, Justice Kimmel held that the Trustee appointed under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the “BIA“) could not delegate to an arbitrator its authority, pursuant to section 135 of the BIA, to determine and value claims against the debtor. That put the Trustee in the position of an adversary, rather than a decision maker. As such, she found that a continuation of an arbitration to determine damages was not a valid exercise of the Trustee’s authority. She refused to order the Sponsor, who had agreed to indemnify the Trustee for all administrative fees and expenses incurred in relation to the resolution of unresolved claims against the debtor, to fund the administrative fees and expenses connected with Phase 2 of the arbitration (damages) following Phase 1 (liability). The issue of the Phase 1 administrative fees was not before her.

December 16, 2022December 15, 2022

Ontario – Participation in litigation beyond pleadings waives arbitration agreement – #693

In Azam v Multani Custom Homes Ltd., 2022 ONSC 6536, Justice Chang denied the defendant’s application to stay litigation under section 7 of the Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) upon finding the defendant unduly delayed bringing the application for a stay, after having actively participated in many steps to advance the litigation over a 16-month period, with the effect that the defendant had abandoned its rights to rely upon the arbitration clause and it was therefore invalid.

December 15, 2022December 15, 2022

Ontario – Leave to appeal award application and appeal dismissed together – #692

In The Tire Pit Inc. v Augend 6285 Yonge Village Properties Ltd., 2022 ONSC 6763, Justice Vermette dismissed an application for leave to appeal an award and the appeal itself. The grounds of appeal did not raise questions of law which were subject to appeal pursuant to subsection 45(1) of the Arbitration Act, 1991, S.O. 1991, c. 17 (“Act”) and had no importance beyond the parties. In any event, if she was wrong, she found that they lacked merit.

December 5, 2022August 8, 2023

Alberta – Court of Appeal to clarify its jurisdiction in arbitration matters – #689

In Schafer v Schafer, 2022 ABCA 358, Justice Pentelchuk ordered further briefing on the court’s jurisdiction to hear an appeal from an order of the Alberta Court of King’s Bench refusing permission to appeal under section 44(2) of the Arbitration Act, RSA 2000, c A-43 (the “Arbitration Act”). Although the amounts in dispute were relatively small, the case engaged several foundational questions. The first involved the overlapping, and sometimes dissonant, statutory jurisdiction of the Court of Appeal in matters ancillary to arbitration. Second, Justice Pentelchuk saw merit in providing interpretive guidance to parties and counsel on the appeal rights which flow from the arbitration agreement signed by the parties, which was said to be “standard” in family law arbitration in Alberta. She accordingly granted permission to brief the issue of jurisdiction to a panel of the Court of Appeal, in order to provide clarity in situations where the Judicature Act, Rules of Court, and Arbitration Act intersect. Justice Pentelchuk also asked the parties to address whether the arbitration agreement was a standard form agreement (which could make its interpretation an issue of law rather than mixed law and fact), and apply to adduce fresh evidence on that question, if necessary.

December 2, 2022December 1, 2022

Ontario – Narrow basis for excess jurisdiction set aside challenges reaffirmed – #688

In Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, 2022 ONCA 769, the Ontario Court of Appeal overturned a Superior Court set aside decision and restored an arbitral award. The Court reiterated and underscored directives from Alectra Utilities Corporation v. Solar Power Network Inc., 19 ONCA 254: There is a narrow basis for set aside challenges to arbitral awards on the ground of alleged excess of jurisdiction. Review of the substance of the arbitral award is not authorized. The correctness or reasonableness of the arbitrator’s decision is irrelevant. Set aside is not an appeal.

December 1, 2022December 1, 2022

Supreme Court – Peace River v Petrowest Part 2: no conflict between arbitration, bankruptcy law – #687

In Peace River Hydro Partners v Petrowest, 2022 SCC 41, the central issue was whether a receiver/trustee in bankruptcy may disclaim the arbitration clause in a contract and sue in the courts when it seeks to enforce the debtor’s contractual rights against third parties. The case concerned the tension between the court’s supervisory power over all proceedings brought by a receiver/trustee under the Bankruptcy and Insolvency Act (BIA) RSC 1985, c. B-3, and party autonomy to contract out of the courts. Section 15 of the British Columbia (former) Arbitration Act, RSBC 1996 c. 55 required a stay of proceedings where a party to an arbitration agreement has commenced a court proceeding in respect of a matter to be submitted to arbitration, unless the arbitration agreement is “void, inoperative, or incapable of being performed”. The Supreme Court of Canada dismissed the stay application of the defendant sued by the receiver/trustee, but split 5-4 on the reasons. The majority found that the arbitration clauses at issue were “inoperative” because enforcing them would compromise the orderly and efficient resolution of the receivership. This authority arises from the statutory jurisdiction conferred on provincial superior courts under ss. 243(1) and 183(1) of the BIA. It found that this interpretation of the stay provision ensures that provincial arbitration legislation and federal bankruptcy legislation are not in conflict. The minority found that the specific language of the “template” Receivership Order authorized the Receiver/Trustee to disclaim the arbitration agreements, rendering them inoperative.

November 21, 2022November 22, 2022

Ontario – Defendant to stayed action may commence arbitration – #684

In Star Woodworking Ltd. v. Improve Inc., 2022 ONSC 5827, the defendant condominium corporation sought an order that the Court appoint an arbitrator to hear and resolve the plaintiffs’ claims against it. The plaintiffs had originally commenced actions in the Ontario Superior Court of Justice, and a number of claims were stayed as they were required to be brought in arbitration pursuant to the Condominium Act, 1998, SO 1998, c 19, and the Arbitration Act, 1991, SO 1991, c 17. Justice Myers rejected the plaintiffs’ argument that they could not be forced to be claimants in an arbitration if they did not wish to do so. Justice Myers held that the arbitration was properly commenced pursuant to section 23 of the Arbitration Act, 1991.