Institutional Archives - Arbitration Matters

April 10, 2024April 5, 2024

Ontario – Abuse of process precludes re-litigating arbitrator bias allegation – #827

La Française IC 2 v. Wires, 2024 ONCA 171 involved an appeal from a judgment recognizing and enforcing an arbitration award obtained by the Respondent. The Appellant/Claimant in the arbitration, entered into a funding agreement. The arbitration arose when the Appellant/Claimant commenced proceedings seeking recovery of fees under the funding agreement. The central issue before the Court was whether the doctrine of abuse of process prevented the Appellant/Claimant from arguing on the application to enforce the judgment that the arbitrator was biased, when that issue had already been dismissed by the arbitral institution that heard and decided the challenge.

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.

August 30, 2023September 5, 2023

Québec – Arbitrator wrong to extend arbitration agreement to include third-party employees – #769

The Superior Court of Québec in Mullen c. Nakisa inc., 2023 QCCS 2678 held that employees not party to an arbitration agreement should not be added as parties to an ongoing arbitration. There is no support for the proposition that all third parties that are in some way related to the signatory parties of an arbitration agreement should be bound by it. This decision on the merits follows the stay granted by the Superior Court in October 2021 (Mullen c. Nakisa inc., 2021 QCCS 4388), covered in Case Note Québec – Stay of arbitrator’s decision to add third parties, force them to meet timetable, and refusal to hear them without payment – #553.

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.

August 1, 2023August 1, 2023

Ontario – Courts will also enforce agreements in favour of court proceedings – #758

In Eurofins Experchem Laboratories, Inc. v BevCanna Operating Corp., 2023 ONSC 4015, the Court dismissed an application by Defendant BevCanna Operating Corp (“BevCanna”) for a permanent stay of the action or alternatively, a permanent stay of any claims caught by the arbitration clause in the agreement between BevCanna and the Plaintiff, Eurofins Experchem Laboratories, Inc. (“Eurofins”). The Court found that Eurofins’s claim sought recovery of unpaid fees under the parties’ contract, even though it also included claims for breach of fiduciary duty and unjust enrichment. Claims for unpaid fees fell within an exception to the mandatory arbitration clause. It permitted (but did not require) claims for unpaid fees to be brought in the courts. In reaching this conclusion, the Court considered whether the essential character, or pith and substance of the dispute, was covered by the arbitration clause. This focus ensures that parties are held to their agreement and avoids attempts by clever counsel to plead their way around an arbitration clause.

July 17, 2023July 17, 2023

Alberta – Restrictive interpretation of exceptions to stay applications – #754

In 2329716 Alberta Ltd. v Jagroop Randhawa, 2023 ABKB 297, the Court of King’s Bench stayed interim and injunctive relief applications pending a resolution of the parties’ dispute in arbitration. The Court found that the Respondent’s application for interim and injunctive relief related to arbitrable matters covered by the arbitration clause in the parties’ agreement, and that the summary judgment exception in ss. 7(2)(e) of the Alberta Arbitration Act did not apply because: (a) there had been no application for summary judgement; and (b) the Applicant did not attorn to the Court’s jurisdiction by seeking declaratory orders (in a previous proceeding that had been dismissed on procedural grounds) and injunctive relief (at the stay application hearing).

May 23, 2023May 26, 2023

Ontario – International award not enforced because of improper notice – #738

In Tianjin Dinghui Hongjun Equity Investment Partnership v. Du, 2023 ONSC 1808, Justice Kimmel refused to recognize and enforce a $120 million arbitral award in a Shenzhen Court of International Arbitration (“SCIA”) arbitration seated in Shenzhen, China against two individual respondents, Mr. and Mrs. Du, who were resident in both Canada and China. She found that the Dus had not been given proper notice of the arbitration within the meaning of Article 36(1)(a)(ii) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), being Schedule 2 to the International Commercial Arbitration Act, 2017, c. 2, Sched. 5. By extension, the Dus were also unable to present their case.

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.

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.