Institutional Archives - Page 3 of 4

June 30, 2022July 13, 2022

Ontario – “Vigorous” intervention and “difficult”, “incisive” questions by arbitrator not bias – #632

In Dufferin v Morrison Hershfield, 2022 ONSC 3485, Justice Woodley dismissed an application made pursuant to sections 13(6) and 15(1) of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17, for an order removing an arbitrator on the basis that, “circumstances exist which give rise to justifiable doubts about the Arbitrator’s independence and impartiality, which are alleged to give rise to a reasonable apprehension of bias”. Essentially, the allegations were that the arbitrator had “entered the fray” because of the many questions he asked the witnesses, pre-judged the issues, and become an advocate for the Respondent. Justice Woodley found that the arbitrator was interventionist, but that she could find no bias or a reasonable apprehension of bias; “instead, [she] found a deeply invested, engaged Arbitrator that worked tirelessly for the parties in furtherance of his mandate, which was to determine the truth of the issues before him”. The Applicants were not out of time to bring their application because the alleged conduct complained of was “cumulative”. In any event, it would be “nonsensical” to allow a partial arbitrator to continue, even if the Respondent had not objected in time.

May 23, 2022May 26, 2022

Québec – Court extends arbitrator’s immunity to appointing authority – #619

In B Smart Technology inc. v. American Arbitration Association, 2022 QCCS 1526, Justice Mark Phillips granted the Defendants’ Application for dismissal of the Plaintiff’s Request for Provisional Interlocutory Injunction and Order to Safeguard the Rights of Plaintiff. The Defendants were the American Arbitration Association (“AAA”) and the arbitrator it had appointed. In its Request, Plaintiff sought orders: (1) to recuse and replace the arbitrator; (2) to review the arbitration proceedings, including the costs of the proceedings, the reimbursement for arbitrator’s fees paid to date; and (3) alternatively, the annulment of the arbitration clause and referral of the dispute to the Superior Court. Justice Phillips’s judgment was mainly based on the application of two well-known principles in arbitration law: arbitrator protection against prosecution/immunity (sec. 621 CCP); and the exclusion of court review except as provided by law (sec. 622 CCP). Justice Phillips reaffirmed that the arbitrator’s protection against prosecution is broad and applies both to the arbitrator’s liability and to any challenges against the conduct of the arbitration process itself. He found that the institute offering arbitration services is covered by the protection as well. Justice Phillips also confirmed the exclusion of court review principle, which prevents courts from interfering in an arbitration process other than within the strict and limited occasions provided by law. In this case, the law did not provide for court intervention. Finally, the issue was moot because the arbitrator terminated the arbitration for the Plaintiffs’ failure to pay his costs, as he was entitled to do under the AAA Rules.

May 12, 2022May 10, 2022

Ontario – Set- aside application failed; dispute covered by arbitration agreement, no objection to jurisdiction – #616

In Baffinland v Tower-EBC, 2022 ONSC 1900, Justice Pattillo dismissed both: (1) an application to set aside an award from a majority of an arbitral tribunal (the “Majority Award”) under section 46 of the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Act”); and (2) an application for an order granting leave to appeal the Majority Award and Costs Award under section 45(1) of the Act. Justice Pattillo found there were no grounds upon which to set aside the Majority Award; there was no lack of jurisdiction or failure to be treated equally and fairly. Nor could leave to appeal be granted under section 45(1) of the Act because the arbitration agreement precluded an appeal.

May 10, 2022May 10, 2022

Ontario – Determining appeal rights in arbitration agreement in effect since 1960 Arbitration Act – #614

In D Lands Inc. v KS Victoria and King, 2022 ONSC 1029, Justice Dietrich granted the Landlord leave to appeal the tribunal Majority’s award in a rent reset arbitration, but ultimately dismissed the appeal and the Landlord’s application to set aside the Majority’s award on jurisdictional grounds. Her reasons summarize the legal principles to be applied to determine whether the parties agreed to a right of appeal and, in particular: (1) the effect of an arbitration agreement when it spans a period of time in which more than one piece of arbitration legislation governed that provided for different rights of appeal; and (2) as a matter of contract interpretation, the language necessary for the parties to contract out of rights of appeal. Here, the parties’ agreement was entered into in 1968 and the arbitration legislation in Ontario changed since then from an “opt in” regime to an “opt out” regime. However, the parties provided in their arbitration clause that any arbitration was to be conducted under the ICDR Rules, which were silent on appeal rights. Therefore, it was necessary for Justice Dietrich to interpret the contract as a whole to determine the parties’ intentions. The words in the arbitration agreement that the tribunal’s award “is conclusive on the parties” and that judgment may be entered in any court having jurisdiction were not sufficiently clear to express an intention to contract out of a right to appeal.

May 9, 2022May 9, 2022

Québec – Intervention by appointing authority not permitted on challenge to decision – #613

In Mullen v. Nakisa inc., 2022 QCCS 1164, Justice Lacoste rejected a request that the Canadian Commercial Arbitration Centre (the “CCAC”), an appointing institution, be permitted to intervene in an appeal of a decision by an arbitrator appointed by it. Applying the higher threshold for interventions in private litigation, Justice Lacoste held that there was no reason to permit the CCAC to intervene as it would not add any substance to the arguments on appeal.

May 5, 2022May 17, 2022

Ontario – Uber arbitration, and class action waiver not certified as common issue – #612

In Heller v. Uber Technologies Inc., 2022 ONSC 1997, Justice Perell dismissed a motion to certify as a common issue the enforceability of an Arbitration and Class Action Waiver Clause in the Uber standard form services agreement that members of the class signed. As a result, this issue will not be determined at a common issues trial. Class action members who did not exercise their right to opt out of the clause are still class members and may be able to negate the operation of the waiver at individual issues trials if the class action gets that far.

April 22, 2022April 22, 2022

Ontario – Best practices: pre-appointment communications and application to appoint arbitrator – #607

In Magna International Inc. v Granite Real Estate Inc., 2022 ONSC 2200, Justice Myers granted the application of Magna, the tenant in a lease agreement, for an order appointing an arbitrator to fix the rent for a renewal term of the lease. The parties agreed that the tenant had validly renewed the lease, but could not agree on the rent for the renewal period. Respondent Granite, the landlord, opposed the appointment of the arbitrator for two reasons: (1) the evidence in support of the application was insufficient; and (2) the arbitration clause in the lease was invalid because it contained permissive, rather than mandatory, language and was too vague because it did not specify either the seat or the applicable rules of the arbitration. Justice Myers set out the preferred approach for both communicating with the proposed arbitrator in circumstances in which the parties are not cooperating and the kind of evidence that should be adduced on an application for a court order appointing the proposed arbitrator, using the analogy of the process for the court appointment of a receiver/trustee in bankruptcy. Also, he found that the issues relating to the validity of the arbitration clause were to be referred to the arbitrator under the competence-competence principle.

March 29, 2022April 5, 2022

Alberta – Rights of appeal must be explicit in arbitration agreement – # 598

In Sheridan v Sheridan, 2022 ABQB 180, Justice Jerke dismissed the appeal of an arbitral award for which leave had not been sought. The appellant Husband argued that by providing in the parties’ arbitration clause that any award was “subject to the rights of appeal under s. 44” of the Alberta Arbitration Act, RSO 2000, c. A-43, he was entitled to appeal on all of the grounds set out in s. 44(1) – on a question of law, on a question of fact or on a question of mixed law and fact. However, Justice Jerke found that this language meant that the award was also subject to s. 44(2) of the Act, which provides that where the arbitration agreement does not provide that the parties may appeal an award on a question of law, leave is required. This means that the arbitration agreement must explicitly allow an appeal on the s. 44(1) specified grounds, or the parties may appeal only a question of law, with leave of the court. Because the parties’ arbitration agreement did not explicitly do so, the appeal was dismissed because the Husband had not sought leave.

March 3, 2022May 4, 2022

Ontario – No issue estoppel regarding arbitrator’s findings in later litigation – #591

In The 6^th Line Mofos Limited v Stewart, 2022 ONSC 520, Justice Healey dismissed a summary judgment motion brought by parties to court proceedings, who argued that issue estoppel applied to prevent the court from making findings that were inconsistent with those made in a previous arbitration. The plaintiffs, who were adverse in interest in the arbitration, sued a land appraiser whose report was central to their dispute and which the arbitrator found did not meet the requisite professional standards. The plaintiffs argued that this finding was sufficient to establish the negligence of the defendant appraiser and they sought in damages recovery of the costs they had incurred in relation to the arbitration. Justice Healey disagreed and found that two elements of issue estoppel could not be met: (1) the same question was not before both the court and the arbitrator; and (2) the defendant appraiser was a witness in the arbitration and was not a party or its privy.

December 6, 2021May 4, 2022

BC – Franchisor addresses Uber arbitration agreement flaws to obtain stay of proceedings – #560

In Kang v Advanced Fresh Concepts Franchise Corp., 2021 BCPC 262, Small Claims Court Judge S. Archer granted a motion to stay an action in favour of arbitration under either section 8 of the International Commercial Arbitration Act, R.S.B.C. 1996 c.233 or, in the alternative, section 7 of the B.C. Arbitration Act, S.B.C. 2020, c.2. Judge Archer concluded that the international Act applied because the parties, at the time of their agreement, had their places of business in different countries, but that it didn’t matter because the test for a stay was essentially the same. Moreover, she distinguished the facts from those in Uber Technologies Inc. v Heller, 2020 SCC 16; the arbitration agreement was not unconscionable because the income earned by the claimant franchisee was “significant” as compared with the cost to commence an arbitration under the ICDR Rules.