International/Model Law Archives - Arbitration Matters

January 10, 2025January 10, 2025

Colin’s 2024 Hot Topic: ONCA weighs in on Bias in Aroma – #888

In Aroma Franchise Company, Inc. v Aroma Espresso Bar Canada Inc., 2024 ONCA 839, the Court overturned a decision of the Ontario Superior Court of Justice, which had set aside two international arbitration awards on the basis of the existence of a reasonable apprehension of bias on the part of the Arbitrator. Undoubtedly, this was the arbitration case of 2024. The first instance decision and related proceedings have previously been canvassed by Arbitration Matters (see Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734 – Arbitration Matters, Lisa Reflects (2023): Aroma – the blockbuster case of 2023? – #804 – Arbitration Matters, and Ontario – Arbitrator no jurisdiction to hear challenge for bias after partial final award – #691 – Arbitration Matters). It is a multiple appointments case. It arose out of a decision by the Arbitrator to take on a second appointment by the same counsel acting in the Aroma arbitration that was only disclosed by accident with the issuance of the final award. The first Instance decision generated buzz in the arbitration community for, among other things: (1) the Judge below finding it was a “bad look” for the Arbitrator to have accepted an appointment in another arbitration part way through the Aroma arbitration by the same lead counsel in both matters; (2) the Judge considering relevant the parties’ pre-appointment communications on the criteria for the arbitrator to be appointed; and (3) the unresolved question of the impact, if any, of an arbitrator’s financial interest in appointments. It is the second issue that has received the most commentary on this decision.

January 2, 2025December 16, 2024

Josh’s 2024 Hot Topic – Consensual arbitration appeal mechanisms – #884

This year, in a landmark decision, McLaren Automotive Incorporated c.9727272 Canada Inc, 2024 QCCS 3457, the Québec Superior Court rendered a first-ever ruling that considered the validity of an arbitration appeal mechanism whereby the parties’ arbitration agreement allowed the appeal of an award to a different arbitrator. As reported in Arbitration Matters case note no. 864 (“Parties May Agree Upon an Arbitral Mechanism”), the Court found that such a mechanism does not offend public order principles set out in art. 622(3) of the Québec Code of Civil Procedure (“CCP”). Therefore, it found that Québec law does not prevent the parties from agreeing to an appeal mechanism in their arbitration agreement, even though it is not provided for in Québec arbitration law, which is based on the UNCITRAL Model Law.

November 20, 2024November 15, 2024

Ontario – Court endorses pre-hearing disclosure from non-parties to assist arbitration – #876

In Royal and Sunalliance Insurance v Ontario Provincial Police, 2024 ONSC 5505, the Court interpreted section 29(4) of Ontario’s Arbitration Act, 1991 (the “Act”) to allow courts to order non-party disclosure before an arbitration hearing. Section 29(4) states, “[o]n the application of a party or of the arbitral tribunal, the court may make orders and give directions with respect to the taking of evidence for an arbitration as if it were a court proceeding.” The Court’s order permits pre-hearing “discovery” of a non-party to the arbitration, as opposed to the taking of evidence at a hearing. The case sets out some considerations that may be relevant to future applications under this provision of the Act. This case highlights the need for parties seeking non-party disclosure in arbitration to carefully review the applicable legislation and frame requests for Court assistance accordingly.

November 6, 2024November 8, 2024

Ontario – Court Modifies Injunction Test in Context of International Arbitrations – #873

In NorthStar Earth & Space Inc. v. Spire Global Subsidiary, Inc., 2024 ONSC 5060, the Court granted an interim injunction before the applicant had commenced an arbitration. The Court did so even though it acknowledged that the applicant would not have met the test under Ontario law for a mandatory injunction (the strong prima facie case standard). Instead, because of the urgency, the Court applied the injunction test that would otherwise have been applied by the arbitral tribunal under Article 17 of the UNCITRAL Model Law. Article 17 requires a lower threshold of showing the claim has a “reasonable possibility” of success. The Court therefore modified the test for granting an interim injunction in the context of an international arbitration.

September 25, 2024September 27, 2024

Québec – Parties May Agree Upon an Arbitral Appeal Mechanism – #864

In McLaren Automotive Incorporated c. 9727272 Canada Inc (unreported, rendered on August 2, 2024 in File no. 540-17-015649-328), the Superior Court of Quebec confirmed that parties may agree upon an arbitral appeal mechanism, despite article 648 of the Code of Civil Procedure (“CCP”), which states the only recourse against a final award is homologation or annulment. In this case, an arbitration appeal panel appointed by the parties overturned the decision of the arbitrator, in which he denied having jurisdiction over the dispute. The Claimant then applied to the Superior Court of Quebec, requesting the homologation of the arbitrator’s decision and the annulment of the appeal panel’s decision. In this first decision addressing the validity of an arbitral appeal process, the Court confirmed the validity and jurisdiction of the appeal panel and concluded that the existence and the decision of the appeal panel was valid, considering both the relevant articles of the CCP and the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”).

August 12, 2024August 9, 2024

Ontario – Partial Summary Judgment Test Applied on Recognition of Foreign Award Motion – #853

In Shanghai Investment Co. Ltd. V. Lu et al., 2024 ONSC 2762 the Chambers Judge concluded that to grant a motion asking that a foreign award be “domesticated” (that is, recognized and made enforceable as a judgment of the Ontario Court), the motion must also meet the additional requirements for partial summary judgment. In this case, the recognition of the foreign award was pleaded as a threshold issue and formed part of a larger enforcement action. As a result, if the motion for recognition were granted, it would bifurcate the action. Although the Ontario Court of Appeal in cases like Butera v. Chown, Cairns LLP, 2017 ONCA 783 (“Butera”) has held that partial summary judgment should rarely be granted as it usually not efficient nor cost effective, the Chambers Judge determined that it was appropriate in this case. Among other factors she noted was that the recognition portion of the action was distinct from the rest and there was no risk of inconsistent findings.

July 29, 2024July 25, 2024

Ontario – Missed Opportunity re Implications of Set-Aside Test for Procedural Unfairness? – #850

In Vento Motorcycles, Inc. v. United Mexican States, 2024 ONCA 480 (CanLII) (for ease of reference, “Vento-CIPPIC“), the Court addressed The Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic’s (“CIPPIC’s”) application to intervene in Vento’s appeal of last year’s Ontario Superior Court of Justice’s dismissal of Vento’s application to set aside a 2020 international arbitration award [Vento Motorcycles, Inc. v. United Mexican States, 2023 ONSC 5964 (CanLII), (“Vento”)]. That and related decisions were discussed in several Arbitration Matters previous blogs, including 810, 796, 572, and 807. CIPPIC’s application was unsuccessful. The Court rejected its application for three reasons: (1) it hadn’t shown a sufficient link between its expertise and the issues in the appeal or its unique perspective; (2) the higher threshold to be granted leave to intervene in a private dispute; and (3) the risk CIPPIC’s intervention would unjustifiably expand the scope of the appeal.

June 5, 2024May 30, 2024

Ontario – International award enforced despite respondent’s non-participation – #839

Medivolve Inc. v. JSC Chukotka Mining and Geological Company, 2024 ONSC 2200, the Court refused Medivolve’s application to set aside an international arbitration award issued by a Moscow-seated tribunal, instead granting Chukotka’s application to recognize and enforce the award. Medivolve failed to appear at the arbitration and claimed that it had not been given proper notice or an opportunity to be heard. The Court found that Medivolve had proper notice of the arbitration within the meaning of Art. 36(1)(a)(ii) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). It had received actual notice, by email, of the pendency and status of the arbitration well before the award was rendered even though it changed offices (without notifying the opposing party).

May 24, 2024May 24, 2024

Ontario – Court can hear set aside despite NY forum selection clause – #837

In Tehama Group Inc v Pythian Services Inc, 2024 ONSC 1819, the Court declined to stay an application to set aside an arbitration award. The stay application was based on a forum selection clause in favour of the courts of New York. In denying the stay, the Ontario court applied an exception in that forum selection clause regarding certain types of disputes under the parties’ agreement that were to be referred to arbitration. The key issue in the case concerned establishing the “place” of the arbitration, which had not been expressly set out by the parties or determined by the arbitrator. Applying the International Commercial Arbitration Act, RSO 1990, c I.9 (“ICAA”) and UNCITRAL Model Law on International Commercial Arbitration (“Model Law“) the Court determined that Toronto, Ontario, was the place of arbitration and that the Ontario Superior Court of Justice was therefore the only competent forum to decide the set-aside application.

April 26, 2024April 19, 2024

Singapore – Party cannot resist enforcement on grounds already rejected at seat – #831

In The Republic of India v. Deutsche Telekom AG, [2023] SGCA(I) 10, the Singapore Court of Appeal held that India could not resist recognition and enforcement of an arbitral award based on arguments that had already been rejected in a set-aside proceeding in Switzerland, the seat of the arbitration. Applying the doctrine of transnational issue estoppel, the Court of Appeal held that parties to a proceeding to set aside an award at the seat are generally precluded from resisting recognition and enforcement of the award on grounds raised before the court at the seat and rejected by that court.