Jim Reflects (2023): Browne v Dunn is just a rule of fairness: a comment on the Vento case – #810

I’ll take Vento Motorcycles, Inc. v. United Mexican States 2023 ONSC 5964 (Vento) as my top pick for 2023. It’s a reminder that just because the strict rules of evidence may not apply in an arbitration doesn’t mean the rationale for some of those rules should be ignored. In this case, it was an alleged breach of the rule in Browne v Dunn, the very rule all Commonwealth litigators had beaten into their heads by their professors, their principals, or, for some of the less fortunate among us, a judge. At heart Browne v Dunn is about fairness, and ensuring fairness is a, perhaps the, cornerstone of arbitration.  

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Timothy Reflects (2023): Are arbitral tribunals soft targets for bad actors? – #809

This case note reflects on emerging procedural and systemic vulnerabilities of arbitration, a timely and important topic in light of the recent decision of the High Court of England and Wales in  Process & Industrial Development v Federal Republic of Nigeria, [2023] EWHC 2638 (Comm) (“P&ID v Nigeria”). In that case, Justice Robin Knowles remarked: 

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Lindsay Reflects (2023): Enforcement of International Awards: The Procedural Fairness Exception – #808

In this commentary, I provide key takeaways for parties that seek to bring or oppose an application to enforce an international arbitration award in Canada. I focus on three decisions issued by the Ontario Superior Court of Justice in 2023: Costco Wholesale Corporation v TicketOps Corporation, 2023 ONSC 573 (“Costco”), Prospector PTE Ltd. v CGX Energy Inc, 2023 ONSC 4207 (“Prospector”), and Xiamen International Trade Group Co Ltd. v LinkGlobal Food inc., 2023 ONSC 6491 (“Xiamen”). What is the procedural fairness exception and how does it work?

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Josh Reflects (2023): Multi-tier dispute resolution clauses: jurisdiction and limitations issues – #805

Canadian appellate courts have seldom made significant rulings on multi-tier dispute (sometimes called “step” or “cascading”) resolution clauses, so it is difficult to discern clear trends. A recent decision of the Hong Kong Final Court of Appeal (“HKFCA”) is of interest. It considered what forum has jurisdiction to determine whether prior steps in a multi-tier dispute resolution clause have been satisfied. 

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Ontario – High bar to oppose enforcement of international arbitral award – #777

In Prospector PTE Ltd v CGX Energy Inc, 2023 ONSC 4207, the Court considered an application by Prospector PTE Ltd. (“Prospector”) for the enforcement of an international arbitration award issued in an ICC arbitration. Prospector brought the application pursuant to the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sched 5 (“ICAA”), which incorporates the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). CGX Energy Inc. (“CGX”) opposed the application based on the procedural fairness exception in Article 34(2)(ii)(a) of the Model Law. CGX argued that it was denied the opportunity to fully present its case. However, based on the arbitral award, CGX failed to adduce sufficient evidence to prove its counterclaim. The Court granted the enforcement application. Prospector, together with the Ontario Court of Appeal decision in Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, leave to appeal to the SCC refused, 2018 CanLII 99661 (“Consolidated Contractors”), make clear that the procedural fairness exception in Article 34(2)(ii)(a) is very narrow. A court is not likely to intervene for process or public policy reasons unless the conduct or decision of the tribunal offends the principals of justice and fairness in a fundamental way. 

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Québec – “Uniformity principle” drives appointment of French amicus curiae to harmonize Québec law – #774

This case note reports on a trilogy of case management decisions that arose in the context of an application by the Claimant under art. 632 of the Code of Civil Procedure, RLRQ, c C-25.01 (“CCP”) challenging a tribunal’s jurisdiction to determine claims brought by the Respondent, which the Claimant alleged were new claims made after numerous rounds of written submissions – and thus outside the tribunal’s jurisdiction –  in a commercial arbitration relating to a lease agreement (the “Arbitration”). The key issues decided were: (1) a court conducts a hearing de novo when deciding an objection to a tribunal’s ruling on its own jurisdiction (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2103); (2) Claimant’s application for an interim stay of arbitral proceedings during the pendency of its jurisdictional challenge was denied (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2098); and (3) the Court appointed a French amicus curiae with expertise in international law to assist it during the jurisdictional hearing, invoking the Court’s duty to abide by the uniformity principle in interpreting Québec legislation based on the Model Law (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 3061).

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B.C. – “Neutral nationality principle” not limited to nationality in Court’s arbitral appointment – #773

In Fotmer v Tilray, 2023 BCSC 1323, the Court held that in an international arbitration, an American company’s multiple connections to British Columbia (including a place of business) precluded court appointment of a Canadian arbitrator over the objection of the opposing party. After considering the neutral nationality principle, the Court found that although the respondent was incorporated in Delaware, its close and obvious connections to British Columbia could give rise to a perception of bias if a Canadian arbitrator were appointed. Such an appointment would risk undermining the integrity of the arbitral process. 

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British Columbia – Google wins stay of conspiracy claims; plaintiff refuses to arbitrate – #761

In Spark Event Rentals Ltd. v. Google LLC, 2023 BCSC 1115, the BC Supreme Court granted the Google Defendants a stay in favour of arbitration. The Court rejected Spark’s assertion that the applicable arbitration agreement prohibited it from commencing arbitration, and that the entire dispute with Google could not be resolved in arbitration. Spark had also sued affiliates of Apple in the action. Apple applied, unsuccessfully, to stay the action on the basis that it was so intertwined with the claims against Google that it would amount to an abuse of process for the BC litigation to proceed in parallel with an arbitration against Google on the same claims. However, Spark represented to the Court that if its claims against Google were stayed, it would not proceed with an arbitration; accordingly, the Court found that Apple’s stay application was moot. While the Court left the door open to Spark to arbitrate with Google, in effect the arbitration agreement appears to have provided a tactical shield for Google – for now. This may be a case to watch, as Canadian courts have not yet definitively ruled on the availability of joint and several damages from co-conspirators in private litigation under the Competition Act, RSC 1985, c C-34. Another unsettled question that may arise in due course is whether, in these circumstances, a party has a right of contribution and indemnity from a co-conspirator if it is ordered to pay more than its proportional share of damages.

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Ontario – No contracting out of the Model Law – #752

In EDE Capital Inc. v Guan, 2023 ONSC 3273, Justice Vermette dismissed a set-aside application on the basis that the applicant had failed to make out a breach of procedural fairness or lack of jurisdiction. In doing so, Justice Vermette also held that the applicable legislation in this case was the Model Law, despite the fact that the parties’ arbitration agreement referred to the domestic arbitration act. 

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Ontario – Competing “jurisdiction” clauses result in application for stay being dismissed – #743

In RH20 North America Inc. et al v. Bergmann et al, 2023 ONSC 2378, the moving defendants brought both a motion under Rule 21 striking out certain of the plaintiff’s claims as disclosing no reasonable cause of action, and an application for a stay for want of jurisdiction on the basis of arbitration clauses in their underlying contracts with the plaintiffs. They met with divided success. While granting relief on the Rule 21 motion, Justice Valente dismissed the stay application on a variety of grounds, including that there were competing arbitration and jurisdiction clauses and that there was an attornment to the court’s jurisdiction as a result of bringing the Rule 21 motion.

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