In CC/Devas (Mauritius) Ltd v. Republic of India, 2022 QCCS 4785, Justice Pinsonnault rejected the Republic of India’s effort to invoke state immunity in response to an application seeking the recognition and enforcement of two investment treaty awards. He found that the Plaintiffs had met their burden to prove that (1) the commercial activities exception applied, and (2) India had waived state immunity to enforcement proceedings.
Continue reading “Québec – Court rejects foreign state immunity to award enforcement – #710”Timothy’s 2022 Hot Topic – At the crossroads of class actions and arbitration – #702
For this year’s “hot topics” post, I have chosen to spotlight an enduring subject: the policy conflict that can arise between arbitration and consumer class actions. The heat comes from developments in 2022 which suggest a fresh look (or two!) at how to reconcile pro-arbitration international legal commitments and policy objectives with consumer protection and class action laws.
Continue reading “Timothy’s 2022 Hot Topic – At the crossroads of class actions and arbitration – #702”Eric/James’s 2022 Hot Topic: What is next for arbitration and insolvency? (Part 1) – #698
By Eric Morgan and James Plotkin.
This past year brought two important decisions about the interrelationship between arbitration and insolvency proceedings: the Supreme Court’s decision in Peace River Hydro Partners v Petrowest, 2022 SCC 41 (“Petrowest”) and the Ontario Court of Appeal’s decision in Mundo Media Ltd. (Re), 2022 ONCA 607 (“Mundo”). Both decisions, in different ways, concern the tension between judicial authority to supervise proceedings brought by a receiver or trustee under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (“BIA”) and parties’ autonomy to choose to have their disputes determined through arbitration. While the two Courts reached the same bottom-line conclusion – that the particular arbitration clauses were “inoperative” in the circumstances of an insolvency and thus not binding on receivers or trustees – the decisions leave unanswered questions about the ways that insolvency and arbitration continue to interact with each other.
Continue reading “Eric/James’s 2022 Hot Topic: What is next for arbitration and insolvency? (Part 1) – #698”Ontario – High threshold to set aside international award for damages not met – #694
In Clayton v. Attorney General of Canada, 2022 ONSC 6583, Justice Akbarali rejected an attempt to set aside a damages award made by a three-member tribunal (the “Tribunal”) originally constituted under Chapter 11 of the North American Free Trade Agreement (“NAFTA”). The applicants argued that the Tribunal had exceeded its jurisdiction in respect of the legal standard to be applied, breached procedural fairness by refusing to admit certain expert evidence, and rendered an award that was contrary to public policy. Citing previous jurisprudence on the high thresholds to be met for each of these grounds to succeed – thresholds consistent with deference to arbitral tribunals, – Justice Akbarali found no errors had be committed. She dismissed the application.
Continue reading “Ontario – High threshold to set aside international award for damages not met – #694”Ontario – Refusal to respond not a waiver to arbitrate – #686
In Justmark Industries Inc. v. Infinitus (China) Ltd., 2022 ONSC 5495, Justice Williams granted the Defendant/Moving Party’s motion to stay the court action in favour of arbitration. The Plaintiff/Responding Party Justmark Industries Inc. (“Justmark”) commenced the court action for breach of contract against the Defendant/Moving Party Infinitus (China) Ltd. (“Infinitus”). The contract, however, contained an arbitration clause requiring disputes to be arbitrated in Hong Kong by the Arbitration Committee of the International Trade Council (the “ITC”) pursuant to the law of the United Kingdom. As such, Infinitus brought a motion under s 9 of Ontario’s International Commercial Arbitration Act, 2017 (the “ICAA”), which incorporates Article 8(1) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), to stay the proceedings. In response, Justmark alleged that Infinitus had waived its right to arbitration and thus rendered the arbitration agreement “inoperative” under Model Law Article 8(1). Justmark claimed that Infinitus’s failure to respond to its requests to commence arbitration amounted to waiver. Justice Williams, however, dismissed Justmark’s argument on the grounds that there was no evidence that “[16] … Infinitus had the requisite ‘unequivocal and conscious intention,’ or any intention, to abandon its right to arbitrate.”
Continue reading “Ontario – Refusal to respond not a waiver to arbitrate – #686”Federal – Amazon purchasers’ class-action competition claims referred to arbitration – #683
In Difederico v. Amazon.com, Inc., 2022 FC 1256, Justice Furlanetto of the Federal Court granted Defendants’ motion to refer to arbitration claims asserted under section 45 of the Competition Act, RSC 1985, c C-34 (the “Competition Act”) by a proposed class representative plaintiff. Of interest to arbitration observers, the judgment considered the circumstances which qualify as “commercial legal relationships” within the meaning of the United Nations Foreign Arbitral Awards Convention Act, RSC 1985, c 16 (2nd sup) (“UNFAACA”), the statute which implements the New York Convention into the federal law of Canada. The New York Convention, Article II(3), requires a court of a contracting State, at the request of a party, to refer claims covered by an arbitration agreement to arbitration, unless the arbitration agreement is null and void, inoperative, or incapable of being performed. This case also features detailed analysis of the access-to-justice exception to the competence-competence principle recognized in Uber Technologies, Inc. v. Heller, 2020 SCC 16 (“Uber”).
Continue reading “Federal – Amazon purchasers’ class-action competition claims referred to arbitration – #683”Québec – No enforcement of award against alter egos – #681
In a much-anticipated decision, the Québec Court of Appeal overturned Justice Pinsonneault’s first instance decision and quashed the seizure before judgment by garnishment taken against a subsidiary and non-party to an arbitration to answer for the debt of the parent pursuant to an arbitral award. Justice Pinsonneault’s decision was discussed in a previous case note concerning CC/Devas (Mauritius) Ltd. v. Republic of India, 2022 QCCS 7. In Air India, Ltd. v. CC/Devas (Mauritius) Ltd., 2022 QCCA 1264, the Court of Appeal unanimously granted the appeal of the parent, ruling that a foreign award cannot be enforced against a third party’s assets unless it is proven: (1) that the third party is the debtor’s alter ego; and (2) that the third party was used in order to conceal fraud, abuse of right or a violation of a public order rule by the debtor. The Court of Appeal ruled that the applicable criteria for the enforcement of a foreign award against the shareholder of a condemned party were the same as the applicable criteria to lift the corporate veil, as codified at section 317 CCQ. Here, those criteria were not met, and the court did not lift the corporate veil.
Continue reading “Québec – No enforcement of award against alter egos – #681”Ontario – Foreign award enforcement upheld on appeal despite previous attornment to court – #679
In Wang v. Luo, 2022 ONSC 5544, Justice LeMay, sitting as an Ontario Divisional Court judge, upheld the enforcement of a foreign arbitral award rendered under the auspices of the China International Economic and Trade Arbitration Commission (“CIETAC”). He rejected the Appellant’s arguments that the Superior Court of Justice erred in enforcing the award, including an argument that enforcement was improper given the Respondent’s previous attempt to pursue its claim before the Ontario Small Claims Court.
Continue reading “Ontario – Foreign award enforcement upheld on appeal despite previous attornment to court – #679”Manitoba – Arbitration Agreement Invalid due to Unconscionability and no Consideration – #669
In Pokornik v. SkipTheDishes Restaurant Services Inc., 2022 MBKB 178, Justice Chartier considered the principles arising from Uber Technologies Inc. v. Heller, 2020 SCC 16 (CanLII) (“Uber”) in a contract of adhesion between a restaurant delivery corporation, SkipTheDishes, and one of its individual couriers. Justice Chartier found that there was no arbitration agreement; SkipTheDishes asserted that the courier was bound to a new agreement with an arbitration agreement that only became effective after she sued. Had he found otherwise, Justice Chartier would have found the agreement to be invalid due to unconscionability and a lack of consideration. These findings were despite efforts by SkipTheDishes to address some of the concerns that animated the Supreme Court of Canada’s decision in Uber.
Continue reading “Manitoba – Arbitration Agreement Invalid due to Unconscionability and no Consideration – #669”Ontario – Failure to pay award does not justify security for costs – #653
In Amelin Resources, Inc. v. Victory Energy Operations LLC, 2022 ONSC 4514, Associate Justice C. Wiebe dismissed a motion for security for costs under Rule 56.01(1)(d) of the Ontario Rules of Civil Procedure, finding that Victory, the Defendant/Moving Party, did not meet its onus of showing that there was “good reason to believe” that Amelin, the Plaintiff/Responding Party, had insufficient assets to pay the Victory’s costs in Ontario. Amelin’s failure to pay amounts granted to Victory under an arbitration award and U.S. Court order did not suffice.
Continue reading “Ontario – Failure to pay award does not justify security for costs – #653”