International Archives - Arbitration Matters

May 10, 2024May 3, 2024

Québec – Attempt to circumvent ICC Tribunal order amounts to fraud (in Canada) – #834

In Eurobank Ergasias S.A. v. Bombardier inc., 2024 SCC 11, the Court held that a call on a bank guarantee in contravention of an order of an arbitral tribunal in a pending ICC arbitration amounted to fraud under Canadian law, such that the bank that issued a related counter-guarantee was required to refuse payment.

May 8, 2024May 10, 2024

B.C. – No arbitrator bias where prima facie merits and credibility determinations made – #833

In Johnston v. Octaform Inc., 2024 BCSC 537, the Court dismissed a petition to have an arbitrator removed from an ongoing arbitration on the basis of an alleged reasonable apprehension of bias. The circumstances relied on by the petitioners arose from the arbitrator’s issuance of a freezing order and other procedural directions, in a hard fought and contested arbitration. The fact that the freezing order required the arbitrator to make findings of credibility and preliminary merits determinations did not give rise to bias. Also, the trigger for the 15-day period to challenge an arbitrator for bias is not an “open and fluid concept”.

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.

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.

February 28, 2024February 23, 2024

B.C. – Reasons for granting anti-suit injunction to prevent arbitration different than litigation – #818

In Axion Ventures Inc. v Bonner, 2024 BCSC 45 (“Axion”), the Court addressed a British Columbia application for anti-suit injunctions to prevent the respondents from proceeding with a Washington State lawsuit and an arbitration seated in Thailand. Axion is a skirmish in the ongoing war over the ownership and control of Axion Ventures Inc. and Axion Interactive (the two applicants in this case) and their assets and those of their subsidiary and related entities in other jurisdictions around the world. The applicants were both plaintiffs and defendants in litigation already underway in BC. For reasons described below the Court ultimately adjourned the anti-suit injunction applications. However, it recognized a distinction between anti-suit injunctions sought in respect of foreign court actions and those sought in respect of commercial arbitrations; namely, that the latter do not engage principles of comity. And of particular interest to BC counsel, the Court suggested there is no absolute rule in BC that an anti-suit can only be sought after a stay application is brought in the foreign proceeding.

February 12, 2024February 9, 2024

Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814

In Lochan v. Binance Holdings Limited, 2023 ONSC 6714, the Court refused to stay a proposed class action against the defendant cryptocurrency trading platform in favour of arbitration. The underlying claim concerns allegations that the defendant sold cryptocurrency derivatives without filing a prospectus, contrary to Ontario’s securities laws. The Court held that the arbitration agreement, embedded in the defendant’s website terms and conditions, was both unconscionable and contrary to public policy – based on the cost of the arbitration contemplated by the agreement and based on the clause’s complexity and lack of transparency. The Court’s overarching concern was that the arbitration provisions were not fair to platform users. The Court also provided a helpful difference between unconscionability and a violation of public policy.

January 15, 2024April 30, 2024

Chris Reflects (2023): Arbitrator Bias and the Unanimous Award – #807

When will a court confirm a unanimous arbitral award issued by a three-person panel where one of those arbitrators was biased? This case note reviews three cases that try to answer that question. In each, the Court applied the Model Law. In one recent casethe Ontario Superior Court of Justice upheld the award, finding that the bias did not cause actual prejudice. The other two cases, one from India, the other from Germany, reached the opposite conclusion, highlighting the pernicious, and often unseen, effect that bias can have on the deliberative process.

January 3, 2024April 30, 2024

Lisa Reflects (2023): Aroma – the blockbuster case of 2023? – #804

Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc., 2023 ONSC 1827 was the case I think created the biggest “buzz” in 2023, likely because it was the only Canadian case (of which I am aware) that has addressed the gnarly issue of arbitrator disclosure obligations in circumstances in which the arbitrator has taken on multiple appointments at the same time, a situation in which the IBA Guidelines on Conflict of Interest in International Arbitration provides little, well, guidance. I reported on this decision in an earlier case note: Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734 – Arbitration Matters. Since then, the case has continued to generate interest and commentary, which has kept me thinking about it. The Ontario Court of Appeal heard the appeal on December 6, 2023.

December 4, 2023December 14, 2023

Ontario – No unfairness despite Browne v Dunn violation and arbitrator reasonable apprehension of bias – #796

In Vento Motorcycles, Inc. v. United Mexican States, 2023 ONSC 5964, the Court dismissed an application to set aside an investor-state arbitration award on the grounds that the arbitral tribunal denied procedural fairness, and that one of the tribunal members was biased. Although the Court found no unfairness, it acknowledged a reasonable apprehension of bias in respect of the impugned arbitrator. The Court nonetheless exercised its discretion under art. 34 of the Model Law to dismiss the set–aside application.

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.