International Archives - Arbitration Matters

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.

June 21, 2023June 23, 2023

Ontario – Courts must decide arbitral jurisdiction de novo – #748

In Russian Federation v. Luxtona Limited, 2023 ONCA 393, the Ontario Court of Appeal held that in an application to Ontario courts under the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), being Schedule 2 to the International Commercial Arbitration Act, 2017, c. 2, Sched. 5, for the court to decide whether an arbitral tribunal had jurisdiction, the court must decide the jurisdictional question de novo. In other words, there is no deference owed to the arbitral tribunal on the question of that tribunal’s jurisdiction. The Court reached this conclusion after considering the strong international consensus to that effect, and reaffirmed the “uniformity principle”, which holds that it is “strongly desirable” for Ontario’s international arbitration regime to be interpreted coherently with that of other countries.

June 5, 2023June 5, 2023

Ontario – No hearing de novo in case of challenge to procedural fairness – #742

In All Communications Networks of Canada v. Planet Energy Corp., 2023 ONCA 319, the Court dismissed the appeal of a judgment upholding an arbitral award in favour of Respondent All Communications Networks of Canada (“ACN”) in the amount of $29,259,787 and made an order enforcing the award. In first instance, Planet Energy Corp. (“Planet”) sought to set aside the arbitral award based on the failure of due process, arguing: (1) that it was not given the opportunity to present its case; and (2) that the Arbitrator’s ruling violated public policy. Before the Court of Appeal, Appellant Planet raised the additional argument that the first instance judge failed to apply the right standard of review. Planet argued that a de novo hearing was required to examine properly the arguments raised against the arbitral award. The Court of Appeal dismissed Planet’s arguments and confirmed that a party seeking to set aside an arbitral award based on a failure of due process must prove that the Arbitrator’s conduct is serious enough to dismiss the application to enforce the award under the law of the enforcing State (here, Ontario). The Court of Appeal also confirmed that a party seeking to set aside an award based on a violation of public policy shall demonstrate that the award offends Ontario’s principles of justice and fairness in a fundamental way.

May 24, 2023May 24, 2023

Ontario – Peace River “arguable case” standard applies to ICAA stay motion – #739

Husky Food Importers & Distributors Ltd v JH Whittaker & Sons Limited and Star Marketing Ltd, 2023 ONCA 260 addresses the standard of proof that a party seeking a stay of proceedings under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA”) must meet in order to establish the existence of an arbitration agreement that grounds the stay of proceedings. The Court of Appeal found that Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 supersedes the stay analysis articulated in Haas v. Gunasekaram, 2016 ONCA 744.

May 8, 2023May 8, 2023

Ontario – Multiple arbitral appointments give rise to reasonable apprehension of bias – #734

In Aroma Franchise Company Inc. et al. v Aroma Espresso Bar Canada Inc. et al., 2023 ONSC 1827, Justice Steele set aside two international awards (on the merits and as to costs and interest) arising out of a franchise dispute on the basis of a reasonable apprehension of bias on the part of the Arbitrator for failure to disclose that during the arbitration he had been appointed by counsel for one of the parties to serve as sole arbitrator on another matter even though it did not involve a franchise dispute and was in a different industry.

April 10, 2023April 4, 2023

BC – Court determines arbitrator jurisdiction, exercising exception to competence-competence – #726

In Isagenix International LLC v. Harris, 2023 BCCA 96, Justice Griffin, for the British Columbia Court of Appeal, upheld an order dismissing the Appellant’s application made pursuant to section 8 of the International Commercial Arbitration Act, RSBC 1996, c 233 (the “ICCA”) for a stay of proceedings in favour of arbitration. In particular, she rejected the Appellant’s argument that the chambers justice had misapplied the principle of competence-competence by deciding the question about whether the underlying negligence claim fell within the scope of the arbitration clause, rather than referring the jurisdictional matter to the arbitrator. Justice Griffin found that the chambers justice did not err in law because he came within one of the well-established exceptions to the competence-competence rule.

January 16, 2023March 13, 2023

Myriam’s 2022 Hot Topic: Procedural Fairness in International Arbitration – #704

“Out here, due process is a bullet”, said John Wayne’s Col. Kirby in The Green Berets.

Due process. Procedural fairness. Natural justice. Audi alteram partem. These are all different ways of formulating one of the bedrock principles of “civilized” dispute resolution processes, which distinguishes such processes from the guerrilla justice dispensed on the battlefield. Parties must be treated fairly and equally. Parties must be given the opportunity to present their case. The process – taken as a whole – must be fair.

January 6, 2023March 13, 2023

John’s 2022 Hot Topic: Summary judgment in arbitration – #699

My “hot topic” for 2022 is the Court of Appeal for Ontario’s confirmation that an arbitration can be determined by summary judgment. In Optiva Inc. v. Tbaytel, 2022 ONCA 646, the Court approved proceeding by summary judgment motion where such a motion is consistent with the parties’ arbitration agreement. While the case addressed four grounds of appeal, including whether the arbitrator’s ruling to proceed by summary judgment was a procedural order or a jurisdictional award, the central issue, and my “hot topic,” is whether the arbitrator’s partial award, which decided a summary judgment motion should be set aside. For a summary of the decision, see Case Note – No oral hearing required even if one party requests it #667.

December 7, 2022December 5, 2022

Ontario – Arbitrator no jurisdiction to hear challenge for bias after partial final award – #691

In Aroma Franchise Company, Inc. v Aroma Espresso Bar Canada Inc., 2022 ONSC 6188, Justice Cavanagh dismissed the Respondents’ motion to stay or dismiss an application to set aside a final award on the merits on the ground of the reasonable apprehension of bias of the Arbitrator. The Respondents argued that the Applicant was required to bring its challenge to the Arbitrator first in accordance with Article 13 of the Model Law because the arbitration had not yet terminated; interest and costs had yet to be determined. However, Justice Cavanagh found that the Arbitrator was functus officio. Therefore, the application was properly before the Court.

November 3, 2022November 15, 2022

Québec – No clean hands, no security despite stay of homologation application – #677

In Specter Aviation v United Mining Supply, 2022 QCCS 3643, Justice Castonguay granted a stay of an application by the successful party in a foreign arbitration to homologate the award, but denied the applicants’ alternative request for security, pending the unsuccessful party’s annulment application to the Paris Court of Appeal. Despite recognizing that a court should be reluctant to interfere with a successful party’s enforcement efforts, Justice Castonguay found that the annulment application was, “neither futile nor frivolous” and that the successful party did not have clean hands and had resorted to a self-help remedy. He also ordered costs against the successful party.