International Archives - Page 2 of 5

September 27, 2024September 27, 2024

Ontario – Alleged error in applying the law not a jurisdiction issue – #865

In Clayton v. Canada (Attorney General), 2024 ONCA 581, the Court dismissed an appeal from an order dismissing an application to set aside an arbitral award made under Chapter 11 of NAFTA (“the Award”). The appellants sought to set aside the award on the grounds that the tribunal exceeded its jurisdiction and that the award violated public policy. The Court rejected both arguments. In the underlying arbitration, which was bifurcated into liability and damages hearings, the tribunal found that the respondent had breached the relevant NAFTA provisions, but that the appellants did not establish that the breach caused the damages sought. The appellants applied to the Ontario Superior Court to set aside the Award, arguing that the tribunal exceeded its jurisdiction by not properly applying the law, and that the Award violated public policy because it was “so unreasonable as to be unenforceable”. The Superior Court dismissed the application. The Court of Appeal dismissed the appeal. Challenges to arbitral awards on jurisdictional grounds are restricted to “true jurisdictional questions”, and there is a very high burden to set aside an award for public policy reasons.

August 30, 2024August 30, 2024

Québec – Multiple arbitrator challenges res judicata and abuse of process – #859

In B Smart Technology Inc. v Norstan Communications Inc., 2024 QCCS 2416 (“B Smart”), the Court considered an application by Norstan Communications Inc. (“Norstan”) to dismiss originating applications of B Smart, in which B Smart sought an order to replace the arbitrator who was appointed to resolve their dispute. B Smart alleged that the arbitrator was biased and that his appointment was improper. What was important to the Court’s analysis was that B Smart had brought an earlier application before the Court to challenge this same arbitrator’s appointment. That judge held that the arbitrator was impartial and that his appointment was proper. Given those findings, the Court found that res judicata applied as a full answer to B Smart’s allegations and the application was dismissed. The Court also found that B Smart’s multiple attempts to challenge the arbitrator were an abuse of process.

August 27, 2024September 20, 2024

International – Award set aside after eulogy reveals friendship between tribunal president and counsel – #856

In Port Autonome de Douala v. Douala International Terminal Co. (original French, my translation), the French Court of Cassation (France’s Supreme Court) upheld the Paris Court of Appeal’s decision (original French, my translation) to set aside an arbitral award rendered by a three-arbitrator tribunal based on doubts as to the impartiality of the presiding arbitrator. Those doubts arose from a eulogy he gave of the lead counsel for one of the parties, which revealed that they were close personal friends and that the presiding arbitrator consulted that counsel “before making any important decision”.

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.