International Archives - Page 2 of 6

February 24, 2025February 24, 2025

B.C. – Court finds pre-condition to competence-competence – #895

The competence-competence principle is well established in Canadian law. It requires that issues relating to an arbitrator’s jurisdiction are generally first to be determined by the arbitrator instead of the court. In ONE Lodging Holdings LLC v American Hotel Income Properties REIT (GP) Inc., 2024 BCSC 2179, the Chambers Judge identified what amounts to a pre-condition, or exception, to the application of the competence-competence principle beyond those previously recognized by the Supreme Court of Canada in cases such as Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) and Uber Technologies Inc. v. Heller, 2020 SCC 16. Those recognized exceptions are: (1) where the jurisdictional issue is a pure question of law or a question of mixed fact and law requiring only a cursory review of the documentary record, or (2) where there is a “real prospect” that the arbitrator may not be able to resolve the jurisdictional challenge due to practical barriers. Here, the Chambers Judge found that the competence-competence principle also does not apply when there is a dispute as to the existence of an arbitration agreement, as opposed to a dispute about the validity or scope of an existing arbitration agreement.

January 28, 2025January 31, 2025

International – Agreement to Arbitration and Enforcement Jurisdiction a Package – #891

In Republic of India c. CCDM Holdings, 2024 QCCA 1620 the Court was asked to determine three appeals relating to the enforcement of arbitral awards in the context of: (1) both the commerciality exception and waiver in the State Immunity Act; (“SIA”) (2) seizure before judgment in escrow of sums held by the Montreal-headquartered International Air Transport Association (“IATA”) for the benefit of two Indian state entities before the question of their immunity had been decided on the merits; and (3) the temporal scope of provincial legislation passed in response to said seizures at the IATA. The Court concluded that: (1) India had waived immunity under the SIA by becoming a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”) and by agreeing to arbitration under the 1998 India-Mauritius bilateral investment treaty (“India-Mauritius BIT”); (2) the first-instance court had not erred in authorizing ex parte seizure before judgment in advance of the question of immunity being decided on the merits; and (3) the provincial legislation was effective retroactively to the effective date given therein but no further back in time – the seizure of sums held by the IATA prior to this date remained untouched by the legislation.

January 10, 2025January 10, 2025

Philippe’s 2024 Hot Topic – Québec courts rejected creative challenges to arbitral awards – #887

In 2024, parties raised various novel and creative grounds (and also some more traditional grounds) to seek annulment or resist the homologation of arbitral awards in Québec.

November 22, 2024November 20, 2024

Québec – Peace River not considered where referral to arbitration sought under LACC/CCAA – #877

In 9327-6269 Québec inc. and Banque de Montréal, 2024 QCCS 3399, the Court dismissed the Creditor Applicants’ demand to lift the stay of proceedings under the Loi sur les arrangements avec les créanciers des compagnies (LACC)/ Companies’ Creditors Arrangement Act (CCAA) so that they could file proceedings against one of the Debtors (Laboratoires C.O.P. inc.) in a New York-seated arbitration, where they sought to be declared owners of potential tax credits and refunds to which they alleged they were entitled as part of the selling price under a Sale Purchase Agreement between the Applicants and the Debtors’ shareholders. The Sale Purchase Agreement contained an arbitration clause. The Applicants argued that under New York law the Sale Purchase Agreement created a constructive trust in their favour, as a result of which the tax credits and refunds received or to be received by the Debtor were never included in the Debtor’s assets. Therefore, the Applicants argued that they should not be subject to the CCAA. The Court dismissed the Applicants’ motion. Even if the Applicants obtained a favourable ruling from the arbitration tribunal, it would be ineffective because the constructive trust concept is not recognized under Québec law and it would be detrimental to other creditors of the Debtor. In any event, the arbitral award would not modify the distribution order of the Debtors’ assets to their creditors under the CCAA because, when a conflict of law arises, the CCAA’s application is governed by the lex fori, in this case Québec. Foreign law should not alter the outcome of the CCAA’s implementation due to its rehabilitative purpose. Therefore, lifting the stay would not help the Applicants and would only cause the CCAA procedure to be delayed.

November 18, 2024November 22, 2024

Ontario – Application to enforce award against non-party to arbitration stayed – #875

In Sociedad Concesionaria Metropolitana De Salud S.A. v Webuild S.P.A, 2024 ONSC 4491 the Court considered whether to grant an application to enforce an arbitral award against a non-party to the arbitration. The non-party had purchased assets of the unsuccessful party to the arbitration as part of a restructuring proceeding in Italy. The successful party to the arbitration and the non-party disagreed on whether the asset purchase included the transfer of the unsuccessful party’s obligations under the award to the non-party. The Court stayed the enforcement application pending a determination of that threshold issue by the Italian courts.

October 23, 2024October 25, 2024

Federal Court – Section 46(1) of Marine Liability Act gives claimant option to avoid arbitration – #870

Crosby Molasses Company Limited v. Scot Stuttgart (Ship), 2024 FC 1358 highlights a little-known provision in Canadian maritime law that is being interpreted in a way that ignores arbitration law principles and overrides arbitration clauses in the context of international maritime carriage of goods. The provision, section 46(1) of the Marine Liability Act, SC 2001, c 6 (“Marine Liability Act”) states that, “if a contract for the carriage of goods by water provides for the adjudication or arbitration of claims… in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada...”

October 11, 2024October 11, 2024

Manitoba – Court denies stay in favour of arbitration for several (suspect) reasons – #868

In Bains and 10031670 Manitoba Ltd. v. Tworek et al, 2024 MBKB 111, the Court dismissed a motion to stay two court proceedings in favour of arbitration. In doing so, the Court ran afoul of some settled principles in Canadian (and international) arbitration law. These include interpreting the scope of the arbitration agreements, the test for a stay of proceedings in favour of arbitration, the separability presumption and concerns over inefficiency and multiplicity of proceedings where the dispute concerns both signatories and non-signatories to the arbitration agreement.

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”.