International Archives - Page 5 of 5

January 12, 2022May 4, 2022

Ontario – Fresh evidence test the same on set aside applications on fairness grounds and judicial review applications – #572

In Vento Motorcycles Inc. v United Mexican States, 2021 ONSC 7913, Justice Vermette set out the test for when fresh evidence may be adduced to support a set aside application on lack of fairness or natural justice grounds. The test is the same as that which applies on a judicial review; the record is restricted to what was before the decision-maker, except where there are natural justice or fairness issues raised that cannot be proven by reference to the existing record and that could not have been raised before the decision-maker.

January 7, 2022May 4, 2022

Myriam’s 2021 Top Pick: B.C. – lululemon athletica inc. v. Industrial Color Productions Inc. – #571

Famed Canadian athletic wear company lululemon athletica generated a noteworthy court decision this year, which has nothing to do with the controversy surrounding the sartorial choices it has made in designing Team Canada’s (very red!) uniform for the Beijing Olympics. Rather, the case adds to the significant number of decisions rendered of late in which the courts have grappled with their role – and the tests they must apply – when an application to set aside an international arbitral award comes before them under the UNCITRAL Model Law on International Commercial Arbitration (for a deep dive on this topic, see Lisa’s top pick, Russian Federation v. Luxtona Limited).

January 6, 2022May 4, 2022

Liz’s 2021 Top Pick: Ontario – CUSO International v. Pan American Development Foundation 2021 ONSC 3101 – #570

This case is my top pick as the facts and issues between the parties serve to highlight the value of the arbitration process, including characteristics related to enforceability, neutral forum, party autonomy, confidentiality and arbitrator selection. It also shows how these matters can deliver tangible benefits to parties.

January 4, 2022May 4, 2022

Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 2) – #568

In Part 1 (case update #564), I reviewed the decision of Russian Federation v Luxtona Limited, 2018 ONSC 2419, 2019 ONSC 7558, and 2021 ONSC 4604 on the standard of review to be applied on an application to the court pursuant to Model Law Article 16(3) “to decide the matter” where the tribunal has decided jurisdiction “as a preliminary question” and what evidence is admissible on such an application. In this, Part 2, I discuss the interplay between Articles 16(3) and Art 34(2)(a)(iii). So far as I have been able to determine, this issue does not seem to have been categorically resolved anywhere under the Model Law.

December 16, 2021May 4, 2022

Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 1) – #564

A review of the 2021 case law shows that the appropriate standard of review of an arbitral award remains uncertain. Russian Federation v Luxtona Limited is interesting because it did not involve an appeal of an arbitral award or a set-aside application, in respect of which there are many court decisions. It considered the standard of review by a court where a tribunal has ruled “as a preliminary question” that it has jurisdiction pursuant to Article 16(3) of the Model Law. It provides that following such a determination by the tribunal, any party may apply to the court to “decide the matter”, which decision shall not be subject to appeal. Comparable provisions also appear in domestic legislation. The question is the role of the reviewing court asked to “decide the matter”. Confusion exists as to whether such a hearing is a “review” or hearing de novo and whether that determination has any bearing upon the standard of review of the arbitral tribunal’s preliminary jurisdiction determination.

December 6, 2021May 4, 2022

BC – Franchisor addresses Uber arbitration agreement flaws to obtain stay of proceedings – #560

In Kang v Advanced Fresh Concepts Franchise Corp., 2021 BCPC 262, Small Claims Court Judge S. Archer granted a motion to stay an action in favour of arbitration under either section 8 of the International Commercial Arbitration Act, R.S.B.C. 1996 c.233 or, in the alternative, section 7 of the B.C. Arbitration Act, S.B.C. 2020, c.2. Judge Archer concluded that the international Act applied because the parties, at the time of their agreement, had their places of business in different countries, but that it didn’t matter because the test for a stay was essentially the same. Moreover, she distinguished the facts from those in Uber Technologies Inc. v Heller, 2020 SCC 16; the arbitration agreement was not unconscionable because the income earned by the claimant franchisee was “significant” as compared with the cost to commence an arbitration under the ICDR Rules.

November 23, 2021May 4, 2022

BC – correctness standard of review applies on set aside applications on jurisdiction grounds – #555

In lululemon athletica canada inc. v Industrial Color Productions Inc., 2021 BCCA 428, Justice Marchand, for the British Columbia Court of Appeal, dismissed lululemon’s appeal of the chambers judge’s dismissal of its application to set aside the arbitrator’s award made in favour of Industrial Color Productions (“ICP”). The issue was whether the arbitrator had acted outside his jurisdiction in awarding ICP damages that lululemon argued were never claimed in the pleading. Justice Marchand found that the chambers judge had applied the wrong standard of review – the standard of review is correctness and United Mexican States v Cargill, 2011 ONCA 622 remains the leading case on the standard of review for set aside applications on matters of jurisdiction. Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 and Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 were not helpful in this context. However, Justice Marchand found that the chambers judge’s decision to dismiss the set aside application was correct; the arbitrator did not stray outside the scope of the submission to arbitration when the impugned pleading was read generously.

August 19, 2021May 4, 2022

B.C. – Scope/excess of authority when arbitrator considers variation of award made based upon incorrect facts – #523

In Marchetti v Lane, 2021 BCSC 1259, Justice Tucker dismissed an application brought by the respondent (Lane) to “change or set aside” an arbitral award under s. 19.18 of the Family Law Act, S.B.C. 2011, c. 25. The case has application to commercial arbitration awards and, indeed Justice Tucker looked to the set aside provisions of the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 (“ICAA”) to determine whether the award should be set aside on jurisdictional grounds. Lane argued, among other things, that the arbitrator had acted outside the scope of the submission to arbitration and outside her authority in varying an earlier “final” award. He argued that the arbitrator had previously declined to clarify or correct the initial award, so it was final and binding upon the parties and subject only to the statutory right of appeal. The parties had agreed to have all their issues in dispute resolved by arbitration and the award which was the subject of this application related merely to one issue. After considering s. 34 of the ICAA, Justice Tucker found that the first award had been based upon facts that turned out not to have been correct and was therefore incapable of being implemented. In varying that award, the arbitrator did not “purport to correct or clarify the award, but determined the application to vary brought before her while her jurisdiction over the matter remained extant under the terms of the submission to arbitration and the applicable statute”.

August 13, 2021May 4, 2022

Ontario – Party’s conduct in suing in foreign jurisdiction constituted “strong cause” why arbitration clause should not be enforced under ONCA Novatrax principles – #519

In CSI Toronto Car Systems Installations Ltd. v Pittasoft Co., Ltd., 2021 ONSC 5117, Justice Mohan D. Sharma dismissed a motion by Pittasoft for a stay of CSI’s Ontario action in favour of arbitration on the grounds that: (1) under Article 8(1) of the Model Law, the arbitration agreement was “null and void, inoperative or incapable of being performed” because Pittasoft was estopped by its own conduct from relying upon it and also that Pittasoft had brought its stay motion too late; and (2) these findings constituted “strong cause” why the arbitration clause should not be enforced in accordance with the principles articulated by the Ontario Court of Appeal in Novatrax International Inc. v Hagele Landtechnik GmbH, 2016 ONCA 771 , that apply “when a litigant seeks to displace a forum selection clause agreed upon in a commercial contract”.

July 22, 2021May 4, 2022

Ontario – Court application under Model Law Art. 16(3) to “decide the matter” of the tribunal’s jurisdiction is a hearing de novo and not a “review” of the tribunal’s decision – #513

In Russian Federation v. Luxtona Limited, 2021 ONSC 4604, the Divisional Court heard an appeal by Russia of an interlocutory decision of Justice Penny of the Ontario Superior Court of Justice, Russia Federation v. Luxtona Limited, 2019 ONSC 7558. Justice Penny had declined to allow Russia to adduce fresh evidence on an application brought under Model Law Art. 16(3) to set aside an interim arbitral award finding that Russia had consented to arbitrate Luxtona’s claims and that the tribunal therefore had jurisdiction. The proposed fresh evidence related to the jurisdictional issue and had not been before the tribunal. The appeal turned on whether the application before Justice Penny was a “review” of the tribunal award on jurisdiction or a hearing de novo. The Divisional Court, in a decision written by Justice D.L. Corbett, held that Russia was entitled to adduce fresh evidence as of right because the application was a hearing de novo. The court relied upon two key decisions raised by the parties. Mexico v Cargill, 2011 ONCA 622 held that a set aside application brought in the Superior Court of Justice under Art. 34 of the Model Law is a “review” and not a hearing de novo, but in that case there was no challenge to the tribunal’s jurisdiction to hear and decide the dispute. Therefore, the Divisional Court was not bound by it. The English Supreme Court decision of Dallah v Pakistan, [2011] AC 763, held that the court’s role where one party took the position that it had not consented to the arbitration was “to reassess the issue [of jurisdiction] itself” and not to “review” the tribunal’s decision. The Divisional Court found that this approach is supported by the language in the Model Law and the weight of international authority and Art. 2A of the Model Law, which promotes the uniformity of the application of the Model Law internationally.