Jurisdiction Issues Archives - Arbitration Matters

March 15, 2023March 9, 2023

Ontario – no jurisdiction over dispute not properly raised in arbitration – #720

In EBC Inc. v. City of Ottawa, the parties’ primary construction contract contained a multi-tier dispute resolution clause that provided for notice, negotiation, mediation, and arbitration. The parties also negotiated an agreement that contained a Claims Process applicable to disputes between them that provided for the exchange of documentation, negotiation, mediation and arbitration. The parties followed the Claims Process and proceeded to arbitration on a number of issues consisting of a jurisdiction motion and then three arbitral phases. As part of the jurisdiction motion the Arbitrator held that the arbitration could only address claims that had been advanced prior to September 2018. After completion of the arbitration, EBC brought an application for payment of money from the Respondent City, which was an issue that had not been raised in the Claims Process. Justice P. J. Boucher rejected EBC’s application on the basis that as the dispute arose after September, 2018, it should have been raised using the dispute resolution process in the Contract, and not before the court.

March 2, 2023February 23, 2023

Québec – Class Actions: rules for referral to arbitration should be followed – #717

In Vidéotron c. 9238-0831 Québec inc. (Caféier-Boustifo), 2023 QCCA 110, the Court of Appeal dismissed Vidéotron’s appeal and confirmed Justice Lussier’s first instance judgement dismissing Vidéotron’s request to limit the definition of the plaintiff group in a class action to only those customers whose contracts do not contain an arbitration clause. After the application for authorization was filed but before it was decided, Vidéotron amended its contracts with all new customers so that they contained an arbitration clause. Almost three years later, it sought to change the definition of the plaintiff group so that it included only those customers with contracts that pre-dated the amendment to include an arbitration clause. Justice Lussier found that Vidéotron was out of time. The Court of Appeal confirmed that section 622 CCP and its 45-day limit for an application for referral to arbitration are applicable to class action proceedings as well as to any other proceedings. Even if this limit is not de rigueur, the party asking for referral to arbitration has the burden of proof to justify any added delay. The Court of Appeal also reaffirmed that, based on an arbitration clause, the motion to request a modification to a plaintiff group in a class action is equivalent to a jurisdiction challenge. The Court of Appeal confirmed Justice Lussier’s ruling that Vidéotron did not meet its burden of proof to justify its delay to file its application to change the definition of the plaintiff class.

February 14, 2023March 17, 2023

Québec – Court rejects foreign state immunity to award enforcement – #710

In CC/Devas (Mauritius) Ltd v. Republic of India, 2022 QCCS 4785, Justice Pinsonnault rejected the Republic of India’s effort to invoke state immunity in response to an application seeking the recognition and enforcement of two investment treaty awards. He found that the Plaintiffs had met their burden to prove that (1) the commercial activities exception applied, and (2) India had waived state immunity to enforcement proceedings.

February 1, 2023January 26, 2023

Ontario – Set-aside application can’t bootstrap appeal– #707

In Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861, a unanimous Ontario Court of Appeal found the Superior Court committed multiple errors in its review of three arbitral awards under s. 45 and s. 46 of the Arbitration Act, 1991, S.O. 1991, c. 17 (AA). The Court saw no extricable errors of law capable of appeal, only unreviewable findings of mixed fact and law. The Court also identified no breaches of procedural fairness justifying a set aside of the awards. The decision provides important instructions for curial review of arbitral awards, including:

January 16, 2023March 13, 2023

Liz’s 2022 Hot Topic: Treatment of arbitration agreements in 2022 – #703

My hot topic for 2022 is the treatment of arbitration agreements by the courts. Frequently, challenges to arbitral jurisdiction and appeals are brought on the basis of the scope and enforceability of an arbitration agreement. A review of a number of cases within the last year indicates a trend that a strongly, and often broadly drafted agreements are frequently the difference between a successful and unsuccessful court challenge. This case note will review a number of notable cases we have seen this past year.

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 19, 2022December 15, 2022

Ontario – High threshold to set aside international award for damages not met – #694

In Clayton v. Attorney General of Canada, 2022 ONSC 6583, Justice Akbarali rejected an attempt to set aside a damages award made by a three-member tribunal (the “Tribunal”) originally constituted under Chapter 11 of the North American Free Trade Agreement (“NAFTA”). The applicants argued that the Tribunal had exceeded its jurisdiction in respect of the legal standard to be applied, breached procedural fairness by refusing to admit certain expert evidence, and rendered an award that was contrary to public policy. Citing previous jurisprudence on the high thresholds to be met for each of these grounds to succeed – thresholds consistent with deference to arbitral tribunals, – Justice Akbarali found no errors had be committed. She dismissed the application.

December 16, 2022December 15, 2022

Ontario – Participation in litigation beyond pleadings waives arbitration agreement – #693

In Azam v Multani Custom Homes Ltd., 2022 ONSC 6536, Justice Chang denied the defendant’s application to stay litigation under section 7 of the Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) upon finding the defendant unduly delayed bringing the application for a stay, after having actively participated in many steps to advance the litigation over a 16-month period, with the effect that the defendant had abandoned its rights to rely upon the arbitration clause and it was therefore invalid.

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.

December 2, 2022December 1, 2022

Ontario – Narrow basis for excess jurisdiction set aside challenges reaffirmed – #688

In Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, 2022 ONCA 769, the Ontario Court of Appeal overturned a Superior Court set aside decision and restored an arbitral award. The Court reiterated and underscored directives from Alectra Utilities Corporation v. Solar Power Network Inc., 19 ONCA 254: There is a narrow basis for set aside challenges to arbitral awards on the ground of alleged excess of jurisdiction. Review of the substance of the arbitral award is not authorized. The correctness or reasonableness of the arbitrator’s decision is irrelevant. Set aside is not an appeal.