Tag: Jurisdiction Issues

Posted on

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.

Continue reading “International – Agreement to Arbitration and Enforcement Jurisdiction a Package – #891”
Posted on

Ontario – Appeal prohibition applies beyond limits of arbitral appointment applications – #889

In Toronto Standard Condominium Corporation No. 2299 v Distillery SE Development Corp., 2024 ONCA 712, the Court held that there could be no appeal from an order appointing an arbitrator, even though the order did not explicitly indicate that it was made pursuant to s. 10 of the Arbitration Act, 1991, SO 1991, c 17. Section 10(1) provides that the court may appoint an arbitrator on a party’s application if, for example, the arbitration agreement provides no appointment procedure. Pursuant to s. 10(2), there is no appeal from the court’s appointment. Here, the application for an order appointing an arbitrator did not refer to s. 10 of the Arbitration Act but did refer to Rule 14.05 of Ontario’s Rules of Civil Procedure, RRO 1990, Reg 194 (the general rule pertaining to applications and what types of relief may be sought by application, including a determination of rights under a contract). This reference to Rule 14.05 did not engage s. 6 of the Ontario Courts of Justice Act, RSO 1990, c C.43, which sets out the matters over which the Court of Appeal has jurisdiction and provides for an appeal as of right in respect of most final orders of Superior Court judges. The appeal of the appointment order was quashed based on the appeal prohibition in s. 10(2) of the Arbitration Act.

Continue reading “Ontario – Appeal prohibition applies beyond limits of arbitral appointment applications – #889”
Posted on

B.C. – Arbitrator Properly Appointed Despite No Signed Agreement – #881

In Pomerleau Inc. v 4HD Construction Ltd., 2024 BCSC 1973, the Court addressed two petitions. The first, by 4HD (the claimant/respondent by counterclaim in the arbitration), sought a ruling that the arbitrator had not, in fact, been appointed and declaring the award to be void or, alternatively, an order that the arbitrator be removed as arbitrator and the award set aside on the basis of a reasonable apprehension of bias. The second, by Pomerleau (the respondent/counterclaimant in the arbitration), sought recognition and enforcement of the award. The Court dismissed the first petition and granted the second. The arbitrator ruled that he had been appointed based on an email sent to him by 4HD advising him that he had been jointly selected as arbitrator and the had parties participated in the arbitration, even though no arbitration agreement was ever signed. The arbitrator issued an award dismissing the claims based on the claimant’s failure to prosecute the arbitration. The Court found that the arbitrator was correct that he had been properly appointed. The fact that the arbitrator was owed outstanding fees (only a few thousand dollars) by the claimant at the time he ruled on his appointment was insufficient to give rise to a reasonable apprehension of bias to justify setting aside the award.

Continue reading “B.C. – Arbitrator Properly Appointed Despite No Signed Agreement – #881”
Posted on

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.

Continue reading “Québec – Peace River not considered where referral to arbitration sought under LACC/CCAA – #877”
Posted on

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.

Continue reading “Ontario – Alleged error in applying the law not a jurisdiction issue – #865”
Posted on

Ontario – Arbitrator jurisdiction – dispute arose from Consent Order after earlier arbitration – #863

In The Joseph Lebovic Charitable Foundation, The Dr. Wolf Lebovic Charitable Foundation, the Estate of Joseph Lebovic and Wolf Lebovic v Jewish Foundation of Greater Toronto and Joseph and Wolf Lebovic Jewish Community Campus, 2024 ONSC 4400, the Court upheld the arbitrator’s order that he had jurisdiction over the parties’ dispute that arose after a Consent Order made in an earlier arbitration. The parties’ first dispute fell within the scope of the arbitration clause in their agreement. They settled that dispute and the arbitrator issued a Consent Order that contained a term that referred, “any disputes regarding the matters referred to in this Order” back to him for resolution.  A second arbitration did not proceed. The same arbitrator was appointed to decide the issues in dispute in a third arbitration. The respondents in the arbitration (“Lebovic”) argued that the arbitrator did not have jurisdiction because the issues raised were grounded in the Consent Order and not in the agreement that contained the arbitration clause.  The arbitrator decided that he had jurisdiction, in part, because: (1) resolving this third dispute would necessarily involve factual consideration of the contract terms, and obligations and conduct of the parties under both the parties’ agreement and the Consent Order; and (2) the issues raised by Lebovic were all grounded in rights and obligations which were initiated by the terms of their agreement. Lebovic maintained their objection and applied to the Court under section 17(8) of the Ontario Arbitration Act, 1991, SO 1991, c. 17, “to decide the matter”. The focus of this case note is the arbitrator’s decision, because the application was decided on the basis of waiver.

Continue reading “Ontario – Arbitrator jurisdiction – dispute arose from Consent Order after earlier arbitration – #863”
Posted on

Québec – Court finds separate arbitration agreement, despite arbitration clause in contract – #857

In Roxboro Excavation Inc. v. Delsan-AIM Environmental Services Inc., 2024 QCCS 2331 the Court declined to hear a dispute between the Applicant, Roxboro Excavation Inc.  (“Roxboro”), and the Defendant, Les Services environnementales Delsan-A.I.M. Inc. (“Delsan”),  on the grounds that it lacked jurisdiction because the parties had agreed to submit the matter to arbitration. Even though the subject contract included an arbitration clause, the Court did not interpret the clause or otherwise consider whether that clause required the parties to arbitrate the disputes. The Court instead focussed its analysis and decision on a separate agreement the parties had negotiated to resolve their disputes by arbitration and not in court.

Continue reading “Québec – Court finds separate arbitration agreement, despite arbitration clause in contract – #857”
Posted on

Québec – Any competent court can issue interim measures regardless of arbitral seat – #854

In GlobeAir Holding GmbH c. Pratt & Whitney Canada Corp., 2024 QCCS 2451, the Court referred a claim to arbitration and, despite confirming its jurisdiction to do so, refused to issue interim measures. The Plaintiffs had argued that the claim, based in statute rather than contractual obligations, fell outside the scope of the arbitration clause, but the Court drew on the broad language of the clause to find otherwise. Then, after confirming that the Court  had jurisdiction to issue interim measures even though the dispute was referred to arbitration seated in Ontario, it concluded that no prima facie case could be made to grant Plaintiffs’ request.

Continue reading “Québec – Any competent court can issue interim measures regardless of arbitral seat – #854”