notes on new arbitration cases in Canada
In Toronto Standard v Distillery SE, 2023 ONSC 5340, the Court upheld the parties’ agreement to appoint a specific arbitrator, and also determined that issues relating to the arbitrator’s jurisdiction and mandate, and the addition of a party, should be decided by the arbitrator and not the Court.
Continue reading “Ontario – Arbitrator to rule on own jurisdiction and addition of party – #791”
In Buffalo Point First Nation and Buffalo Point Development Corp Ltd v Buffalo Point Cottage Owners Association, Inc, 2023 MBKB 141, the Court confirmed its earlier decision on the motion for leave to appeal, in which it held that the correctness standard of appeal in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 (“Vavilov”) applies to review of private arbitration awards appealed under provincial arbitration legislation. The Court held that the arbitrator had erred because he exceeded the jurisdiction granted to him under the parties’ agreement. First, the arbitrator exceeded the jurisdiction to “implement” or “clarify” a Consent Award which the parties had entered into following an earlier dispute. Second, the arbitrator’s award constituted “a significant rewrite of the bargain (…) by introducing new concepts alien to the negotiated bargain”.
Continue reading “Manitoba – Awards set aside after arbitrator re-wrote parties’ bargain – #790”
In LAPP Corporation v. Alberta, 2023 ABKB 566, the Court overruled the arbitrator’s decision in which he found that he had no jurisdiction over the Government of Alberta. In a de novo hearing pursuant to s. 17(9) of the Alberta Arbitration Act, R.S.O. 2000, c. A-43, the Court concluded that Alberta was bound by the arbitration agreement included in an Investment Management Agreement (IMA) between three Alberta public pension plans (Funds) and Alberta Investment Management Corporation (AIMCo). AIMCo is a fully state-owned investment management services provider created by the Alberta Investment Management Corporation Act. The Act specifically provides in Section 3(1) that AIMCo “is for all purposes an agent of the Crown in right of Alberta and may exercise its power and perform its duties and functions only as an agent of the Crown in right of Alberta.” Considering the broad and all-inclusive scope of the provision, the Court found that, while acting within its powers, AIMCo was always acting as Alberta’s agent and never on its own behalf. Alberta, as disclosed principal, was bound by an agreement made by its agent, even though it was not a party to the arbitration agreement.
Continue reading “Alberta – Non-signatory principal bound by its agent’s arbitration agreement – #789”
In Dow Chemical Canada ULC v Nova Chemicals Corporation, 2023 ABCA 217, the Appellant Dow Chemical Canada ULC (“Dow”) obtained leave to appeal a decision of a lower court, which declined to make a declaration of invalidity of the arbitration or grant an injunction prohibiting the continuation of the arbitration pursuant to section Section 47 of the Arbitration Act, RSA 2000, c A-43. In Dow Chemical Canada ULC v Nova Chemicals Corporation, 2023 ABCA 262, a single judge of the Alberta Court of Appeal ordered a limited stay of the ongoing arbitration until a panel of the Court could decide the appeal. In that context, the judge found that “forensic prejudice” was sufficient to obtain the limited stay of arbitration. This referred not to prejudice to the applicant, but to the possibility that if Dow were correct that the arbitration were invalid, it might “embarrass the justice system” to allow the arbitration to proceed when it should not have.
Continue reading “Alberta –Stay of Arbitration Granted Where Potential For “Forensic Prejudice” – #785”
In Husky Oil Operations Limited v Technip Stone & Webster Process Technology Inc, 2023 ABKB 545, the issue before the Court was whether a third party beneficiary of a contract was bound by the contract’s arbitration clause in a dispute concerning the contractual warranties. The Court answered the question in the affirmative. While the plaintiff was not a party to the contract containing the arbitration clause, it was given rights to enforce certain warranties. Since the plaintiff chose to enforce its third party rights under the contract, it was bound by the contract’s arbitration clause. The plaintiff was required to arbitrate its warranty claims, which were time-barred, as the limitation period had expired. However, the plaintiff’s negligence claims were not arbitrable as they did not arise out of the contract and those claims, which were brought by way of action, were not affected by the expiry of the limitation period to arbitrate.
Continue reading “Alberta – Third party beneficiary of contract bound by arbitration clause – #784”
In ADREQ (CSD) Estrie c. Lavoie, 2023 QCCS 3372 [ADREQ], the Court found that under the principle of competence-competence, unless only questions of law are engaged, an arbitrator retains the right to make determinations as to its own jurisdiction at first instance. The competence-competence principle dictates that arbitrators are competent to determine their own jurisdiction. A jurisdictional decision does not become an “award”, even though the arbitrator heard evidence relating to the substance of the dispute before deciding that he lacked jurisdiction.
Continue reading “Québec – Arbitrator’s ruling on jurisdiction not an award – even if evidence heard – #782”
In We Care Community Operating Ltd. v Bhardwaj, 2023 ONSC 4747, the Court granted the Plaintiff’s motion to compel arbitration under a Co-Ownership Agreement that related to a development property in Toronto. The Court deferred to the arbitrator the question of whether certain corporate entities – which were not signatories to the Co-Ownership Agreement – were nonetheless bound by the arbitration agreement contained in it.
Continue reading “Ontario – Arbitrator to decide whether non-signatories are bound to arbitrate – #776”
This case note reports on a trilogy of case management decisions that arose in the context of an application by the Claimant under art. 632 of the Code of Civil Procedure, RLRQ, c C-25.01 (“CCP”) challenging a tribunal’s jurisdiction to determine claims brought by the Respondent, which the Claimant alleged were new claims made after numerous rounds of written submissions – and thus outside the tribunal’s jurisdiction – in a commercial arbitration relating to a lease agreement (the “Arbitration”). The key issues decided were: (1) a court conducts a hearing de novo when deciding an objection to a tribunal’s ruling on its own jurisdiction (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2103); (2) Claimant’s application for an interim stay of arbitral proceedings during the pendency of its jurisdictional challenge was denied (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 2098); and (3) the Court appointed a French amicus curiae with expertise in international law to assist it during the jurisdictional hearing, invoking the Court’s duty to abide by the uniformity principle in interpreting Québec legislation based on the Model Law (Hypertec Real Estate Inc c Equinix Canada Ltd, 2023 QCCS 3061).
Continue reading “Québec – “Uniformity principle” drives appointment of French amicus curiae to harmonize Québec law – #774”
In Export Development Canada v. Suncor Energy Inc., 2023 FC 1050, the Federal Court heard an application for an order appointing an arbitrator pursuant to an arbitration clause in a political risk insurance policy (the “Policy”). The Court made several findings on the five issues before it. Two of those findings are highlighted here, with the others addressed below. First, subsidiaries of one of the parties claimed they were improperly included in the arbitration – as they were not parties to the arbitration agreement – and therefore claimed the Court had no jurisdiction to appoint an arbitrator in a manner that would bind them. The Court rejected this and refused to preliminarily determine that jurisdictional issue, which was a matter for the arbitrator pursuant to the competence-competence principle. Second, the Court determined what criteria should apply to the selection of the sole arbitrator. The Court held that the criteria of independence and impartiality, among others, are not “threshold criteria” and would not necessarily disqualify a proposed arbitrator if not met. Rather, they are part of what the Court considers in exercising its discretion.
Continue reading “Federal – Independence/impartiality not essential criteria for arbitrator appointment? – #770”
The Superior Court of Québec in Mullen c. Nakisa inc., 2023 QCCS 2678 held that employees not party to an arbitration agreement should not be added as parties to an ongoing arbitration. There is no support for the proposition that all third parties that are in some way related to the signatory parties of an arbitration agreement should be bound by it. This decision on the merits follows the stay granted by the Superior Court in October 2021 (Mullen c. Nakisa inc., 2021 QCCS 4388), covered in Case Note Québec – Stay of arbitrator’s decision to add third parties, force them to meet timetable, and refusal to hear them without payment – #553.
Continue reading “Québec – Arbitrator wrong to extend arbitration agreement to include third-party employees – #769”