Ontario Archives - Page 2 of 29 - Arbitration Matters

October 27, 2023October 30, 2023

Ontario – Court defines arbitral record where arbitration not recorded – #787

In Reed v. Cooper-Gordon Ltd. et al, 2023 ONSC 5261, the Court granted in part the plaintiff’s motion for leave to appeal an employment and shareholder related arbitral award on a question of law under s. 45 of the Arbitration Act, 1991. The plaintiff’s claims were originally raised by way of action, then proceeded by arbitration. The plaintiff/claimant in the arbitration claimed, among other things, that the arbitrator had wrongly determined the notice period for pay in lieu of notice, overlooked certain claims for unpaid bonuses and RRSP contributions, and incorrectly valued his shares in the underlying arbitration relating to his exit from the defendant. The Court held that the arbitrator’s error in computing the notice period and his lack of reasons relating to certain claims justified granting leave to appeal. The Court denied leave on the remaining issues. Because the parties had not recorded the arbitration, the record was limited to pleadings filed in the Superior Court of Justice that defined the issues for arbitration, the parties’ arbitration agreement, the Arbitration Award and Costs Award, the shareholders’ agreement and the parties’ Partial Minutes of Settlement on a particular issue.

October 12, 2023October 10, 2023

Ontario – A pathological med-arb clause – #781

Stothers v Kazeks, 2023 ONSC 5021 is a perfect example of the confusion about the med-arb process that I covered in my last case note: Med-arb process was “fundamentally flawed” – #775. If you want to skip to the language of the pathological so-called med-arb clause without the factual background in this case, just scroll down to just above the Editor’s Notes section.

October 10, 2023October 13, 2023

Ontario – Arbitral tribunal lacks power to order third-party discovery – #779

In Link 427 General Partnership v. His Majesty the King, 2023 ONSC 2433, the Court refused to enforce an arbitrator’s interim procedural order purporting to compel third-party discovery. This decision highlights the limits of an arbitral tribunal’s procedural authority over strangers to the arbitration agreement, the complexities of which I highlight in my Contributor’s Notes below.

October 1, 2023October 2, 2023

Ontario – High bar to oppose enforcement of international arbitral award – #777

In Prospector PTE Ltd v CGX Energy Inc, 2023 ONSC 4207, the Court considered an application by Prospector PTE Ltd. (“Prospector”) for the enforcement of an international arbitration award issued in an ICC arbitration. Prospector brought the application pursuant to the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sched 5 (“ICAA”), which incorporates the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). CGX Energy Inc. (“CGX”) opposed the application based on the procedural fairness exception in Article 34(2)(ii)(a) of the Model Law. CGX argued that it was denied the opportunity to fully present its case. However, based on the arbitral award, CGX failed to adduce sufficient evidence to prove its counterclaim. The Court granted the enforcement application. Prospector, together with the Ontario Court of Appeal decision in Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, leave to appeal to the SCC refused, 2018 CanLII 99661 (“Consolidated Contractors”), make clear that the procedural fairness exception in Article 34(2)(ii)(a) is very narrow. A court is not likely to intervene for process or public policy reasons unless the conduct or decision of the tribunal offends the principals of justice and fairness in a fundamental way.

October 1, 2023October 1, 2023

Ontario – Arbitrator to decide whether non-signatories are bound to arbitrate – #776

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.

August 29, 2023August 28, 2023

Ontario – Stay granted: tort claims were in “pith and substance” contractual – #768

In Spasiw et al v. Quality Green Inc. et al, 2023 ONSC 4422, the Court granted the defendants’ motion to stay the action in favour of arbitration in the context of a shareholders dispute. The plaintiffs’ claims of fraudulent misrepresentation and oppression were “closely connected with and related to” the parties’ share purchase agreement and shareholders agreement and in “pith and substance” contractual.. Accordingly, the claims fell within the broad scope of the arbitration clauses contained in the parties’ two agreements.

August 28, 2023August 28, 2023

Ontario –Arbitration Costs Payable Despite Application to Set Aside the Award – #767

In The Canada Soccer Association Incorporated v. Association de Soccer de Brossard, 2023 ONSC 4317, the Court held that the arbitrator’s cost decision was part of the arbitral final award, that a judgment enforcing the award extends to the decision on costs and that the winning party is entitled to the payment of its costs despite the losing party’s pending application to set aside the award, unless it obtains an interim order to the contrary. Rule 63.01 of the Ontario Rules of Civil Procedure, RRO 1990, Reg 194, which applies to appeals, does not apply – by analogy – to stay the costs order made as part of an award.

August 3, 2023August 1, 2023

Ontario – Title of proceedings may be amended in recognition and enforcement proceeding – #760

IC2 Fund v Wires, 2023 ONSC 3879 addresses: (1) whether it is appropriate for a party seeking to enforce an international arbitral award to correct the title of proceedings in an enforcement proceeding where both abbreviated and formal names were used interchangeably in the arbitration; (2) whether an applicant using an abbreviated name has standing; and (3) whether a party resisting enforcement can do so on the basis of an arbitrator’s alleged partiality after such allegations were addressed in the arbitration, which decision was not challenged. Here, the applicant (the respondent in the arbitration) brought an application to enforce an arbitral award (the “Award”) relating to its costs of the arbitration. In the title of proceedings in the notice of application, the applicant used an abbreviated corporate name. In the absence of confusion around the party’s identity, including because the respondent (the applicant in the arbitration) had used both the formal and abbreviated names, the court granted leave to amend the notice of application to reflect the full corporate name and resolved the standing issue on the same basis. The court also recognized the Award, rejecting the allegations of partiality of the arbitrator. The respondent had previously made allegations in the arbitration about the arbitrator’s lack of impartiality, which were rejected. The respondent did not challenge this decision.

August 1, 2023August 1, 2023

Ontario – Courts will also enforce agreements in favour of court proceedings – #758

In Eurofins Experchem Laboratories, Inc. v BevCanna Operating Corp., 2023 ONSC 4015, the Court dismissed an application by Defendant BevCanna Operating Corp (“BevCanna”) for a permanent stay of the action or alternatively, a permanent stay of any claims caught by the arbitration clause in the agreement between BevCanna and the Plaintiff, Eurofins Experchem Laboratories, Inc. (“Eurofins”). The Court found that Eurofins’s claim sought recovery of unpaid fees under the parties’ contract, even though it also included claims for breach of fiduciary duty and unjust enrichment. Claims for unpaid fees fell within an exception to the mandatory arbitration clause. It permitted (but did not require) claims for unpaid fees to be brought in the courts. In reaching this conclusion, the Court considered whether the essential character, or pith and substance of the dispute, was covered by the arbitration clause. This focus ensures that parties are held to their agreement and avoids attempts by clever counsel to plead their way around an arbitration clause.

July 20, 2023July 17, 2023

Ontario – When is an appeal of a stay decision barred? – #757

In Leon v Dealnet Capital Corporation, 2023 ONSC 3657, the Appellant, John Leon, appealed an order that stayed his action for breach of an employment contract in favour of arbitration, pursuant to section 7(1) of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 (“Arbitration Act”). Section 7(6) of the Arbitration Act provides that there is no appeal from stay decisions under section 7. However, the Appellant argued that section 7(6) did not apply in this case based on the recent decision of Goberdan v. Knights of Columbus, 2023 ONCA 327 (“Goberdan”) and the line of cases cited therein. Those cases stand for the proposition that if there is no arbitration agreement, the Arbitration Act does not apply and section 7(6) does not bar an appeal. In Goberdan, the motions judge concluded that there was no arbitration agreement because there had been no consideration for the contracts and therefore no contracts. As there was no arbitration agreement, the Court of Appeal found that the Arbitration Act including section 7(6) did not apply to bar the appeal. Here, it was argued that section 7(6) did not apply because the employment agreement, and therefore the arbitration clause, were void ab initio because the contract contracted out of the Employment Standards Act, 2000, S.O. 2000 c. 41 (“ESA”) contrary to the Ontario Court of Appeal decision in Heller v. Uber Technologies Inc., 2019 ONCA 1 (“Heller CA”). Heller CA held, among other things, that an arbitration clause in an agreement between a presumed employer and employee was invalid as it constituted an illegal contracting out of the ESA.