In Borschel v. Borschel, 2020 ONSC 4395, Mr. Justice Lorne Sossin issued an anti-suit injunction restraining a party to arbitration awards subject to Ontario law from pursuing parallel proceedings in a U.S. jurisdiction. Sossin J. also dismissed arguments challenging enforcement of the awards based on legislative provisions requiring parties to sign any agreement reached as part of the court process. Sossin J. held that the provisions did not serve to invalidate awards which had issued on consent and where consent of the parties had been communicated by counsel.
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In HQIC and Circlemed Inc. v. Hamdani, 2020 ONSC 3403, Madam Justice Cynthia Petersen considered allegations made by clients against their former counsel of record in an arbitration and the negotiations which resolved the arbitration. Though her reasons focus on whether the record was sufficient/appropriate to allow her to grant summary judgment (no, it was not), Petersen J.’s analysis disclosed certain risks inherent for counsel in commercial arbitration when (i) stepping into a new brief and (ii) responding post-resolution to a client’s alleged dissatisfaction over the conduct and settlement of the arbitration. The record also highlights the opportunities for preliminary skirmishing created by inserting procedural options into an agreement to arbitrate which can be triggered merely by how either party frames its action.
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In awarding costs on a substantial indemnity basis in Ndrive v. Zhou, 2020 ONSC 4568, Mr. Justice John R. McCarthy drew attention to a defendant’s conduct which “unnecessarily extended and complicated” Mareva injunction proceedings in which arbitral award funds were the “core of the dispute between the parties”. McCarthy J. underlined the importance of Mareva injunctions as a tool in civil litigation “to address the problem posed when a defendant utilizes the time lag between a claim being prosecuted and a plaintiff’s attainment and execution upon a judgment to divest itself of assets which would otherwise be available to satisfy that judgment in whole or in part”. Also, see notes regarding an arbitrator’s jurisdiction under the Arbitration Act, 1991, SO 1991, c 17 to issue ex parte preservation orders against arbitral parties and an arbitrator’s lack of jurisdiction to issue Mareva injunctions against non-parties.
Continue reading “Ontario – Mareva injunction and increased costs ordered where arbitral award funds were core of dispute – #363”Ontario – states’ legal submissions can qualify as “subsequent practice” in investor-state arbitration – #360
In The United Mexican States v. Burr, 2020 ONSC 2376, Madam Justice Bernadette Dietrich accepted that legal submissions by parties to the North America Free Trade Agreement Between the Government of Canada, the Government of Mexico and the Government of the United States, 17 December 1992, Can TS 1994 No 2 can qualify as “subsequent practice” under article 31(3) of the Vienna Convention on the Law of Treaties Can TS 1980 No 37 but that the facts fell short of meeting the standard in Mexico v. Cargill, Incorporated, 2011 ONCA 622 of a “clear, well-understood, agreed common position”. Dietrich J. also distinguished between an objection to jurisdiction which relates to the authority of a tribunal to hear a dispute and an objection to admissibility which refers to the characteristics of the claim, determining that she had jurisdiction to review the former but not the latter. She dismissed a challenge to an award on jurisdiction in which the tribunal found that investors had properly given notice of their intention to arbitrate by filing powers of attorneys authorizing legal counsel to initiate arbitration and to act on their behalf. Dietrich J. held that non-compliance with the formal requirements of Articles 1119 did not vitiate the state’s consent to arbitrate under Article 1122(1).
update – August 18, 2020 Notice of Appeal filed August 24, 2020 by The United Mexican States. See notes for grounds of appeal.
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In Magotiaux v. Stanton, 2020 ONSC 4049, Madam Justice Jennifer Mackinnon denied to stay court proceedings, having determined that the parties’ otherwise detailed agreement to arbitrate was subject to, but did not comply with all of, certain formal requirements required by the Family Law Act, RSO 1990, c F.3 and the Family Arbitration, O Reg 134/07, the sole regulation made to the Arbitration Act, 1991, SO 1991, c 17. Mackinnon J. recognized that courts can imply terms into a contract following the approach in Pacific Hotels Ltd. v. Bank of Montreal, 1987 CanLII 55 (SCC) but, where legislation has mandated express terms, courts cannot imply terms to produce a binding agreement to arbitrate compliant with that legislation.
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In Hristovski v. Hristovski, 2020 ONSC 4021, Madam Justice Francine Van Melle held she had no jurisdiction to hear an appeal of an arbitrator’s pre-merits hearing denial of further document disclosure. Despite use of the term “award” to title the decision, Van Melle J. determined that the denial was an interim procedural order. Unlike an award which disposes of disputes between parties, the order was not eligible for appeal, being “immune from review” under the Arbitration Act, 1991, SO 1991, c 17. Van Melle J.’s reasons do not assert that interim decisions cannot later be challenged when appealing the final award if an interim decision impacts on the result. As neither party argued whether leave had to be sought/obtained, Van Melle J. made no comment on the issue.
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In Cricket Canada v. Alberta Cricket Council, 2020 ONSC 3776, Mr. Justice Markus Koehnen upheld an arbitrator’s determination that she had jurisdiction over both the complainant and the dispute, consistent with not only the applicable dispute resolution rules but also the administering institution’s enabling legislation. Koehnen J. held that the arbitrator had not taken it upon herself the power to determine membership in a private corporation, had not undertaken any corporate reorganization or attempted any unjustified removal of a right to self-determine membership. Rather, the arbitrator was correct in her determination that claimant’s status and the nature of the dispute fell within her jurisdiction and that of the administering institution which adopted the dispute resolution rules.
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Still seized of the appointment process following his earlier decision to refer the parties to arbitration, Mr. Justice Jonathan Dawe in King Valley Estates Inc. v. Wong et al., 2020 ONSC 3950 accepted to grant Defendants’ application to appoint a candidate initially proposed, but now resisted, by Plaintiff. Despite months of opportunity and diligent efforts by Defendants, the parties returned before Dawe J. each proposing that the other’s candidate be named. Both candidates were “eminently qualified”, acceptable to both parties and not under “any disqualifying conflict”. Due to advantages perceived by Plaintiff’s candidate’s lower rate and cap on fees, Dawe J. expressed readiness to appoint that candidate at Defendants’ request subject to (i) re-confirmation of his interest and (ii) a schedule acceptable to Defendants.
Continue reading “Ontario – each party argues to have the other party’s candidate appointed arbitrator instead of their own – #345”Supreme Court – courts should not refer jurisdiction challenge to arbitrator if real prospect that challenge might never be resolved – #344
In Uber Technologies Inc. v. Heller, 2020 SCC 16, the Supreme Court of Canada introduced a third exception to its general rule that jurisdiction challenges should be referred first to the arbitrator. The exception contemplates scenarios in which validity of the arbitration agreement might not be determined if arbitration is too costly or inaccessible due to costs, distance or even a choice of law clause circumventing mandatory local policy. Staying an action in favour of arbitration would deny relief for claims made under the agreement and insulate disputes from resolution. The Court also asserted that unconscionability involves both inequality and improvidence but does not require intention. The Court further confirmed that employment disputes are not “commercial” for the purpose of the International Commercial Arbitration Act, RSO 1990, c I.9.
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In Travelers Insurance Company of Canada v. CAA Insurance Company, 2020 ONCA 382, Ontario’s Court of Appeal set aside an award which issued following a statutory arbitration because the Ontario statute did not apply to the defendant. The Court questioned how did Ontario statutory accident benefits for a Nunavut accident come to be arbitrated under Ontario’s Insurance Act, RSO 1990, c I.8 if that legislation’s priority rules only apply if both insurers are subject to those rules. The Court identified as a “serious” error the arbitrator’s determination that the Insurance Act applied to the defendant insurer. Despite that error, the Court is silent on (i) how/when parties can consent by contract to submit to statutory arbitration under a statute which does not apply to one of them and (ii) why apply the standard of review applicable to statutory arbitrations, recently restated in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, to an appeal from a consensual arbitration.
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