Jim Reflects (2023): Browne v Dunn is just a rule of fairness: a comment on the Vento case – #810

I’ll take Vento Motorcycles, Inc. v. United Mexican States 2023 ONSC 5964 (Vento) as my top pick for 2023. It’s a reminder that just because the strict rules of evidence may not apply in an arbitration doesn’t mean the rationale for some of those rules should be ignored. In this case, it was an alleged breach of the rule in Browne v Dunn, the very rule all Commonwealth litigators had beaten into their heads by their professors, their principals, or, for some of the less fortunate among us, a judge. At heart Browne v Dunn is about fairness, and ensuring fairness is a, perhaps the, cornerstone of arbitration.  

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Lindsay Reflects (2023): Enforcement of International Awards: The Procedural Fairness Exception – #808

In this commentary, I provide key takeaways for parties that seek to bring or oppose an application to enforce an international arbitration award in Canada. I focus on three decisions issued by the Ontario Superior Court of Justice in 2023: Costco Wholesale Corporation v TicketOps Corporation, 2023 ONSC 573 (“Costco”), Prospector PTE Ltd. v CGX Energy Inc, 2023 ONSC 4207 (“Prospector”), and Xiamen International Trade Group Co Ltd. v LinkGlobal Food inc., 2023 ONSC 6491 (“Xiamen”). What is the procedural fairness exception and how does it work?

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Quebec – Streamlined procedures do not deny party’s ability to its present case – #792

In Gagnon c. Truchon, 2023 QCCA 1053, the Quebec Court of Appeal declined leave to appeal the Superior Court’s earlier decision to dismiss an application to annul an award and instead to enforce it. The Court of Appeal concluded that the Applicants had failed to establish “questions of principle” arising out of a “purement privé” fee dispute between the Applicants and their former lawyer. After failing to object to streamlined procedures selected by the Arbitration Council appointed by the Bureau du Québec, the Applicants could not later complain that they were denied the opportunity to present their case.

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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. 

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International – Deliberation-related documents need not be produced, despite strong dissent – #766

In CZT v CZU, 2023 SGHCI 11, the Singapore International Commercial Court refused to order the arbitral tribunal to disclose deliberation-related documents in the context of a set-aside application under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) despite the dissenting arbitrator’s statement that he had “lost any and all trust in the impartiality of [his] fellow arbitrators.” The applicant relied upon Article 34(2), alleging that the majority had breached the rules of natural justice, had exceeded the terms or scope of the submission to arbitration, that the arbitral procedure was not in accordance with the parties’ agreement, and that the award conflicted with Singapore public policy. For the reasons set out below, this case has relevance to Canadian international arbitration practice.

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B.C. – No unfairness for procedural irregularity, no jurisdiction to review facts – #763

In Anins v. Anins, 2022 BCCA 441 (leave to appeal refused 2023 CanLII 64855 (SCC)), the Court of Appeal for British Columbia upheld a lower court decision dismissing a petition to set aside a family arbitral award based on errors of law and procedural unfairness. The Court of Appeal agreed with the B.C. Supreme Court that the Arbitrator did not cause any unfairness in failing to make a procedural direction in writing, nor were his reasons insufficient for omitting reference to certain statutory provisions. The Court of Appeal also agreed that the appellant’s grounds for appeal on the merits raised pure questions of fact. These were not appealable under B.C.’s then-applicable domestic arbitration statute.

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Ontario – No contracting out of the Model Law – #752

In EDE Capital Inc. v Guan, 2023 ONSC 3273, Justice Vermette dismissed a set-aside application on the basis that the applicant had failed to make out a breach of procedural fairness or lack of jurisdiction. In doing so, Justice Vermette also held that the applicable legislation in this case was the Model Law, despite the fact that the parties’ arbitration agreement referred to the domestic arbitration act. 

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Ontario – Arbitration procedurally unfair – arbitrator excluded material evidence despite no objection – #750

In Mattamy (Downsview) Limited v KSV Restructuring Inc. (Urbancorp), 2023 ONSC 3013, Justice Kimmel of the Ontario Superior Court of Justice (Commercial List) set aside an arbitral award for violating procedural fairness. She found the Arbitrator acted unfairly in declining to admit relevant evidence on a new issue he himself raised in the arbitration. This decision reminds us that an arbitral tribunal’s procedural discretion, though vast and powerful, is not absolute. 

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Ontario – No re-litigation when issues have already been fully arbitrated – #747

In Doria v. Warner Bros. Entertainment Canada inc., 2023 ONCA 321, the Court dismissed the appeal of a decision striking Appellant’s Statement of Claim on the ground that it was an abuse of process because it sought to relitigate issues that had already been fully arbitrated. The Court of Appeal confirmed Justice Koehnen’s decision, even though the Statement of Claim sought damages from third parties to the arbitration. Reviewing the application of section 139 (1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, the Court of Appeal confirmed that this section does not give the broad right to sue jointly liable parties separately. That provision states that where persons are jointly and severally liable in respect of the same cause of action, a judgment or release of one of them does not preclude judgment against any other in the same or a separate proceeding. In this case, the provision did not apply. The Appellant’s claim was fully heard, and the Appellant was compensated through the arbitration process and award. Section 139 does now allow for the re-litigation of issues against third parties because the claimant is not satisfied with the decision, whether the decision arose from arbitration or from a court.

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Ontario – No hearing de novo in case of challenge to procedural fairness – #742

In All Communications Networks of Canada v. Planet Energy Corp., 2023 ONCA 319, the Court dismissed the appeal of a judgment upholding an arbitral award in favour of Respondent All Communications Networks of Canada (“ACN”) in the amount of $29,259,787 and made an order enforcing the award. In first instance, Planet Energy Corp. (“Planet”) sought to set aside the arbitral award based on the failure of due process, arguing: (1) that it was not given the opportunity to present its case; and (2) that the Arbitrator’s ruling violated public policy. Before the Court of Appeal, Appellant Planet raised the additional argument that the first instance judge failed to apply the right standard of review. Planet argued that a de novo hearing was required to examine properly the arguments raised against the arbitral award. The Court of Appeal dismissed Planet’s arguments and confirmed that a party seeking to set aside an arbitral award based on a failure of due process must prove that the Arbitrator’s conduct is serious enough to dismiss the application to enforce the award under the law of the enforcing State (here, Ontario). The Court of Appeal also confirmed that a party seeking to set aside an award based on a violation of public policy shall demonstrate that the award offends Ontario’s principles of justice and fairness in a fundamental way.

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