Québec – Attempt to circumvent ICC Tribunal order amounts to fraud (in Canada) – #834

In Eurobank Ergasias S.A. v. Bombardier inc., 2024 SCC 11, the Court held that a call on a bank guarantee in contravention of an order of an arbitral tribunal in a pending ICC arbitration amounted to fraud under Canadian law, such that the bank that issued a related counter-guarantee was required to refuse payment.

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Québec – No stay of arbitration without exceptional circumstances – #826

In McLaren Automotive Incorporated v. 9727272 Canada inc., 2024 QCCS 389, the Superior Court dismissed the application of McLaren Automotive Incorporated (“Applicant”) to stay the arbitration until the Superior Court had ruled on the merits of its applications: (1) to homologate the Arbitrator’s award concluding that he had no jurisdiction to act; and (2) to annul the arbitration appeal panel’s decision to overturn the arbitrator’s award on its own jurisdiction. The Judge reviewed the applicable criteria for a stay of the arbitration He concluded that exceptional circumstances are required to obtain a stay because of the respect that Courts must show toward arbitration agreements and the principle of limited interventions that the Court must follow in arbitrations. The Judge ruled that no such exceptional circumstances were demonstrated by the Applicant in the present case.  But the case is worth watching. The institutional rules under which the arbitration proceeded allowed for an appeal to a panel of arbitrators. The issue will be whether the appeal is permitted in Québec where, pursuant to section 648 CCP “an arbitration award may only be challenged by way of an application for annulment”.  There is no appeal right.

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Québec – Arbitral award with declaratory relief no bar to homologation – #819

In Société des établissements de plein-air du Québec c. Station Mont-Ste-Anne inc., 2024 QCCS 2 (“SÉPAQ v. SMSA”), the Québec Superior Court granted homologation of an arbitral award and rejected its partial annulment, dismissing the argument that the award should not be homologated because it was merely declaratory. Also, the decision referred to parts of the award and arbitral record throughout its reasoning despite some concerns by one of the parties about maintaining the confidentiality of the arbitral record.

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Quebec – No abuse of process where parallel arbitration and court proceedings – #815

In Gaston Gagné inc. c. Gagné, 2023 QCCS 4552, the Court confirmed that arbitration clauses should receive a broad and liberal interpretation, dismissed an application to annul a final arbitral award, homologated the award, and dismissed a claim in damages based on an alleged abuse of process by the party opposing homologation. Even though one party decided to bring court proceedings on the same issue he put before the arbitrator, there was no abuse of process because his court proceeding did not impede the arbitration.

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Québec – No revocation of a homologated award without the prior revocation of the judgment – #812

In Investissements Immobiliers MB inc. v. SMP Direct inc., 2023 QCCS 4526, the Superior Court dismissed the application of Investissements Immobiliers MB inc (“Plaintiff”) to partially revoke a judgment homologating an arbitration award. In her decision, the Judge ruled that the Plaintiff had delayed acting without justifying the delay and that the application for revocation of the homologating judgment had no reasonable chance of success. The background is complicated. The application followed multiple proceedings between the court and the Arbitrator. The Plaintiff (Claimant in the Arbitration) applied to the court to annul the arbitration award on the basis that the Arbitrator had exceeded his jurisdiction. Then, before that application was decided, the Plaintiff returned to the Arbitrator for revocation of the award based on the fact that there was subsequent information that he had not considered that would affect the result. The Arbitrator refused to hear Plaintiff’s demand before the Court ruled on the Plaintiff’s annulment application. The Court homologated the award. Plaintiff’s application for leave to appeal was dismissed. The Arbitrator then dismissed the application for revocation. He found that the Court must revoke the homologating judgment first, which made the issues ruled in the arbitration award revocation issue because the homologating judgment give the award the force of res judicata. The Plaintiff’s later return to the court to revoke the homologating judgment was too late – five months later. The lesson? An arbitrator has no jurisdiction to revoke an award that has been homologated in a court judgment.

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Québec – Determination of Admissibility Left to Arbitrator Where Facts Disputed – #802

Fondations Trevi Canada c. Édyfic inc., 2023 QCCS 4466 highlights the importance of clear communications between parties when those communications have implications as to whether contractually prescribed deadlines are met where there is a multi-tier arbitration clause. In this case, the Court appointed an arbitrator where admissibility with respect to the arbitration was disputed. It was not obvious from a summary review of the evidence and an interpretation of the dispute resolution clause whether certain prescribed periods under the relevant agreement had expired. The Court rejected the defendant’s argument that the matter was inadmissible and that an arbitrator should therefore not be appointed. With reference to case law about the competence-competence principle, the Court held that these matters should be referred to the arbitrator for determination. This case engages the often difficult issue of jurisdiction versus admissibility.  

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Québec – Homologation refused where claim adjudication did not meet definition of “arbitration” – #800

In A. c. Frères du Sacré-Cœur, 2023 QCCS 2414, the Court determined that a claim adjudication process by two arbitrators pursuant to a class-action settlement agreement (“Agreement”) did not constitute arbitration. Therefore, the Court refused to homologate the arbitrators’ decisions, finding that two key features of arbitration described in Sport Maska Inc. v. Zittrer, [1988] 1 S.C.R. 564  (“Sport Maska”) were not present. 

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Québec – Final Award on arbitrator’s own jurisdiction: what recourse(s)? – #797

In ADREQ (CSD) Estrie c. Centre intégré universitaire de santé et des services sociaux de l’Estrie – CHUS, 2023 QCCA 1315, the Court of Appeal granted leave  to appeal  a Superior Court decision dismissing an application for annulment of an arbitration award. The first instance Judge ruled that despite the fact that the arbitrator heard the whole case on the merits and decided in the final award that he had no jurisdiction, the award could not be contested under the annulment provisions of the Code of Civil Procedure (sec. 648), but rather must be challenged under the provisions concerning an arbitrator’s ruling on their own jurisdiction (sec. 632). Because of the potential overlap between these provisions and because of the limited jurisprudence on their application, the Court of Appeal deemed that it was a subject of interest for the Court and granted the leave. 

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Québec – Arbitrator has jurisdiction to determine lien entitlement; only court has jurisdiction to enforce – #794

Santé Montréal Collectif CJV c. Veolia Health Services Montreal 2023 QCCS 3817 concerned a dispute relating to the construction of a hospital complex. The Respondent, Veolia Health Services Montreal sec (“Veolia”), alleged it was due money for repair work as part of its contractual obligation to perform maintenance after construction of the hospital complex was complete. It filed a notice of arbitration and at the same time a hypothec, or lien, against the subject property (the “Mortgage Notice”) with the court. The Applicant, Sante Montreal CJV Collective sec (“CJV”) built the hospital complex. It, had separate obligations to ensure the property was clear of encumbrances and applied to strike the Mortgage Notice (the “Request to Strike”). Even though only the Court had authority to discharge the Mortgage Notice, it nonetheless suspended CJV’s application, pending the determination of the arbitration, and ruled that the Veolia’s entitlement to relief pursuant to the Mortgage Notice was an issue for an arbitrator to decide.

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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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