Québec Archives - Page 6 of 19 - Arbitration Matters

July 18, 2022July 18, 2022

Québec – Light touch to determining arbitration clause application (except to the non-signatory, maybe!) – #638

In Cannatechnologie inc. c. Matica Enterprises Inc., 2022 QCCA 758, the Québec Court of Appeal (Justices Bélanger, Rancourt and Moore) affirmed the principle that a court should limit itself to a prima facie assessment of whether or not a dispute comes within the scope of an arbitration clause. If it does, a court proceeding regarding the dispute should be stayed so that the arbitrator can rule on his or her own jurisdiction.

July 5, 2022July 5, 2022

Québec – Court prevents “improper attempt to circumvent” final ICC award – #634

In Eurobank Ergasias v. Bombardier inc., 2022 QCCA 802, a majority of the Québec Court of Appeal (Mainville and Baudouin, JJ.A.): (1) confirmed the homologation of an ICC Arbitral Tribunal Final Award (“Final Award”); (2) confirmed the trial judge’s decision that a Québec bank did not have to pay under a Letter of Counter-Guarantee that was called upon, the purpose of which was the evasion of the binding ICC arbitration process; and (3) overturned the trial judge’s decision to direct the Hellenic Ministry of National Defence (“HMOD”), a branch of the Greek government, to comply with the Final Award because HMOD was not an entity domiciled in Québec and homologation is for the purpose of rendering the Final Award legally binding in Québec, not in Greece.

June 8, 2022May 27, 2022

Québec– Court declines homologation based upon CCAA discretion – #625

In Arrangement relative a Rising Phoenix International Inc., 2022 QCCS 1675, Justice Collier considered the interplay between: (a) the right of the winning party in an arbitration to homologate or enforce an arbitral award in the courts in arbitration legislation; and (b) the stay of proceedings in effect when a corporation is granted creditor protection under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”). Here, a creditor of the corporation obtained an arbitral award in its favour and applied to have it homologated and enforced as against the directors of the corporation in respect of their personal liability. Justice Collier found that the language of the CCAA and the Amended and Restated Initial Order did not stay proceedings involving a director’s liability for personal wrongdoing, even if those wrongful acts occurred while the person was a director of the company under creditor protection. However, he exercised his broad discretion under the CCAA to make orders that are consistent with the remedial objectives of the Act and extend the stay to third parties. Therefore, he refused the creditor’s application to homologate or enforce the arbitral award as against the directors personally because it would likely negatively affect the CCAA restructuring process.

May 23, 2022May 26, 2022

Québec – Court extends arbitrator’s immunity to appointing authority – #619

In B Smart Technology inc. v. American Arbitration Association, 2022 QCCS 1526, Justice Mark Phillips granted the Defendants’ Application for dismissal of the Plaintiff’s Request for Provisional Interlocutory Injunction and Order to Safeguard the Rights of Plaintiff. The Defendants were the American Arbitration Association (“AAA”) and the arbitrator it had appointed. In its Request, Plaintiff sought orders: (1) to recuse and replace the arbitrator; (2) to review the arbitration proceedings, including the costs of the proceedings, the reimbursement for arbitrator’s fees paid to date; and (3) alternatively, the annulment of the arbitration clause and referral of the dispute to the Superior Court. Justice Phillips’s judgment was mainly based on the application of two well-known principles in arbitration law: arbitrator protection against prosecution/immunity (sec. 621 CCP); and the exclusion of court review except as provided by law (sec. 622 CCP). Justice Phillips reaffirmed that the arbitrator’s protection against prosecution is broad and applies both to the arbitrator’s liability and to any challenges against the conduct of the arbitration process itself. He found that the institute offering arbitration services is covered by the protection as well. Justice Phillips also confirmed the exclusion of court review principle, which prevents courts from interfering in an arbitration process other than within the strict and limited occasions provided by law. In this case, the law did not provide for court intervention. Finally, the issue was moot because the arbitrator terminated the arbitration for the Plaintiffs’ failure to pay his costs, as he was entitled to do under the AAA Rules.

May 9, 2022May 9, 2022

Québec – Intervention by appointing authority not permitted on challenge to decision – #613

In Mullen v. Nakisa inc., 2022 QCCS 1164, Justice Lacoste rejected a request that the Canadian Commercial Arbitration Centre (the “CCAC”), an appointing institution, be permitted to intervene in an appeal of a decision by an arbitrator appointed by it. Applying the higher threshold for interventions in private litigation, Justice Lacoste held that there was no reason to permit the CCAC to intervene as it would not add any substance to the arguments on appeal.

April 11, 2022April 18, 2022

Québec – Annulment: no review of the merits, even if award wrong – #603

In Balabanian v. Paradis, 2022 QCCS 959, Justice Harvie reaffirmed clearly that courts have no jurisdiction to revisit the merits of an arbitral award or the arbitrator’s reasons and assessment of the evidence when a party is seeking homologation or annulment of an arbitral award. This judgment is one of many in a saga involving opposing co-owners regarding the management and maintenance of their property. The co-ownership contract included an arbitration agreement. A group of co-owners alleged a lack of transparency and equity by Balabanian in the management and maintenance of the property. The dispute against Balabanian resulted in two arbitrations and court proceedings, taking place in parallel. Justice Harvie’s decision concerned the second arbitration process. The group of co-owners sought the homologation of the second arbitral award, while Balabanian asked for its annulment. Balabanian contested the award for numerous reasons, including: the arbitrator’s appointment because of his lack of independence and neutrality, the lack of jurisdiction of the arbitrator, the award going beyond the scope of the arbitration agreement, the violation of the fundamental right to be heard and, more generally, the merits of the award itself. Justice Harvie dismissed every argument made by Balabanian against the award, reaffirming the strict scope of analysis of homologation/annulment grounds according to sections 645 and 646 CCP.

March 16, 2022February 1, 2023

Québec – Delay in raising arbitration provision fatal to application to amend class – #595

In 9238-0831 Québec inc. v Télébec and Vidéotron senc, 2022 QCCS 183 Justice Lussier dismissed defendant Vidéotron’s request to modify the definition of the plaintiff group in a class action to exclude customers who had signed a contract containing an arbitration clause. Vidéotron changed the relevant contracts to add the arbitration clause after the plaintiff’s application to authorize institution of the class action but before that application was decided. However, its application to modify the plaintiff group was brought outside of 45 days from the originating application in the litigation, as required by article 622 of the Code of Civil Procedure, CQLR c C-25.01. Vidéotron had participated in the judicial process for years before bringing its application and offered no explanation for its delay.

March 2, 2022May 4, 2022

Québec – Merchants reselling tickets not bound by arbitration agreement – #590

In Abihsira v. Ticketmaster Canada, 2022 QCCS 164, Justice Gagnon granted authorization to institute a class action against Ticketmaster Canada (“Ticketmaster”) on behalf of consumers and non-consumers, despite an arbitration agreement between the parties. Relying on public order provisions that extend the benefits of the Consumer Protection Act, CQLR c P-40.1 (“CPA”) to merchants selling or re-selling tickets, he found that the jurisdiction of the Superior Court could not be ousted by the arbitration agreement.

February 9, 2022May 4, 2022

Québec – Statutory tribunal chair disqualified for bias for comments made in presence of witness during hearing break – #582

In Terrebonne Police Brotherhood Inc. v Truchon, 2022 QCCS 34, Justice Poulin granted, in part, the plaintiff union’s application for judicial review of a decision rendered by a three-person statutory tribunal. The tribunal had dismissed the union’s motion for an order disqualifying the entire tribunal based upon comments made by the chair, which were overheard by a witness and an observer during a break in the hearing. Justice Poulin set aside the tribunal’s ruling and found that those comments demonstrated both a lack of impartiality and a lack of open mind on the part of the chair, which warranted his disqualification. However, the other two members of the panel were not disqualified, even though they contributed to the unanimous decision dismissing the union’s motion. The chair’s comments could not be imputed to them.

January 31, 2022May 4, 2022

Québec – Enforcement of foreign award against alter egos – #578

In CC/Devas (Mauritius) Ltd. v. Republic of India, 2022 QCCS 7, Justice Pinsonnault was seized with several questions with respect to two seizures before judgment by garnishment, which were authorized within the context of an application for recognition and enforcement of arbitral awards rendered outside of Québec. What makes this situation of interest is the fact that the seizures before judgment involved assets (money) owned by third parties who were not defendants to the arbitration or named in the awards for which recognition is sought (still pending). They are not implicated at all in the facts alleged in the dispute leading to these awards and they are not targeted in the awards either. Nonetheless, Justice Pinsonnault concluded that the allegations against these third-party corporations (fully owned by the respondent, Republic of India) were sufficient to cause him to confirm the seizure against one of them, although with a revised scope. The seizure against the other corporation was dismissed for other reasons related to the State Immunity Act. The application for recognition and enforcement of the awards remains pending.