Set aside/Annulment Archives - Arbitration Matters

September 11, 2023September 8, 2023

Québec – Arbitration counsel not disqualified, despite opposing party paying underlying transaction fees – #771

In Glen Eagle Resources Inc. c. GEM Global Yield, 2023 QCCS 3144, the Court determined that a law firm was not disqualified from acting as counsel in annulment and enforcement proceedings when it acted for one party, but a portion of the legal fees were paid by the opposing party in the transaction giving rise to arbitration. But it raises a potential red flag for counsel.

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 18, 2023August 18, 2023

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.

August 17, 2023August 11, 2023

Québec – No evidence permitted in support of annulment application – #765

In Glen Eagle Resources Inc. v. Gem Yield Bahamas Ltd, 2023 QCCA 686, the Court of Appeal dismissed Appellant’s application for leave to appeal the Superior Court’s decision dismissing Appellant’s request to adduce evidence in support of its application for annulment of an arbitral award. The lower court dismissed Appellant’s request to have a witness testify in support of its argument that the contract containing the arbitration clause was void. Appellant argued that the nullity of the contract would lead to the conclusion that the arbitrator had no jurisdiction. Respondent, which applied for homologation of the award, argued that the lower court had no jurisdiction to hear evidence on the merits of the arbitration on an application to annul the award and that, in any event, the arbitration clause was a separate contract, not affected by the nullity of the contract in which it was included. Following the Superior Court’s decision, the hearing before it was suspended until the Court of Appeal’s decision on the matter.

July 19, 2023July 17, 2023

Québec – Arbitrator’s past professional relationship not a cause of partiality – #756

In Tourigny v Chabot, 2023 QCCS 1976 (“Tourigny”), the Court homologated an arbitral award for costs, thereby dismissing the Defendants’ challenge based on an application to recuse the arbitrator on grounds of partiality.

July 6, 2023June 29, 2023

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.

July 4, 2023July 4, 2023

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.

June 21, 2023June 23, 2023

Ontario – Courts must decide arbitral jurisdiction de novo – #748

In Russian Federation v. Luxtona Limited, 2023 ONCA 393, the Ontario Court of Appeal held that in an application to Ontario courts under the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), being Schedule 2 to the International Commercial Arbitration Act, 2017, c. 2, Sched. 5, for the court to decide whether an arbitral tribunal had jurisdiction, the court must decide the jurisdictional question de novo. In other words, there is no deference owed to the arbitral tribunal on the question of that tribunal’s jurisdiction. The Court reached this conclusion after considering the strong international consensus to that effect, and reaffirmed the “uniformity principle”, which holds that it is “strongly desirable” for Ontario’s international arbitration regime to be interpreted coherently with that of other countries.

June 5, 2023June 5, 2023

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.

May 25, 2023June 13, 2023

B.C. – Inadequate reasons on central issue a breach of natural justice – #740

In Bromley v. Getzie, 2023 BCSC 446 (“Bromley”), Justice Brongers remitted an arbitral award to the Arbitrator for reconsideration as a remedy for the arbitrator’s failure to observe the rules of natural justice, pursuant to s. 30 of the (former) British Columbia Arbitration Act, RSBC 1996, c. 55 (the “Act”). Justice Brongers found that the Arbitrator had breached principles of natural justice because he provided inadequate reasons on a “central issue” in dispute between the parties. This is a rare finding, but one which appears to rely, in part, on principles of natural justice as they relate to applications for judicial review in administrative proceedings. Regrettably, scant reasons are provided regarding the decision of Justice Brongers to order remittance of the matter to the arbitrator, rather than to set aside the award, as a remedy for the breach of natural justice.