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CANADA Arbitration Place The British Columbia Supreme Court, in Ben 102 Enterprises Ltd v Ben 105 Enterprises Ltd, 2014 BCSC 64, held that an arbitrator is entitled to delay the release of a final award until all outstanding fees are paid. 36 Date of award For what time limits is the date of the award decisive and for what time limits is the date of delivery of the award decisive? Unless agreed otherwise, a party has 30 days from the receipt of an award to request clerical or typographical corrections from the tribunal, or to seek an interpretation of a specific part of the award. An application to the court to set aside an award must be made no later than three months after it is received. 37 Types of awards What types of awards are possible and what types of relief may the arbitral tribunal grant? Although not specifically addressed in any of the International Arbitration Acts (save for British Columbia’s), interim and partial awards are commonly rendered in Canada. The Model Law also provides that an award on agreed terms shall be rendered subject to the same requirements as any other award. Arbitrators in Quebec may also render partial or interim awards, but as noted above, these may not amount to injunctive relief, which is reserved to the Superior Court. Article 33 of the Model Law provides that following receipt of a final award, a party may request an additional award in respect of claims that were presented during the proceedings but which were omitted from the final award. 38 Termination of proceedings By what other means than an award can proceedings be terminated? Where a claimant fails to deliver a statement of claim in a timely fashion, the tribunal shall terminate the proceedings, unless otherwise agreed by the parties. The Model Law also requires the tribunal to terminate proceedings where: the claimant withdraws its claim (unless the respondent has a legitimate interest in continuing); the parties agree; or the tribunal finds the continuation of proceedings unnecessary or impossible. In circumstances where a settlement is reached during the course of proceedings, the tribunal must terminate the proceedings, and may record that settlement in the form of an award if so requested by the parties. Most Canadian jurisdictions, in implementing the Model Law, have added that the tribunal may encourage a settlement, and with the agreement of the parties, may ‘use mediation, conciliation or other procedures’ at any time during the proceedings without being disqualified from resuming the role of arbitrator. 39 Cost allocation and recovery How are the costs of the arbitral proceedings allocated in awards? What costs are recoverable? Cost allocation is not addressed in the International Arbitration Acts, save for the British Columbia Act, which specifically provides that the costs of an arbitration are in the discretion of the tribunal, and may include legal fees, arbitrator fees, institutional administration fees and ‘any other expenses incurred in connection’ with the proceedings. Even without this express language, arbitrators in other Canadian jurisdictions routinely award costs, finding jurisdiction to do so either through the arbitration agreement, applicable institutional rules or a recognised equitable right to award costs as justice requires. In keeping with the rules for cost allocation applicable in Canadian courts, costs are typically awarded on a ‘loser pays’ basis, with apportionment possible where success is divided. 40 Interest May interest be awarded for principal claims and for costs and at what rate? The awarding of interest, either on principal claims or costs, is not addressed in the International Arbitration Acts, save for the British Columbia Act that expressly provides that tribunals may award interest. Tribunals in other Canadian jurisdictions, however, routinely award interest where the power to do so is found in the provisions of the underlying contract at issue, the arbitration agreement, the applicable institutional rules, or the law governing the substance of the dispute. The rate is normally a commercial rate in relation to the Bank of Canada prime rate, unless otherwise expressly provided for in the underlying contract. Proceedings subsequent to issuance of an award 41 Interpretation and correction of awards Does the arbitral tribunal have the power to correct or interpret an award on its own or at the parties’ initiative? What time limits apply? Pursuant to article 33 of the Model Law, a party has 30 days from the date of receipt of the award to request corrections of any typographical, computational or clerical errors, or to seek an interpretation of a specific part of the award from the tribunal. The tribunal may also correct errors and issue clarifications on its own initiative, subject to the same 30-day time limit. 42 Challenge of awards How and on what grounds can awards be challenged and set aside? The International Arbitration Acts prescribe a limited number of grounds upon which applications to set aside an award may be made to the courts. In general, Canadian courts show significant deference to arbitral tribunals, and pursuant to article 34 of the Model Law will only set aside an award where it is proven that: • a party was under some incapacity; • the arbitration agreement was invalid under the applicable law; • the party making the application to set aside an award was not given proper notice of an arbitrator’s appointment or the arbitral proceedings, or was otherwise unable to present his or her case; • the award deals with a dispute not contemplated in the submission to arbitration; or • the arbitral tribunal or the applicable procedure was not in accordance with the agreement of the parties. The award may also be set aside where the court finds that the subject matter of the dispute itself is not arbitrable, or where the award conflicts with a public policy, as supported by a specific law of the Canadian jurisdiction at issue. On an application to set aside an award, the court has discretion to stay the underlying arbitration proceedings. 43 Levels of appeal How many levels of appeal are there? How long does it generally take until a challenge is decided at each level? Approximately what costs are incurred at each level? How are costs apportioned among the parties? Awards made in international arbitrations seated in Canada are generally not subject to appeal. In the limited circumstances prescribed in the International Arbitration Acts where a party may bring a challenge before the courts (eg, a challenge to the tribunal’s jurisdiction or to the appointment of an arbitrator), the Acts specifically provide that the court’s decision is not subject to further appeal. In other instances where arbitral proceedings may come before the courts, however, for example on an application to enforce or set aside an award, the Canadian judicial system generally consists of three levels of court: a provincial superior court of first instance; a provincial court of appeal; and finally the Supreme Court of Canada. Leave to appeal to the court of appeal is required in some instances, and leave to the Supreme Court of Canada is always needed, except in criminal matters. 72 Getting the Deal Through – Arbitration 2016 © Law Business Research 2016
Arbitration Place CANADA Update and trends The number of international trade and investment treaties to which Canada is a party has increased markedly in recent years. As noted in question 2, most of these bilateral investment treaties and free trade agreements contain investment arbitration provisions. With Canada’s recent ratification of the ICSID Convention, and the signing of the Trans-Pacific Partnership and the European Union Comprehensive Economic and Trade Agreement, the trend of Canada’s growing involvement in international investment arbitration looks likely to accelerate. Legislative review of the International Arbitration Acts continues to be an issue of discussion in Canadian legal circles. At its 2014 annual meeting, the Uniform Law Conference of Canada adopted the final Report of a Task Force on the Model Law Amendments, which included a proposed new uniform International Commercial Arbitration Act, and called for its implementation throughout Canada. The new uniform Act adopts the 2006 Model Law amendments, and aims at eliminating the variety of small discrepancies that currently exist as between the International Arbitration Acts. In Quebec, the legislature passed comprehensive amendments to that province’s Code of Civil Procedure in 2014, with the changes expected to come into force in January 2016. Among numerous other changes, the new Code of Civil Procedure requires that parties – including public entities – consider recourse to private forms of dispute resolution (such as mediation and arbitration), and codifies many procedural rules applicable to arbitral proceedings in Quebec. A number of recent judicial decisions not mentioned in this chapter have also strengthened Canada’s position as an arbitrationfriendly jurisdiction. In particular, in Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, the Supreme Court of Canada confirmed (albeit in the context of a domestic arbitration) that significant deference is owed to the decisions of arbitrators, and that a review standard of ‘reasonableness’ rather than ‘correctness’ applies when those decisions are appealed to the courts. In Depo Traffic v Vikeda International, 2015 ONSC 999, the Ontario Superior Court of Justice, in granting an order for recognition and enforcement of a foreign arbitral award, emphasised the importance of the ‘principle of non-judicial intervention in arbitral awards’. In Popack v Lipszyc, 2015 ONSC 3460, in the face of evidence that grounds to set aside an arbitral award (from an international tribunal seated in Ontario) under article 34 of the Model Law had been met, the Ontario Superior Court of Justice refused to do so. The Court reasoned that given the principles and objectives which underpin the Model Law (namely party autonomy and the respect owed to tribunals), an application to set aside an award must be weighed against the prejudice that would result to both parties if such an order were granted. The Court determined that the annulment or setting aside of an award was discretionary and that the particular due process issue in that case (the tribunal spoke to a witness in the absence of the parties, but with the agreement of the parties) did not outweigh the prejudice of setting aside the award. Times vary from province to province, but in general, an appeal can take from six to 12 months, with even longer time frames expected when appealing to the Supreme Court of Canada. Costs depend largely on the length and complexity of the case, and on tariffs that differ in each Canadian jurisdiction. As noted above, cost awards in Canada follow the ‘loser pays’ principle, and may be apportioned according to mixed success. 44 Recognition and enforcement What requirements exist for recognition and enforcement of domestic and foreign awards, what grounds exist for refusing recognition and enforcement, and what is the procedure? For the purposes of recognition and enforcement under the Model Law, the award must be commercial and international as those terms are defined in the International Arbitration Acts. In Ontario, however, an arbitral award will include commercial arbitral awards made outside of Canada, even if the arbitration itself was not international. Article 36 of the Model Law prescribes the grounds for refusing recognition and enforcement of an award, and these are very similar to the grounds available for setting aside an award. In Canada, the task of enforcement is left to the courts: once recognised, an arbitral award is enforceable in the same manner as a judgment of the court. Canadian courts generally look favourably on the enforcement of foreign arbitral awards. A recent decision of the Supreme Court of Canada, Chevron Corp v Yaiguaje, 2015 SCC 42, clarified the state of the law with regard to the recognition and enforcement of foreign judicial decisions, and this in turn may influence the approach applicable to arbitral awards. In particular, the Supreme Court held that the absence of recoverable judgment debtor assets in Canada does not, by itself, preclude a Canadian court from exercising jurisdiction in recognition and enforcement proceedings. Also, the Supreme Court confirmed that there need not be any ‘real and substantial connection’ between the Canadian court and the foreign court or the subject matter of the dispute. 45 Enforcement of foreign awards What is the attitude of domestic courts to the enforcement of foreign awards set aside by the courts at the place of arbitration? Pursuant to Article 36 of the Model Law, Canadian courts will generally not enforce foreign arbitral awards that have been set aside by the courts at the place of arbitration, although they retain the judicial discretion to do so. In Stans Energy Corp. v Kyrgyz Republic, 2015 ONSC 3236, the Ontario Divisional Court recently set aside an ongoing Mareva injunction in part on the basis that the underlying foreign award had been set aside by a Russian court. 46 Enforcement of orders by emergency arbitrators Does your domestic arbitration legislation, case law or the rules of domestic arbitration institutions provide for the enforcement of orders by emergency arbitrators? The International Arbitration Acts do not address the enforcement of orders issued by emergency arbitrators, nor has the issue been considered by Canadian courts. The Arbitration Rules of the ADR Institute of Canada, provide that the emergency arbitrator’s decision ‘must be in the form of an order’, whereas the ADR Chambers Arbitration Rules provide that an emergency arbitrator may enter an ‘interim award’. Arguably, only an award is enforceable pursuant to the terms of the Model Law and the New York Convention. 47 Cost of enforcement What costs are incurred in enforcing awards? Recognition and enforcement proceedings are commenced by way of applications to the court, which generally proceed in writing supported by affidavit evidence. The costs involved include filing fees and associated legal fees, which are heavily dependent on the complexity of the application and whether there are contested issues regarding enforcement. Once recognised, the award can be enforced through the full range of remedies available for execution of court judgments, which in turn carry their own (fact-dependent) costs. Other 48 Judicial system influence What dominant features of your judicial system might exert an influence on an arbitrator from your country? The influence exerted by the Canadian judicial system on Canadian arbitrators is, in general, favourable towards arbitration. This influence includes a deference towards arbitrators, a flexible approach to procedural rules in the ultimate interests of fairness and efficiency, and respect for underlying principles of natural justice and the rule of law. In particular, Canada’s judicial system generally entails pre-hearing documentary productions and oral discovery of a single witness per party, subject to time limits and the rules of privilege. US-style discovery involving the deposition of numerous witnesses is prohibited. In the arbitration context, however, pre-hearing oral discoveries are rarely seen; witness statements are common, and hearings are typically restricted to crossexaminations. In both the judicial and arbitration context, individual parties and corporate officers may be expected to testify if they are in a position to provide relevant and probative evidence (and an adverse inference may be drawn if they do not). www.gettingthedealthrough.com 73 © Law Business Research 2016
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Page 3 and 4: CONTENTS Introduction7 Gerhard Wege
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