This country-specific Q&A provides an overview of International Arbitration laws and regulations applicable in Canada.
What legislation applies to arbitration in your country? Are there any mandatory laws?
Every province and territory of Canada, except Quebec, has two arbitration statutes. One statute applies to domestic arbitrations, while the other applies to international commercial arbitrations. For example, in Alberta, theArbitration Act, RSA 2000, c A-43 (Alberta Arbitration Act) applies to domestic arbitrations, whilethe International Commercial Arbitration Act, RSA 2000, c 1-5 (Alberta International Commercial Arbitration Act)applies to international commercial arbitrations.
In Quebec, the Civil Code of Quebec (CCQ) and the Code of Civil Procedure (CCP) apply toboth domestic and international commercial arbitrations.
At the federal level, the Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp) (Federal Commercial Arbitration Act) applies to both domestic and internationalcommercial arbitrations when: (a) at least one of the partiesis a federal department or Crowncorporation; or (b) the arbitration involves an admiralty or maritime matter.
There are mandatory laws regarding arbitration. However, the mandatory laws depend on which statute applies.Common mandatory laws in domestic arbitration statutes provide that:
the parties shall be treated equally and given an opportunity to present a case;
the courts must stay court proceedingsabout matters that are subject to an arbitration agreement;
if an arbitration agreement does not specify the number of arbitrators who are to form the arbitral tribunal, the arbitral tribunal shall be composed of one arbitrator;
an arbitrator shall be independent of the parties and act impartially; and
subject to the arbitration agreement, a party may only appeal on questions of law with leave of the court.See, for example, ss.7(1), 9, 11(1),19, 44(2), and 44(2.1) of the Alberta Arbitration Act andss. 7(1),9, 11(1), 19, and 45(1) of the Ontario Arbitration Act, 1991, SO 1991, c 17 (Ontario Arbitration Act).
Common mandatory laws in international commercial arbitration statutes, including the Federal Commercial Arbitration Act, provide that:
arbitration agreements shall be in writing;
if an arbitration agreement does not specify the number of arbitrators who are to form the arbitral tribunal, the arbitral tribunal shall be composed of three arbitrators; and
the parties shall be treated equally and given a full opportunity to present a case. See, for example, ss. 7(2), 10, and 18 of Schedule 1 of the Federal Commercial Arbitration Act and ss. 7(2), 10, and 18 of Schedule 2 of the Alberta International Commercial Arbitration Act.
Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Canada is a signatory to the New York Convention. The Convention entered into force in Canada on August 10, 1986.
Canada has issued one reservation to the general obligations of the New York Convention. In every province and territory of Canada, except Quebec, the New York Convention only applies to differences arising out of legal relationships that are considered commercial pursuant to the laws of Canada.
What other arbitration-related treaties and conventions is your country a party to?
In addition to the New York Convention, Canada is a party to:
the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 (ICSID); and
numerous bilateral and multilateral investment treaties and free trade agreements.
Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
The law governing international arbitration in Canada is based on the UNCITRAL Model Law. Every international commercial arbitration statute, except those in British Columbia and Quebec, incorporate the UNCITRAL Model Law as a schedule. In British Columbia and Quebec, the statutes applicable to international commercial arbitrations are generally consistent with the UNCITRAL Model Law.
Are there any impending plans to reform the arbitration laws in your country?
Amendments to the domestic legislation in the Province of British Columbia are anticipated in 2020. There are no other impending plans to reform any of the arbitration statutes in Canada.
What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?
Numerous arbitral institutions exist in Canada, including the ADR Institute of Canada Inc. (ADRIC), British Columbia International Commercial Arbitration Centre (BCICAC), Canadian Arbitration Association (CAA), and International Centre for Dispute Resolution of Canada (ICDR – Canada).
The ADRIC, BCICAC, and CAA rules were last amended in 2016, while the ICDR rules were last amended in 2014. As of September 2019, no amendments to the rules were being considered.
What are the validity requirements for an arbitration agreement under the laws of your country?
The validity requirements for an arbitration agreement depend on which statute applies. Some domestic arbitration statutes require that arbitration agreements be in writing, while other domestic arbitration statutes, such as those in Alberta and Ontario, do not expressly. Every international commercial arbitration statute, including the Federal Commercial Arbitration Act, require that arbitration agreements be in writing.
Are arbitration clauses considered separable from the main contract?
Arbitration clauses are considered separable from the main contract. Some domestic arbitration statutes, such as those in Alberta and Ontario, expressly provide that arbitration clauses are separable from the main contract, while other domestic arbitration statutes do not. In the provinces and territories with domestic arbitration statutes that do not provide that arbitration clauses are separable from the main contract, such as British Columbia, the courts apply the common law doctrine of separability. See, for example, James v Thow, 2005 BCSC 809. Every international commercial arbitration statute, including the Federal Commercial Arbitration Act, incorporates Article 16 of the UNCITRAL Model Law, which provides that arbitration clauses are separable from the main contract.
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
Most domestic arbitration statutes provide that both the courts and the parties can consolidate multi-party and multi-contract arbitrations with the consent of all the parties. See, for example, ss. 8(4) and 8(6) of the Alberta Arbitration Act and ss. 8(4) and 8(6) of the Ontario Arbitration Act.
In what instances can third parties or non-signatories be bound by an arbitration agreement?
Canadian courts have held that non-signatories can be bound by an arbitration agreement in certain circumstances, including when:
there is an agency relationship between a signatory and a non-signatory;
the relationship between a parent company and a subsidiary company is sufficiently close to justify piercing the corporate veil;
a non-signatory is bound by estoppel; and
a signatory treats a non-signatory as a:
nominee of a signatory; or
true party to the arbitration agreement. See com Inc v Yates, 2017 BCSC 1572.
How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?
In general, the law applicable to the substance of the dispute is determined by the agreement of the parties. In the absence of an agreement of the parties, the arbitral tribunal may apply the law it considers appropriate in the circumstances. There is no specific set of choice of law rules. See, for example, s. 32(1) of the Alberta Arbitration Act and s. 32(1) of the Ontario Arbitration Act.
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
In Canada, criminal matters are non-arbitrable. Otherwise, the arbitrability of a dispute depends on the laws of the relevant province or territory. In Quebec, for example, disputes about “the status and capacity of persons, family matters or other matters of public order” are non-arbitrable (art. 2639 of the CCQ). Further, in Ontario, disputes about certain consumer agreements are non-arbitrable. See s. 7(2) of the Consumer Protection Act, 2002, SO 2002 c 30, Sched A and TELUS Communications Inc v Wellman, 2019 SCC 19.
In your country, are there any restrictions in the appointment of arbitrators?
Although there are no restrictions on the parties’ freedom to choose arbitrators, an arbitrator must be independent and impartial. This is provided for in the domestic and international arbitration acts of all the provinces either expressly or by implication. The international acts also require arbitrators to disclose any circumstances that may give rise to a reasonable apprehension of bias. There is no requirement than an arbitrator be trained as a lawyer or be a member of the legal profession.
Are there any default requirements as to the selection of a tribunal?
The domestic and international acts of the provinces address appointment procedures. Typically, the parties are free to agree on a procedure for selecting arbitrators. If they do not provide for the procedure in their agreement, then the legislation will dictate the procedure.
Under the international acts, the default requirements are:
In an arbitration with three arbitrators, each party appoints one arbitrator and the two arbitrators appointed will select the third. If a party fails to appoint an arbitrator within 30 days of being asked, or if the two selected arbitrators fail to agree on a third within 30 days of their appointment, the appointment will be made by the court on request.
In an arbitration with a single arbitrator, if the parties are unable to agree on an arbitrator, the court will appoint one on request.
The domestic acts throughout the provinces vary on their default procedures but are generally similar to the international acts. Of note, however, is that most of the provincial domestic acts prescribe one arbitrator as the default of the parties have not agreed specifically in their arbitration agreement.
Can the local courts intervene in the selection of arbitrators? If so, how?
Yes, if the parties have not agreed on the procedure to appoint an arbitrator or if a party fails to follow the procedure agreed upon, a court may appoint the arbitral tribunal on a party’s application. If the parties are unable to decide on an arbitrator based on their agreed procedure, then courts may also interfere and appoint an arbitrator. This is provided for in all the arbitration acts across the provinces. There is no appeal from the court’s appointment of the arbitral tribunal.
Under the international acts and in Quebec, a party has 30 days to appoint an arbitrator, failing which the courts will do so.
Can the appointment of an arbitrator be challenged? What are the grounds for such challenge? What is the procedure for such challenge?
The appointment of an arbitrator can be challenged across the provinces. The parties are free to agree on a procedure for challenging an arbitrator. If they have not reached an agreement on these terms, then a party wishing to challenge the appointment must follow the procedure in the governing legislation or institutional rules, if applicable.
All the acts provide for a party to challenge the appointment of an arbitrator for two reasons:
Circumstances exist that may give rise to a reasonable apprehension of bias.
The arbitrator does not possess qualifications that the parties have agreed are necessary.
Typically, the party seeking to challenge an arbitrator sends a written statement of the reasons for the challenge to the arbitral tribunal within 15 days of becoming aware of those reasons. Unless the arbitrator withdraws or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. A party who has appointed an arbitrator may only challenge that arbitrator on grounds of which the party was unaware at the time of the appointment. Once the tribunal has made a decision on the challenge, that decision can be reviewed by the courts. In British Columbia, a court would hear the challenge directly instead of the tribunal at first instance. In Alberta, there is a further review available to the court of appeal of the lower court’s decision.
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
Generally, if there is a truncated tribunal, whatever procedure the parties have agreed upon will apply to the appointment of a new adjudicator. If the parties have not agreed, all the arbitration acts generally contain procedures for the court appointment of a new arbitratorin the event that an arbitrator is unable to continue for whatever reason.
Parties may also apply to court to have an arbitrator discharged for various reasons. The arbitration acts are fairly consistent on this point throughout Canada, except in British Columbia. In British Columbia, parties may not discharge the authority of an arbitrator without first seeking leave from the court. It provides factors which must be considered in granting leave and if an arbitrator is removed, if the parties can then not decide on a new arbitrator, a court may stay the arbitration in favour of court proceedings.
Are arbitrators immune from liability?
The Supreme Court of Canada has established the following preconditions, the existence of which establish immunity from suit for arbitrators:
There must be an existing dispute which the parties have submitted to the arbitrator;
The arbitrator must be acting in a judicial or quasi-judicial manner; that is, he or she receives evidence and hears argument in coming to his or her decision; and
The arbitrator must be fulfilling his or her function as an independent party, in compliance with the mandatory provisions of the applicable legislation.
Generally, arbitrators are immune from liability for negligence. They must nevertheless act honestly and fairly between the parties. If an arbitrator is found to be guilty of misconduct, including acting in bad faith or fraud, they could be sued for recovery of fees.
Is the principle of competence-competence recognised in your country?
Yes, the competence-competence principle has been recognised by the Supreme Court of Canada and it is found in most of the provincial statutes. Canadian courts will intervene in limited circumstances to determine the jurisdiction of an arbitral award. These circumstances are when the jurisdictional challenge is based solely on a question of law or the questions of fact are superficial, the lack of jurisdiction is clear and obvious or the court is satisfied that the challenge is not a delaying tactic. This was stated by the Supreme Court of Canada in Dell Computer Corp. v. Union des consommateurs (2007 SCC 34). Canadian courts will also intervene, on application by a party, in two possible cases when the tribunal rules on its own jurisdiction. First, as a preliminary issue and, second, in a final award. In the first case, the decision is not subject to appeal. The arbitral proceedings can generally continue, according to all the provincial acts, while a party seeks to resolve the issue of jurisdiction before a court.
What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
Most of the arbitration acts do not give the courts the discretion to hear a dispute in the face of a binding and applicable arbitration agreement. Courts are required to stay the legal proceedings and force the parties to arbitrate.
In international arbitrations, courts are required to stay or dismiss actions in favour of arbitration on the timely application of a party unless the arbitration agreement is void, inoperative or incapable of being performed. The test for whether an agreement exists is whether the party applying for the stay of the court action can show an arguable case that an arbitration agreement exists. The arbitrator will then get to determine their jurisdiction and the validity of the arbitration agreement, after the court has ordered a stay.
In domestic arbitrations, courts are typically required to stay or dismiss all or part of an action in favour of arbitration unless there are reasons not to enforce the arbitration agreement. Most of the domestic acts provide legislative exceptions to the requirement to order a stay. These can include incapacity of a party when the agreement was entered, the agreement itself is invalid, the subject matter of the dispute is prohibited from being arbitrated, delay in seeking a stay or the matter can be dealt with by default or summary judgment. Otherwise, the courts will order a stay and allow the arbitrator to determine their own jurisdiction. Another issue that might arise is which party can seek a stay. In Ontario and Alberta, only the party that did not initiate the court proceedings may seek a stay. In British Columbia and Quebec, any party may seek a stay.
How are arbitral proceedings commenced in your country? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
If the arbitration is to take place in Canada, then absent an agreement between the parties, the applicable domestic or international act will determine how proceedings are commenced. If the parties have agreed to the procedural rules then those rules will apply, subject to any mandatory procedural laws at the place of arbitration. The powers of the arbitral tribunal can only be exercised once each member has accepted the appointment of the arbitrator and the panel is complete, as provided in the domestic acts.
Under most domestic acts, the acts generally require a party to serve notice to the opposing party to appoint an arbitrator pursuant to their agreement. Parties in Canada generally follow the New York Convention when it comes to the form of notice. Service can be by any means prescribed in the arbitration agreement, or if that is not agreed to, the rules of the place of the arbitration. In Canada, the rules for service under the domestic acts are similar to that of the rules governing civil procedure in each province. In Quebec, arbitration proceedings commence on the date the notice is sent from one party to another. In British Columbia, the domestic act prescribes the rules of the British Columbia International Arbitration Centre as the default rules for arbitrations unless the parties have agreed otherwise. These rules contain provisions relating to commencing arbitration.
In Canada, limitation periods are considered substantive law. For international arbitrations, arbitrators would need to interpret limitations issues according to the laws governing the contract. In domestic arbitrations, the provincial laws on limitations generally apply to arbitrations as if they were court proceedings. There is no such provision in the international acts. There may also be limitation periods within the arbitration agreements themselves which must also be abided by.
In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?
This is generally assessed on a case-by-case basis. Canadian courts have previously accepted and denied claims of sovereign immunity depending on the circumstances.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel participation?
Canadian courts do not compel parties to arbitrate. Courts will only enforce arbitration agreements by denying access to courts. However, it has happened that courts have ordered fines for parties not arbitrating their disputes in a timely manner.
If a claimant wishes to continue the arbitration, the arbitrator has broad powers to do what they feel just in the circumstances under all the arbitration acts. They may continue the proceedings and make an award based on the evidence they have if they choose to. However, there is no equivalent to default judgment in arbitrations.
Can local courts order third parties to participate in arbitration proceedings in your country?
There is no legislative regime in Canada to enable the joinder of third parties to arbitration. Courts will usually stay proceedings against third parties until the arbitration is resolved. Despite no legislative regime, courts across the country have ordered non-parties to the arbitration agreement to submit to arbitration. In certain circumstances, non-signatories can be parties to an arbitration agreement such as when the plaintiff treats the defendant as the true party to the contract or where there are multiple defendants and splitting between arbitration and court would lead to parallel proceedings.
Generally, arbitration awards are not binding on persons who were not parties to the arbitration. However, in certain circumstances, non-parties to the arbitration agreement can be bound by the arbitral award. This generally is through contract law doctrines such as agency, assignment or novation. Additionally, courts may also bind third parties in instances of piercing the corporate veil or by estoppel. As a general rule, the binding force of the arbitral decision is a matter of contract and so, there must be privity between the parties to the arbitration agreement. Local courts will, however, facilitate arbitration proceedings by requiring witnesses (who may be third parties) to attend and give evidence or produce evidence to the arbitral tribunal.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
Subject to the arbitration agreement, an arbitral tribunal’s power to order interim relief is generally broad and discretionary, although binding only on the parties to the dispute. For international arbitrations, the tribunal will typically consider the following factors:
whether the tribunal has prima facie jurisdiction over the dispute;
whether the request for relief is urgent and cannot await a determination on the merits;
whether the relief sought is necessary to prevent imminent harm that is not compensable by money or that may prejudice the arbitral process before the merits of the dispute are resolved;
whether the balance of convenience favours the granting of the order; and
whether the applicant has established a reasonable possibility of success on the merits.
For domestic arbitrations, tribunals will typically follow the legal test for injunctive relief set out by the Supreme Court of Canada in RJR Macdonald Inc. v. Canada (Attorney General) ( 1 S.C.R. 311). The factors considered are:
Is there a serious question to be tried?
Would the applicant suffer irreparable harm (meaning not compensable in money) if the application is refused?
Does the balance of convenience favour the granting of the interlocutory relief?
Local courts respect arbitration agreements and accordingly, are keen to facilitate the arbitral process, even before the constitution of the tribunal. As such, they will grant interim measures pending the constitution of the arbitral tribunal. Since arbitral tribunals lack the coercive power to enforce their own interim orders, courts will often assist as contemplated by the arbitration acts throughout Canada. The types of relief that can be obtained in court include detention, preservation and inspection of property, interim injunctions and receivers, security for costs and stays of court proceedings in favour of arbitration. Parties may also seek interim relief against third parties in court as the arbitral tribunal has no jurisdiction over third parties.
In Ontario and British Columbia, courts are required to enforce interim awards in international arbitrations if a party makes such an application. There are limited exceptions to this.
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence? Can local courts compel witnesses to participate in arbitration proceedings?
Subject to the agreement of the parties and procedural fairness, the arbitrator has discretion to determine the rules regarding the admissibility and weight of evidence. International arbitrations in Canada often refer to the IBA Rules on the Taking of Evidence in International Commercial Arbitration for guidance. Evidence is typically given under oath and is subject to cross-examination. Where expert evidence is needed, reports are typically exchanged prior to the hearing. Although the arbitral tribunal has the authority to appoint its own experts, that power is rarely exercised.
The arbitral tribunal can ask the local courts for assistance in the taking of evidence, and local courts can compel witnesses to appear for oral questioning in the arbitration or produce evidence. The court will generally assist so long as the evidence sought is consistent with the jurisdiction’s evidentiary rules.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country?
As a matter of procedural fairness, arbitrators are expected to be independent and impartial. Although there are no rules specifically governing the conduct of counsel, the rules of the law society of each province set out the ethical and professional obligations of Canadian counsel.
In your country, are there any rules with respect to the confidentiality of arbitration proceedings?
Although arbitration proceedings are private, there is no clear legal duty of confidentiality, except in the province of Quebec, or where the parties have adopted institutional or other rules that impose confidentiality obligations. Where there is a duty of confidentiality, if a party seeks court intervention, or if disclosure if otherwise required by law, confidentiality may be lost.
How are the costs of arbitration proceedings estimated and allocated?
Subject to the arbitration agreement, the arbitral tribunal generally has broad discretion with respect to the apportionment of costs. The general practice is that the successful party is entitled to its reasonable proven costs on a full indemnity basis.
Can pre- and post-award interest be included on the principal claim and costs incurred?
The arbitral tribunal’s authority to award interest may arise from the substantive contract in dispute, the applicable law, or the arbitration agreement. If the applicable law is Canadian law, the award of pre-judgement interest is an issue of substantive law; accordingly, the arbitral tribunal may make an award for interest. In some jurisdictions, such as in the province of British Columbia, the applicable international arbitration legislation explicitly provides for an award of interest.
What legal requirements are there in your country for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e. substantiated and motivated?
In order to enforce an award, the party seeking enforcement may apply to the court pursuant to a summary procedure. The application generally requires the applicant to file affidavit evidence including a) the authenticated original or a certified copy of the award; b) the original or certified copy of the arbitration agreement; and c) translations, if necessary. The specific procedure varies depending on the rules of court of the jurisdiction. The application must be brought within the relevant limitation period, which varies by jurisdiction.
An arbitral award must be made in writing, must state its date and the place of arbitration and must be signed by the arbitrators. Unless the parties agree otherwise, the award must contain reasons. A copy of the award must be delivered to each party.
What is the estimated timeframe for the recognition and enforcement of an award? May a party bring a motion for the recognition and enforcement of an award on an ex parte basis?
Each province and territory has enacted legislation providing for the recognition and enforcement of foreign commercial arbitral awards. Federal legislation also governs enforcement in limited circumstances. The recognition and enforcement provisions either adopt, or are based on, the Model Law and the New York Convention. The timeframe for the recognition and enforcement of an award is difficult to estimate as the procedural and practical variables differ in each jurisdiction, and there will also be variation depending on the complexity of the issues being argued.
Although an application to enforce an award is typically done on notice, a motion might be brought ex partein certain limited circumstances, such as where there is reason to believe that the other party would use notice primarily to frustrate the process or where it is not practical to provide notice.
Does the arbitration law of your country provide a different standard of review for recognition and enforcement of a foreign award compared with a domestic award?
Different legislation governs international and domestic arbitrations and awards and the requirements vary in each Canadian jurisdiction.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
The legislation does not impose limitations on remedies. Canadian courts have held that all remedies are enforceable by local courts, though there is a limitation on certain forms of injunctive relief in the province of Quebec.
Can arbitration awards be appealed or challenged in local courts? What are the grounds and procedure?
In some Canadian jurisdictions, there is no right of appeal without consent. In other jurisdictions, parties can seek leave to appeal from a judge in limited circumstances that are based on the Model Law. The rules of procedure vary between provinces and territories.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
Parties cannot waive the right to appeal or challenge an international commercial arbitral award before the dispute arises.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Canadian courts have accepted a defense of state immunity in certain circumstances. The court will generally rely on an express or implied waiver of immunity or, alternatively, the “commercial activity exception” where the state engages in commercial activity in Canada.
In what instances can third parties or non-signatories be bound by an award? To what extent might a third party challenge the recognition of an award?
An arbitral tribunal does not have jurisdiction over third parties unless, as between a party and non-party: a) the corporate relationship is sufficiently close to justify lifting the corporate veil; b) there is an agency relationship; c) a contract incorporates the arbitration agreement; or d) the non-party is bound by equitable estoppel. If a third party is bound by an award, it may take steps to challenge recognition and enforcement.
Have courts in your jurisdiction considered third party funding in connection with arbitration proceedings recently?
There has not been consideration of thirdparty funding in connection with arbitration proceedings by Canadian courts in recent years.
Is emergency arbitrator relief available in your country? Is this frequently used?
The provincial arbitration statutes, and the federal Commercial Arbitration Code, in Canada do not expressly provide for emergency arbitrator relief. Parties, however, may agree to emergency arbitrator relief through rules of various institutions operating in Canada. Statistics are not available for how frequently this relief is used but courts in Canada are supportive of this relief.
Are there arbitral laws or arbitration institutional rules in your country providing for simplified or expedited procedures for claims under a certain value? Are they often used?
Yes, some of the arbitration institutional rules provide for simplified or expedited procedures that are not mandatory and do not apply automatically but parties can agree to those procedures (for example, see ADR Institute of Canada’s Arbitration Rules). Other arbitration institutional rules provide for simplified or expedited procedures for claims under a certain value. For example, under International Centre for Dispute Resolution Canada’s Arbitration Rules, expedited procedure applies if no party’s claim exceeds US$250,000 and a dispute is to be resolved by written submissions if no party’s claim exceeds US$100,000.
Have measures been taken by arbitral institutions in your country to promote transparency in arbitration?
Yes, some measureshave been taken by some of the arbitrationinstitutions to promote transparency in arbitration. For example, under International Centre for Dispute Resolution Canada’s Arbitration Rules, the Administrator, unless the parties agree otherwise, may publish selected awards, orders, decisions and rulings that have been edited to conceal the names of the parties and other identifying details.
Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted in your country? If so, how?
Efforts are being undertaken at various levels to promote diversity in the choice of arbitrators and counsel. Examples of such efforts include diversity and unconscious bias training facilitated by arbitration organizations, proactive discussion about diversity issues in conferences and panel discussions organized by different stakeholders, and individuals and organizations signing on to the Equal Representation in Arbitration Pledge.
Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
There have not been any recent court decisions in Canada considering the setting aside of an award that has been enforced in a jurisdiction outside of Canada or vice versa. Domestically, in Shoppers Drug Mart Inc. v. Retirement Home Specialists Inc., (2019 NLSC 44), the Newfoundland and Labrador Supreme Court recently considered an application to set aside an award enforced by an Ontario court. The application was rejected on the grounds that the parties had voluntarily submitted to the laws of Ontario for the purposes of the arbitration, that there was no breach of Newfoundland’s Reciprocal Enforcement of Judgments Act, and that the conduct of the parties and terms of the agreement were not contrary to public policy.
Is corruption an issue that is regularly raised in your jurisdiction? What standard do local courts apply for proving of corruption?
No, corruption is not an issue that is regularly raised in Canada.
Have there been any recent court decisions in your country considering the definition and application of “public policy” in the context of enforcing or setting aside an arbitral award?
Over the last few years, a number of decisions from Canadian courts have considered the definition and application of “public policy” in the context of enforcing or setting aside arbitral awards.
In 1552955 Ontario Inc. v. Lakeside Produce Inc. (2017 ONSC 4933), one of the parties (JAG) sought to set aside an arbitral award pursuant to Article 34(2) of the Model Law on International Commercial Arbitration, which provides that “An arbitral award may be set aside by the court specified in article 6 only if . . . the court finds that . . . the award is in conflict with the public policy of this State.” According to JAG, numerous errors in the arbitrator’s decision undermined the integrity of the arbitration process such that its enforcement would be contrary to the public policy of Ontario (para 76). The Court rejected this submission, emphasizing that the public policy defence is intended to have narrow application to “guard against enforcement of an award which offends our local principles of justice and fairness in a fundamental way… or where there was ignorance or corruption on the part of the tribunal which could not be seen to be tolerated or condoned by our courts” (para 82). This will be the case where “enforcement would violate our ‘most basic notions of morality and justice’ (para 84). However, the public policy defence should not be employed to re-determine the merits of the claim or where the court believes that the tribunal wrongly decided a point of fact or law (para 83 and 84). Applying these principles, the Court found that the alleged errors did not meet the threshold of a conflict with public policy, and that JAG was instead attempting to re-open the merits of the parties’ dispute on factual and legal issues within the arbitrator’s jurisdiction (para 87).
In Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A. (2017 ONCA 939), the ONCA considered another application to set aside an arbitral award pursuant to Article 34 of the Model Law. In that case, the appellant argued that the arbitration award amounted to double recovery for the respondent and was therefore a penalty that offended Ontario public policy. The Court rejected the appellant’s submissions, citing the same leading cases as Lakeside and emphasizing that public policy is only engaged when enforcement of an award “offends our local principles of justice and fairness in a fundamental way” (para 99). According to the Court, the alleged double recovery “does not come close” to meeting that test (para 101).
The British Columbia Supreme Court (BCSC) also recently considered the public policy defence to the enforcement of a foreign arbitration award in Ning v. Yang (2018 BCSC 943). In its brief decision, the BCSC declined to set aside an award made by the Hainan Arbitration Commission in connection with the respondent’s failure to repay a loan. While the respondent claimed the loan’s interest rates and default penalty were excessive, the Court held that since the tribunal’s procedural and substantive rules did not diverge markedly from the rules of the BC court, and there was no evidence of ignorance or corruption, enforcement of the award was not against public policy (para 17).
Finally, in Canada (Attorney General) v. Clayton, (2018 FC 436), the Federal Court (FC) considered the application of Article 34 of the Model Code in the context of a NAFTA tribunal’s finding that Canada had violated its obligations by refusing to approve a quarry and marine terminal project. Intervenors in the case argued that enforcement of the tribunal’s decision was contrary to Canada’s public policy because of its “flagrant” errors of law. In rejecting this public policy argument, the FC pointed out that setting aside the decision on this basis would frustrate the narrow application of Article 34, and would open the door for a review on the merits (para 195). Moreover, the FC noted that the threshold for violation of public policy was “extremely high”. While this threshold was met in instances of bribery, illegality and denial of due process, the issues raised by the intervenors did not rise to this level (para 196).
Have there been any recent court decisions in your country considering the judgment of the Court of Justice of the European Union in Slovak Republic v Achmea BV (Case C-284/16) with respect to intra-European Union bilateral investment treaties or the Energy Charter Treaty? Are there any pending decisions?
No, there are no reported decisions.
Have there are been any recent decisions in your country considering the General Court of the European Union’s decision Micula & ors (Joined Cases T-624/15, T-694/15 and T-694.15), ECLI:EU:T:2019:423, dated 18 June 2019? Are there any pending decisions?