Commercial Arbitration

Canada

Barry Leon and Andrew McDougall

Perley-Robertson, Hill & McDougall LLP

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

    Canada is a federal state, with ten provinces and three territories. Canada became a party to the New York Convention in 1986 when it passed the federal United Nations Foreign Arbitral Awards Convention Act (the Convention). Eight of the ten provinces and all three territories have legislation implementing the Convention, in some cases enacting a statute that gives effect to the Convention and in others attaching the Convention to an existing statute as a schedule. Of the remaining two provinces, Québec gives effect to the Convention by reference to it in its Code of Civil Procedure, wherein the title on recognition and enforcement of foreign arbitral awards is to be interpreted taking the Convention into account. Ontario chose to rely only on the comparable provisions of the UNCITRAL Model Law, which was adopted as Ontario’s international arbitration statute, and therefore did not maintain its implementing legislation in force.

    Canada federally and all provinces and territories except for Ontario and Québec have made the commercial reservation limiting the effect of the New York Convention to commercial awards. No reciprocity reservations have been made at any level.

  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

    Canada is a party to the North American Free Trade Agreement (NAFTA) and over twenty-five bilateral Foreign Investment Promotion and Protection Agreements (FIPAs), which include provisions regarding the recognition and enforcement of arbitral awards. Canada has signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), but has not yet ratified it, implementing legislation having been passed federally (but not yet brought into force) and in some but not all provinces and territories.

  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

    Canada has a federal arbitration act which attaches the UNCITRAL Model Law as a schedule called the Commercial Arbitration Code. That act applies to commercial disputes that are regarding matters under exclusive federal jurisdiction or where one of the parties is the federal government or a federal corporation. All other matters fall under provincial and territorial jurisdiction and are subject to provincial and territorial arbitration acts. With the exception of Québec, all of the provinces and territories have an international arbitration act giving effect to the Model Law and a separate domestic arbitration act. Québec gives effect to the Model Law for extraprovincial and international trade matters by reference to it in its Code of Civil Procedure, wherein the title on arbitration proceedings is to be interpreted taking the Model Law into account.

  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

    ADR Chambers, the ADR Institute of Canada, the British Columbia International Commercial Arbitration Centre, and the Canadian Commercial Arbitration Centre are arbitration bodies in Canada that are relevant to international arbitration. All but the ADR Institute of Canada can act as an appointing authority.

  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?

    Foreign arbitral providers can operate in Canada. The International Chamber of Commerce, which operates the International Court of Arbitration, has a National Committee in Canada, which is the Arbitration Committee of the Canadian Chamber of Commerce. The London Court of International Arbitration has a North American Users’ Council covering Canada. The International Centre for Dispute Resolution, which has a Canadian Advisory Committee, and the CPR International Institute for Conflict Prevention & Resolution also offer arbitration services to Canadian companies.

  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?

    There is no specialist arbitration court in Canada. Courts of first instance federally and in the provinces and territories have varying levels of knowledge of international arbitration. They are generally supportive of the arbitration process. First instance courts may need to be reminded that the principles of public law which apply to domestic arbitration are sometimes different from the principles that apply to international arbitration. The courts of appeal are generally quite familiar with the law and practice of international arbitration and have rendered several landmark decisions that are supportive of arbitration. The Supreme Court of Canada is also generally familiar with international arbitration and has rendered a steady line of decisions supportive of arbitration.

    7. Agreement to arbitrate

  7. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

    The only formal prerequisite for an arbitration agreement to be recognised is that it be in writing within the meaning of the New York Convention and the Model Law. An arbitration agreement can cover future disputes.

  8. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?

    In Desputeaux v Éditions Chouette (1987) Inc, [2003] 1 SCR 178 (SCC), the Supreme Court of Canada held that almost all types of disputes are arbitrable. The court concluded that parties will not be precluded from pursuing arbitration unless it is expressly prohibited by the applicable statute or unless Canadian public policy (to be interpreted very narrowly) clearly prevents it. In the above case, the court found that copyright matters were subject to arbitration.

  9. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

    A third party non-signatory can be bound by an arbitration agreement or participate in the arbitration process if: the law provides that a non-signatory has rights and obligations of the agreement (applicable laws may be, for example, laws of representation, agency or trusteeship, or piercing the corporate veil); the agreement provides that a non-signatory has rights and obligations of a party under the agreement (for example, that successors, assigns or others named may be able to compel arbitration); or the parties have a subsequent agreement consenting to the addition of a new party. Case law on these issues in international arbitration is limited and not well developed.

  10. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

    Absent an agreement of all the parties, neither a court nor an arbitral tribunal can order the consolidation of arbitrations. In order for consolidation to occur the language of the agreement must demonstrate that there is a common intention to arbitrate all disputes between various parties in a single arbitration. If various parties have signed similar contracts for the same project and each contract contains an identical arbitration clause, a court or tribunal may find that the parties have not consented to a common arbitration if the contract does not include a clause regarding consolidated arbitration.

  11. 11.Groups of companies
    Is the “group of companies doctrine” (or any other method of piercing the corporate veil) recognised in your jurisdiction?

    There has been some recognition of a “group of companies” approach in Canada, at least in Ontario. Prior to Xerox Canada v MPI Technologies, 2006 CarswellOnt 7850 (Ont Sup Ct), parties were not typically added to an arbitration under the “group of companies doctrine.” However, in that decision the court considered Ontario’s International Commercial Arbitration Act, RSO 1990 c 19, to be broad legislation which should be given adequate interpretation. The court allowed the parent company to be added to the arbitration on the basis that the arbitration agreement contemplated involving the parent company in the resolution of disputes. In general terms, the corporate veil may be pierced where the result is “flagrantly opposed to justice”; the business was incorporated for an objectionable purpose; or the corporation is acting as a mere agent.

  12. 12.Separability
    Are arbitration clauses considered separable from the main contract?

    Arbitration clauses are considered separable from the main contract. Also, an arbitration agreement that is physically separate from the main agreement will be enforceable if the reference to the separate agreement is clear that it is an arbitration agreement that is being incorporated into the main agreement.

  13. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?

    The principle of competence-competence is recognised in Canada. In Dell Computer Corp v Union des consommateurs, [2007] 2 SCR 801 (SCC), the Supreme Court of Canada framed the “competence-competence” principle as a general rule that a challenge to the arbitrator’s jurisdiction must first be resolved by the arbitrator. The only exception is where the challenge is based solely on a question of law, in which case the court’s expertise prevails.

  14. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

    When drafting an arbitration clause in which a location in Canada will be the seat of the arbitration or the location of enforcement of an award, the recent Supreme Court of Canada decision in Yugraneft Corp v Rexx Management Corp, 2010 SCC 19 should be considered. The court held that in enforcing an award in a federal state (such as Canada) the limitation periods applicable in the province or territory in question can be applied to the enforcement of the foreign arbitral award. Thus, the court held that the enforcement of the foreign arbitral award (in that case in Alberta) was time barred because of a general two-year limitation period. The length of general limitation periods across Canada varies among the provinces and territories. Drafters may therefore wish to expressly provide for the limitation period which the parties intend to apply to the enforcement of the award. When drafting an arbitration clause in a consumer contract, the Supreme Court of Canada’s decision in Dell Computer Corp v Union des consommateurs, [2007] 2 SCR 801 (SCC) and its pending decision in Seidel v Telus Communications Inc (2009), 88 BCLR (4th) 212, 2009 BCCA 104 (BC CA), leave to appeal to SCC granted, 2009 CarswellBC 2985, should be considered.

  15. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

    In Canada, ad hoc international arbitration is not uncommon, particularly between Canadian and American parties. Institutional international arbitration is common in contracts with parties in other jurisdictions, and is becoming more and more common. The UNCITRAL Rules are often used in ad hoc international arbitrations, but so are specific agreements of the parties for their particular arbitration and sometimes local codes of civil procedure or variants thereof.

  16. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

    In multi-party arbitration agreements, all the relevant parties must be parties to the same arbitration agreement unless the same arbitration agreement is contemplated in all of the relevant contracts between the parties. If the parties consent to consolidated arbitration then the court has the authority to determine the composition of the arbitral tribunal in cases where the parties cannot agree.

    17. Commencing the arbitration

  17. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

    Arbitration is commenced, pursuant to article 21 of the Model Law, when a request for the dispute to be arbitrated is received by the other party. Canada’s international arbitration laws, which are based on the Model Law, are silent on limitation periods. Regard should be had to the limitations statutes of the relevant province or territory which vary in their time limits to commence a proceeding and in other material respects.

    It should be noted that the Supreme Court of Canada in Yugraneft Corp v Rexx Management Corp, referred to above, applied Alberta’s general limitation period of two years to a proceeding for the enforcement of a foreign arbitral award.

    18. Choice of Law

  18. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

    The parties to the arbitration can decide which substantive law will be applicable in resolving the dispute. If there is no agreement by the parties, the arbitral tribunal will determine what it should be in accordance with the principles set out in the Model Law.

    19. Appointing the tribunal

  19. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?

    No, there are no limitations in respect of a party’s choice of arbitrator in Canada. Parties may elect to choose their own arbitrators or summon institutional, third-party or court assistance. Judges may act as arbitrators. Some provincial and territorial arbitration statutes have particular provisions. For example, in Ontario, the Model Law provision on nationality and arbitrators provides that a person of any nationality may be an arbitrator.

  20. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

    There are no restrictions on the nationality of arbitrators in Canada, and the ability of a non-national to act as an arbitrator is not the subject of any particular immigration or other requirements.

  21. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

    The court may appoint an arbitrator at the request of a party where the appointment procedure agreed upon by the parties fails. In Canada, the British Columbia International Commercial Arbitration Centre (BCICAC), the Canadian Commercial Arbitration Centre (CCAC) and ADR Chambers all have structured rules of appointment. Under the rules of the BCICAC, if the parties do not agree on the number of arbitrators, the default provides for three arbitrators, unless in its discretion the centre determines that one arbitrator would be appropriate. The rules also permit the centre to appoint the arbitrator pursuant to its rules governing the method of appointment if the parties are unable to agree on an arbitrator. The CCAC rules provide default mechanisms for the number of arbitrators depending on the amount at issue in the dispute. Both the ADR Chambers Arbitration Rules and Expedited Arbitration Rules provide default mechanisms for the appointment of arbitrators. Under the regular rules, if the parties do not appoint an arbitrator within the times specified, or a reasonable period if no specific time frame is specified, then the Appointing Committee will appoint an arbitrator for the dispute. Under the Expedited Arbitration Rules, if the selection of the arbitrator is not made within 5 days after the Response has been delivered, or 10 days from the date the Notice to Arbitrate was delivered, then ADR Chambers selects the arbitrator based on the availability of arbitrators and the nature of the dispute in question. All of the Canadian arbitral institutions maintain a roster of arbitrators for their clients’ convenience, as does the Arbitration Committee of the Canadian Chamber of Commerce, which acts as the Canadian National Committee of the International Court of Arbitration of the International Chamber of Commerce.

  22. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

    Arbitrators are generally immune from actions in negligence or breach of contract. The Supreme Court of Canada has stated that in order for such immunity to apply, the arbitrator must be acting in an existing dispute that the parties have submitted to the arbitrator. Further, the arbitrator must be acting in a judicial or quasi-judicial capacity and fulfilling functions as an independent party in a manner consistent with the applicable legislation. Where the arbitrator acts more like a valuer, quasi-valuer, or mediator, blanket immunity may not apply. And while an arbitrator will be immune from a negligence or breach of contract suit where the above-mentioned factors are present, intentional or bad faith actions on the part of an arbitrator could attract liability. Most arbitral institution rules exempt both the arbitrator and the institution from liability except in the case of a wrongful act.

  23. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

    While there are no particular mechanisms or bodies in place in Canada to secure the payment of an arbitrator’s fees, all arbitral institutions require a deposit in respect of costs before the arbitration can proceed. Ad hoc tribunals have the authority to order both sides to provide security for the arbitral tribunal’s fees and disbursements. The issue of costs has been held to be procedural and therefore falls within the arbitral tribunal’s power to make decisions regarding its own procedure.

    24. Challenges to arbitrators

  24. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

    The grounds upon which an arbitrator may be challenged are those set out in the Model Law, namely if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence or if the arbitrator does not possess qualifications agreed to by the parties. The challenge procedure is as set out in the Model Law, namely the challenge is made first to the arbitral tribunal and subsequently can be made to the court. The rules of both the BCIAC and the CCAC provide a role for the institution in deciding challenges to an arbitrator. While there is no requirement to do so, the IBA Guidelines on Conflicts of Interest in International Arbitration are generally taken into account to some degree.

    25. Interim relief

  25. 25.Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

    Canadian case law concerning anti-suit injunctions within the international arbitration context is limited. In three cases an application for such relief was dismissed (Donaldson International Livestock Ltd v. Znamensky Selekcionno-Gbridny Center LLC 2007 CarswellOnt 9654 (Ont Sup Ct), aff’d 2008 ONCA 872 (Ont CA); BMO Nesbitt Burns Securities Ltd. v. McLellan, 2007 NBQB 240, 2007 CarswellNB 336 (NB QB); Frank Jonkman & Sons Ltd. v. DGT-Volmatic A/S, 2004 CarswellOnt 2116 (Ont SCJ)) In two other cases, an anti-suit injunction was granted:

    In the first case, Dent Wizard International Corp. v. Brazeau, 1998 CarswellOnt 4895, 31 CPC (4th) 174 (Ont Ct J, Gen Div), an Ontario court granted injunctive relief to restrain a plaintiff from pursuing an American Arbitration Association arbitration in Missouri. The defendant had signed a secrecy agreement with the plaintiff while undergoing training, but then left and began competing with the plaintiff's business. The plaintiff had already commenced an action in Ontario, which was well underway, and the judge felt it would be unjust for the defendant to have to respond to both proceedings, and decided that the plaintiff would suffer no injustice if the injunction was granted.

    In the second case, Lac d’Amiante du Canada ltee c. Lac d’Amiante du Quebec ltee, 1999 CarswellQue 2752, REJB 1999-13747, (Qc CS) aff’d 1999 CarswellQue 3688, REJB 1999-15419 (Qc CA), a Québec court granted an anti-suit injunction to prevent an ICC arbitration in New York from going forward. The court did so based on the fact that the parties, who had been involved in a long drawn-out legal battle concerning the purchase and transfer of mining rights, had both mutually renounced arbitration at an earlier stage of the litigation, and therefore the fact that one party wanted to change their position and pursue arbitration anew constituted improper “forum-shopping”. The court held that no injustice would be suffered and that the Québec Superior Court had sole jurisdiction. The Québec Court of Appeal upheld the decision.

    The issue of anti-suit injunctions generally, not specifically involving international arbitration, was addressed by the Supreme Court of Canada in Amchem Products Inc v British Columbia (Workers Compensation Board) [1993] 1 SCR 897 (SCC). In that case, the Supreme Court overturned an injunction granted in British Columbia barring Canadians from bringing a claim in Texas. However, the court did state that such an injunction may be granted to prevent “serious injustice”.

  26. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

    In JaffaSweet Juices Ltd v Michael Firestone & Associates, [1997] OJ No. 4585 (Ont Ct J Gen Div), an Ontario court held that making an order for security for costs is procedural and is therefore within the arbitrator’s power. While most arbitral tribunals agree that they have the authority to order security for costs, they often decline to make such orders. The power to grant security for costs can also derive from the arbitration agreement.

    27. Procedure

  27. 27.Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (e.g. general duties of the tribunal and/or the parties)?

    The rules of procedure that govern the conduct of arbitration in Canadian jurisdictions are those set out in the Model Law. The arbitral tribunal has the power to determine its own procedure, subject to any agreement of the parties and as long as it is in accordance with the mandatory provisions of the relevant legislation.

  28. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

    Under article 25 of the Model Law, if a respondent fails to provide a statement of defence or appear at a hearing, the tribunal may continue the proceedings without that party and make an award on the basis of the evidence before it. Failure to provide a statement of defence is not construed as an admission of the facts alleged in the statement of claim.

  29. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?

    The Model Law provides that the arbitral tribunal may determine the admissibility, relevance, materiality and weight of any evidence before it, and, as noted above, the arbitral tribunal has the authority to determine the procedure in the arbitration. The IBA Rules of Evidence on the Taking of Evidence in International Commercial Arbitration are sometimes specifically used and often taken into account with regard to the taking of evidence.

  30. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?

    Courts will assist in the obtaining of evidence for an arbitration. Article 27 of the Model Law provides that an arbitral tribunal can seek the assistance of the court in taking evidence.

  31. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

    The Model Law does not directly address document production and therefore the power of the arbitral tribunal to determine its own rules of procedure applies to document production. In practice, regard is had to the documentary production provisions of the IBA Rules of Evidence on the Taking of Evidence in International Commercial Arbitration.

    If testimony or documents are sought from out of the jurisdiction, the method to compel the evidence under the Model Law is to apply for letters rogatory (letters of request). The application is made to the court and addressed to the court in the jurisdiction in which the witness resides or the documents are located.

  32. 32.Hearings
    Is it mandatory to have a final hearing on the merits?

    Pursuant to article 24 of the Model Law, the arbitral tribunal will decide, subject to any agreement by the parties, whether it will hold an oral hearing. If any party requests a hearing, it must be held.

  33. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

    Hearings and procedural meetings may be conducted elsewhere in an arbitration seated in a Canadian jurisdiction, as provided for in article 20(2) of the Model Law.

    34. Award

  34. 34.Majority decisions
    Can the tribunal decide by majority?

    As provided by the Model Law, decisions shall be made by the majority of an arbitral tribunal where there is more than one arbitrator, unless the parties have agreed otherwise. One arbitrator may make procedural decisions if the parties or all members of the arbitral tribunal agree.

  35. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

    The arbitral tribunal may grant monetary, equitable remedies, partial awards, punitive damages, and rectification. The power to grant such relief is derived from the Model Law and the arbitration agreement. There are certain statutory remedies that provide that the “court” is authorised to grant relief. The availability of such remedies will depend on the interpretation or definition of the word that is applied in that statute. One such example is the corporate law oppression remedy. In Woolcock v Bushert, (2004) 246 DLR (4th) 139; 192 OAC 16, (Ont CA), the Ontario Court of Appeal held that an oppression remedy can be brought in an arbitration. In Acier Leroux Inc v Tremblay, [2004] RJQ 839 (Q CA), the Québec Court of Appeal held that, while the arbitration clause at issue did not allow for the arbitration of shareholders rights, the oppression remedy is, generally, arbitrable. There is other authority to like effect. However, the British Columbia courts held, in Cut & Run Holdings Ltd v Booze Brothers Holdings Inc, 2005 BCSC 167 (BC SC), that while an arbitrator can likely determine if there has been oppression, due to the specific wording in the provincial legislation it is for the “court” to grant the remedy.

  36. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

    Dissenting opinions are permitted and can be appended to the award. Dissenting opinions sometimes are issued.

  37. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?

    In order for an award to be legal and enforceable, it must be in writing, decide only the matters submitted, provide reasons for the decision, provide the location and date the award was made, be signed by all the arbitrators or a majority as long as any omission is explained, and be delivered to all parties to the arbitration. There is no requirement that an award be made within a specific period of time.

  38. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

    Pursuant to the Model Law, the parties may request the arbitral tribunal to correct or interpret an award within 30 days of their receipt of the award, unless they have agreed upon a different time frame. If the arbitral tribunal finds the request to be meritorious, it shall make the correction or provide the interpretation within 30 days of the receipt of the request or within such an extended period as it deems necessary.

    Provincial and territorial limitation periods should be considered given that the Supreme Court of Canada, in Yugraneft Corp v Rexx Management Corp, 2010 SCC 19, held that a limitation period may apply to the recognition and enforcement of an arbitral award based on the provisions of the particular limitations statute (see question 14 for further detail). Provincial and territorial limitation periods in Canada range from one to 20 years depending on the province or territory and the nature of the cause of action. It is not clear the extent to which Ontario’s limitation periods apply to arbitrations.

    39. Costs and interest

  39. 39.Costs
    Are parties able to recover fees paid and costs incurred? Does the “loser pays” rule generally apply in your jurisdiction?

    Parties are able to recover fees paid and costs incurred, and the “loser pays” rule generally applies. The Model Law does not address the issue of costs, and the provincial and territorial legislation in Canada enacting the Model Law has not modified this, with the exception of British Columbia. Under British Columbia’s International Commercial Arbitration Act, RSBC 1996 c 233, costs can be awarded, unless the parties agree otherwise, for legal fees, fees and expenses of the arbitrators and expert witnesses, administration fees and any other expenses that the parties incur in connection with the arbitration. In institutional arbitrations, the issue of costs is determined by the institution’s rules and all institutions provide for the award of costs. In practice, it is common for arbitrators to award costs to the prevailing party, as is the practice in the Canadian court system.

  40. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

    Interest can be included on the principal claim. With the exception of British Columbia, the international arbitration statutes in Canada do not deal with interest. Under British Columbia’s International Commercial Arbitration Act, the Model Law has been modified to provide that the arbitral tribunal has the power to award interest subject to contrary agreement by the parties. Generally, an arbitral tribunal may have the power to award interest based on the contract at issue, the arbitration agreement, or the substantive law applicable to the dispute. There is no mandatory or customary rate of interest for international arbitration in Canada.

    41. Challenging awards

  41. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

    Pursuant to the Model Law, a party can challenge an award by bringing an application to the court to set it aside on grounds of: lack of jurisdiction, excess of jurisdiction, contrary to public policy, or lack of proper procedure (ie, a party is under some incapacity, a party is not given proper notice, or the composition of the tribunal or the procedure is not in accordance with the agreement of the parties).

  42. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?

    The only grounds to challenge an award are those found in the Model Law.

  43. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

    There is very limited case law on the issue of contracting or expanding the grounds for modifying or setting aside an arbitral award. In Noble China Inc v Lei (1998) 42 OR (3d) 69 (Ont Ct J Gen Div), an Ontario court held that the grounds can be contracted. The parties had agreed that they could only bring a proceeding to enforce an award. The court held that they had contracted out of the Model Law right to apply to set aside an award. The judge, admitting her observations were probably obiter dicta, concluded that the parties could derogate from article 34 of the Model Law because it is not a mandatory provision.

    44. Enforcement in your jurisdiction

  44. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

    Generally, if a foreign jurisdiction sets aside an award on a ground not recognised by the New York Convention or the Model Law, the enforcing jurisdiction has discretion to enforce the award. In Schreter v Gasmac Inc (1992) 7 OR (3d) 608 (Ont Ct J Gen Div Comm), the court held that it had discretion to enforce an award notwithstanding that the award may be under attack at the place of arbitration. The court noted that setting aside an award on the grounds of public policy must only be done when it “offends our local principles of justice and fairness in a fundamental way” and thus is a narrow exception. Conversely, in Powerex Corp v Alcan In. 2004 BCSC 876 (BC SC), a British Columbia court adjourned the Canadian enforcement proceedings because a party to the arbitration had asked the court at the seat of the arbitration to set it aside. The court did so on the condition that the respondent pay into court the full amount of the award. Leave to appeal was granted on the grounds that this was the most liberal interpretation so far in Canada and that it could constitute a marked departure from international jurisprudence. However, the appeal was never heard since the matter was settled.

  45. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

    The trend in Canada, supported by the Supreme Court of Canada, is that courts generally enforce arbitral awards and show deference to arbitral tribunals and the arbitral process.

  46. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

    Generally, a state’s submission to arbitration is an implicit waiver of its immunity from suit, but not a waiver of its immunity from enforcement of the award or execution. If a state has not waived its immunity from enforcement or execution, a state or state entity may successfully raise a defence of state or sovereign immunity at the enforcement stage. Section 12 of Canada’s State Immunity Act, RSC 1985, c S-18, sets out the general principle that property of a foreign state located in Canada is immune from execution unless immunity from enforcement has been waived; or the property is used or meant for a “commercial activity”; or the execution relates to a judgment establishing rights in property acquired by succession or gift or in immovable property.

    47. Further considerations

  47. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?

    Arbitration is private and is generally understood to be confidential although there is very limited court consideration of the issue and no legislation. The confidentiality of arbitration was confirmed by an Ontario court in Telesat Canada v Boeing Satellite Systems International Inc, 2010 ONSC 22 (Ont Sup Ct), where the court ordered a partial sealing order covering a large number of documents produced in an arbitration that were being filed in support of an application to set aside a previous procedural order. The decision contains strong statements in support of confidentiality in arbitration.

  48. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

    The issue of the confidentiality of evidence produced and pleadings filed in an arbitration was considered specifically by an Ontario court in Canada in the Telesat Canada decision (referred to in question 47). Confidentiality is often provided for in the arbitration rules chosen or is provided for in the arbitration agreement, the parties’ contract, or the procedural rules for the arbitration established by the arbitral tribunal.

    The law in Canada recognises a deemed undertaking, codified in court rules in some jurisdictions in Canada, providing that a party in court proceedings receiving documents under the production (disclosure) processes is deemed to have undertaken not to use them for any purpose other than the court proceeding. It has not been considered whether the deemed undertaking applies in arbitration.

  49. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

    There are no ethical codes or professional standards in Canada that apply specifically to arbitrators or counsel in international arbitration. However, a licensed member of one of the provincial and territorial law societies or bars, is subject to ethical and professional obligations set by the law society or bar when acting in a regulated capacity in connection with an international arbitration. The Canadian Bar Association’s Code of Professional Conduct applies to all Canadian lawyers, and has an appendix called the Principles of Civility for Advocates which applies to arbitrators as well. The International Bar Association has Codes of ethics and conduct and Guidelines, although these are not subject to enforcement or discipline but sometimes may be referred to.

  50. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

    There are no particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration seated in Canadian jurisdictions need be aware beyond what is provided for in the Model Law.

Law Business Research Ltd

87 Lancaster Road, London
W11 1QQ, UK
Queen's Award logo International Bar Association logo American Bar Association strategic partner logo

Copyright © 2012 Law Business Research Ltd. All rights reserved. | http://www.lbresearch.com

87 Lancaster Road, London, W11 1QQ, UK | Tel: +44 207 908 1188 / Fax: +44 207 229 6910

http://www.globalarbitrationreview.com | editorial@globalarbitrationreview.com