B.C. – non-parties to agreement to arbitrate granted stay of counterclaim along with plaintiff – #459

Pursuant to section 7(2) of the Arbitration Act, SBC 2020, c 2 and section 10 of Law and Equity Act, RSBC 1996, c 253, Madam Justice Carla L. Forth in Kwon v. Vanwest College Ltd., 2021 BCSC 545 stated a Defendant’s counterclaim against Plaintiff and non-parties to the agreement to arbitrate,.  Forth J. relied on (i) precedent adopting a generous interpretation of “arising out of” in the agreement to arbitrate, (ii) the intertwined, overlap of factual matrices and (iii) avoidance of multiple proceedings and inconsistent decisions to grant a stay in regard to Plaintiff and to include the arbitral non-parties as defendants to that counterclaim. Defendant requested Forth J. also stay Plaintiff’s claim against it on the basis that Defendant sought an equitable set-off.  Forth J. refused, considering that the parties’ claims did not arise out of the same matter and that, even if Defendant’s counterclaim arose out of the same contract giving rise to Plaintiff’s claim, the counterclaim did not go to the “root” of Plaintiff’s claim.

Continue reading “B.C. – non-parties to agreement to arbitrate granted stay of counterclaim along with plaintiff – #459”

Ontario – jurisdiction involves whether arbitrator has authority to make inquiry, not the answer to the inquiry – #458

In Parc-IX Limited v. The Manufacturer’s Life Insurance Company, 2021 ONSC 1252, Mr. Justice Markus Koehnen distinguished between an objection to jurisdiction and an appeal because one does not agree with answer made within that jurisdiction.  “Jurisdiction is determined not by asking whether the arbitrator made a correct decision but by asking whether the arbitrator had authority to make the inquiry he made”. Koehnen J. recharacterized Applicant’s challenge to the award. “What [Applicant] really complains about here is not the arbitrator’s jurisdiction to make the inquiry but the arbitrator’s answer to the inquiry.  That, however, is beyond the purview of a jurisdictional review”.  Koehnen J. also dismissed Applicant’s attempt to impose an arbitrator’s exercise of discretion in a costs award issued in 1990 on another arbitrator’s exercise of his discretion in 2020. Koehnen J. held that the 1990 determination was based on the exercise of discretion applied to circumstances of that case and it would be an improper exercise of discretion to determine costs in 2020 simply by applying the result arrived at in 1990.  Koehnen J. also noted differing treatments of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 but supported applying the correctness standard to a review of an arbitrator’s award for reasons set out at para. 72 of Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation.

Continue reading “Ontario – jurisdiction involves whether arbitrator has authority to make inquiry, not the answer to the inquiry – #458”

Québec – claimants lack juridical interest to execute on provisional measure ordering respondent to advance arbitration costs – #457

In Mehmedov v. Balabanian, 2021 QCCS 733, Madam Justice Guylène Beaugé quashed a seizure in execution made by arbitral parties purporting to enforce an arbitrator’s interim measures order requiring the other arbitral party to advance funds for his share of arbitration fees.  Beaugé J. held that the seizure as irregular and premature.  Though the Superior Court had homologated the arbitrator’s interim measures, the arbitral parties lacked a juridical interest as judgment creditor sufficient to justify a seizure executing on that court decision. Beaugé J. acknowledged the seizing parties’ economic interest in having the arbitrator’s fees advanced but determined that their interest did not qualify as a juridical interest.  The arbitral parties were not judgment creditors and, having omitted to advance those fees on behalf of the other defaulting arbitral party, were not subrogated for the arbitrator. 

The background to the parties’ dispute and procedural history in their arbitration, including defined terms, appears in more detail in the preceding Arbitration Matters note “Québec – court homologates arbitrator’s provisional measures ordering respondent to pay share of arbitration costs – #456”. 

Continue reading “Québec – claimants lack juridical interest to execute on provisional measure ordering respondent to advance arbitration costs – #457”

Québec – court homologates arbitrator’s provisional measures ordering respondent to pay share of arbitration costs – #456

In Mehmedov v. Balababian, 2020 QCCS 3254, Mr. Justice Jeffrey Edwards homologated three (3) provisional measures ordered by an arbitrator requiring an arbitral party to pay that party’s (i) 80% proportionate share of school and municipal taxes, (ii) 80% of financial audit related to the disputed administration of the building held in co-ownership by the parties and (iii) 50% share of the arbitration costs.  Based on the record presented to him, the arbitrator had determined that such measures were necessary in order to safeguard rights in issue and reserved the parties right to revisit them once the merits had been determined. 

For a related decision involving a successful application to quash a seizure executed by the other arbitral parties to enforce payment of the 50% arbitration costs, see the Arbitration Matters note “Québec – claimants lack juridical interest to execute on provisional measure ordering respondent to advance arbitration costs – #457” regarding Mehmedov v. Balabanian, 2021 QCCS 733.

Continue reading “Québec – court homologates arbitrator’s provisional measures ordering respondent to pay share of arbitration costs – #456”

Alberta – arbitrator’s breach of procedural fairness in costs award leads to set aside of award on merits – #455

In Ostergaard v. Uhl, 2020 ABQB 789, Madam Justice Sandra L. Hunt McDonald set aside an award on the merits and its corresponding costs award after determining that the costs award involved a breach of procedural fairness stemming from how the arbitrator determined costs.  Recognizing that arbitral tribunals have “extended leeway” to determine their own procedure under section 20 of the Arbitration Act, RSA 2000, c A-43 in order to “ensure, in part, a workable ‘fit’ to address both the needs of the parties before them and the specific issues in play”, Hunt McDonald J. observed that such leeway “does not provide the ability to disregard the rules of natural justice”.  Due to “a flood” or “onslaught” of submissions by A following the award on the merits, the arbitrator acknowledged significant inconsistencies involving how he calculated certain inputs “going to the very heart of the contractual dispute” and decided that procedurally their revisions would only be accounted for as an offset to the costs award.  In doing so, Hunt McDonald J. held that the arbitrator constructed a process procedurally unfair to A and his costs methodology bestowed a relative advantage upon R to the detriment of A.

Continue reading “Alberta – arbitrator’s breach of procedural fairness in costs award leads to set aside of award on merits – #455”

Alberta – appeal court suggests parties arbitrate lingering dispute over chambers decision if lacking clarity – #454

In MEG Energy Corp v Canexus Corporation, 2021 ABCA 101, the Court of Appeal upheld a chambers judge’s analytical approach to determining ownership of disputed equipment but disagreed with his reliance on unsworn and insufficient evidence when applying the approach.  The Court left it to the parties to consider whether the chambers judge’s reasons provided “sufficient clarity” to determine ownership but, if not, (i) directed them to either return to the chambers judge or (ii) suggested they determine the issue by arbitration as set out in their contract.

Continue reading “Alberta – appeal court suggests parties arbitrate lingering dispute over chambers decision if lacking clarity – #454”