Ontario – majority shareholder referring contract interpretation to arbitration is not oppressive conduct

In Richcraft Homes Ltd. v. Urbandale Corporation et al., 2020 ONSC 411, Mr. Justice Robert J. Smith dismissed a minority shareholder’s action which alleged oppression based on a majority shareholder requesting a legal opinion favourable to its interests and then submitting the interpretation to arbitration.  Smith J. held that any party to a commercial agreement, including a majority shareholder, is entitled to seek a legal opinion concerning interpretation its rights under a contract and, instead of acting illicitly on any interpretation, refer interpretation of the contract to arbitration.

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Ontario – reliance on theories not pleaded/argued are errors and have ripple effects throughout award

In Tall Ships Landing Devt. Inc. v. City of Brockville, 2019 ONSC 6597, Madam Justice Sally Gomery held that deference for arbitrators and discretion over procedural matters do not displace the imperatives of fairness and reliability which underpin arbitration.  Despite a standard of reasonableness applicable to commercial arbitration awards, reliance on a legal theory not advanced or argued by the parties is an error of law and leads to conclusions outside the arbitrator’s mandate.  Errors early in the award undermined later, otherwise reasonable determinations made in the same award but which rested on those earlier determinations.  Rather than vary, set aside or remit the awards with directions, Gomery J. solicited submissions to determine the appropriate remedy at a future hearing.

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Alberta – participation in court proceedings prior to stay application waives mandatory arbitration

In Agrium, Inc. v. Colt Engineering Corporation, 2020 ABQB 53, Master J.T. Prowse held that he had discretion to refuse a stay in favour of mandatory arbitration and could do so on the basis of unfairness to plaintiff stemming from the applicants’ participation in court proceedings.  That participation, though minimum, coupled with two (2) years of delay, lead Master Prowse to conclude that it would be unfair to plaintiff to allow defendants to “go back on their choice to participate in this litigation”.

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Ontario – court revisits/reverses prior decision which allowed new evidence on post-award jurisdictional challenge

In The Russia Federation v. Luxtona Limited, 2019 ONSC 7558, Mr. Justice Michael A. Penny held that a party to a challenge of an arbitral tribunal’s jurisdiction under articles 16 and 34 of the UNCITRAL Model Law on International Arbitration may not file fresh evidence as of right.  A party must obtain leave to do so by providing a “reasonable explanation” for why new evidence is necessary, including why that evidence was not, or could not have been, put before the tribunal in the first place.  Abiding by the Mexico v. Cargill, Incorporated, 2011 ONCA 622 approach restricting courts to a “review” and not a trial de novo, Penny J. held that competence-competence was best served by requiring parties to put their “best foot forward” before the arbitral tribunal and not re-try the jurisdictional issue with additional evidence informed by hindsight.

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B.C. – B.C. court acknowledges but declines to follow reasoning in Heller v. Uber Technologies Inc.

In A-Teck Appraisals Ltd. v. Constandinou, 2020 BCSC 135, Madam Justice Mary A. Humphries expressly noted but declined to follow the reasoning in Heller v. Uber Technologies Inc., 2019 ONCA 1 (leave to appeal granted Uber Technologies Inc., et al. v. David Heller, 2019 CanLII 45261 (SCC), under advisement following the November 6, 2019 hearing).  Recognizing the Ontario Court of Appeal as a persuasive authority whose judgments merit respect, Humphries J. held it was “not obvious” that its reasoning applied to B.C. legislation and the unfairness informing that result did not arise on the facts before her.  She refused to void an arbitration agreement in an employment contract and, in doing so, granted a stay.

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