Québec – application for referral to arbitration has no autonomous status once plaintiff discontinues action – #483

In Gagné v. Gagné, 2021 QCCA 823, Québec’s Court of Appeal agreed that defendants’ application for referral to arbitration did not qualify as a cross-demand and the court was not seized of that application as an independent claim. Plaintiff had discontinued his action after the parties had pleaded defendants’ application for referral and during advisement. The Court held that defendants could not require the court to issue a decision after plaintiff filed the discontinuance. The court faced a juridical void given that there was no dispute to refer to arbitration and had no basis to conclude that defendants had acquired rights to have a decision on a referral to arbitration of a matter which had already terminated. The Court qualified an application for referral as limited to contestation of plaintiff’s action and, without that action, had no distinct or autonomous status in regard to a right invoked by defendants.

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Québec – attempt dismissed to limit arbitral jurisdiction by presumption statutory recourse excluded unless expressly included – #476

In Valiquette v. PL Nouvelle France Inc., 2021 QCCS 1096, Madam Justice Florence Lucas followed the lead recently set out in Groupe Dimension Multi Vétérinaire Inc. v. Vaillancourt, 2020 QCCS 1134 which dismissed attempts to limit an arbitral tribunal’s jurisdiction by way of presumption that statutory recourses were excluded unless expressly included.  Lucas J. held that an arbitrator’s jurisdiction extends to all disputes relating directly or indirectly to the contract in which the agreement to arbitrate is contained, unless from its wording or the context a real intention by the parties to limit its scope.  Lucas J. held that nothing in the agreement to arbitrate – which defined ‘Dispute’ in ‘excessively broad terms’ – or in the context of the matter permitted inferring the parties’ intention to limit the scope of their agreement to arbitrate or to exclude the oppression remedy from an arbitrator.  Relying on the record before her, Lucas J. also definitively determined the issue of jurisdiction and referred the parties to arbitration.

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Québec – fair administration of justice of complex construction dispute requires some litigants to arbitrate -#473

In four (4) court files involving five (5) litigants, Mr. Justice Bernard Synnott in Transport Richard Meloche Inc. v. Constructions Innovo Inc., 2021 QCCS 605 dismissed court litigation between two (2) of the litigants G and C and referred them to arbitration.  Three (3) court files had already been joined for proof and hearing by an earlier court decision and G had successfully applied to intervene in and file an action in warranty in one (1) file and filed a cross-claim in another.  Synnott J. resisted G’s arguments that enforcing its agreement to arbitrate would not favour the fair administration of justice. [informal translation] ‘If arbitration clauses had to be put aside each time several disputes arose from the performance of a construction contract, mandatary arbitration clauses would rapidly become obsolete and superfluous’.  Synnott J. dismissed argument raising the potential for contradictory decisions and held G to its bargain. [informal translation] ‘In any event, the Court is of the opinion that it would be contrary to the interests of justice and its fair administration to deprive the parties of a process for dispute resolution, namely by way of arbitration, which they themselves chose and to which they freely agreed to submit by way of contract’.

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Québec – breach of public order involves outcome of award, not mistake in application of rules of public order – #466

In Perreault v. Groupe Jonathan Benoît, 2021 QCCS 1350, Mr. Justice Peter Kalichman dismissed an application to annul an award based on alleged breaches of public order. Kalichman J. held that [informal translation] ‘[t]o annul an award or to oppose its homologation on the ground that it is contrary to fundamental principles of public order, a party must do more than simply demonstrate that the arbitrator committed a mistake in the application of the rules of public order. It must demonstrate that the result itself is incompatible with public order’.  Kalichman J. relied on Desputeaux v. Éditions Chouette (1987) inc., 2003 SCC 17 (CanLII), [2003] 1 SCR 178 to underline that (i) the courts’ consideration of an alleged breach of public order focused on the outcome of the award and (ii) an error in interpreting a mandatory statutory provision would not provide a basis for annulling the award as a violation of public order, unless the outcome of the arbitration was in conflict with the relevant fundamental principles of public order.

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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”. 

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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.

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