Federal – court declines to intervene regarding counsel’s alleged conflict of interest in investor-state arbitration – #398

In Geophysical Service Incorporated v. Canada (Attorney General), 2020 FC 984,  Madam Justice Martine St-Louis declined to intervene in a decision by Canada’s legal representative refusing to remove a member from the legal team representing Canada in an investor-state arbitration.  St-Louis J. held that (i) the staffing decision did not qualify as a public decision made by an entity subject to judicial review under the Federal Courts Act, RSC 1985, c F-7 and (ii) Applicants had not demonstrated the arbitral tribunal’s lack of jurisdiction to deal with the issue.  Applicants raised concerns regarding an individual newly assigned to the legal team representing Canada in the arbitration.  Applicants alleged a conflict based on that individual’s recent, prior employment relationship with the third-party funder with which Applicants had signed an agreement regarding its investor-state claim against Canada. Though St-Louis J. declined to intervene, in obiter she considered “there is little unambiguous evidence that [the individual] received information that would cause a conflict of interests”.

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Federal – successful offer in all-or-nothing final offer arbitration can include agreement to arbitrate – #392

In Canadian National Railway Company v. Gibraltar Mines Ltd., 2020 FC 1034, Mr. Justice Michael D. Manson held that, in final offer arbitration, the absence of reasons in a decision qualified the decision as reasonable and correct.  Though one party objected to the other’s final offer including an agreement to arbitrate, Manson J. held that the arbitrator had to accept either offer “in its entirety” based on which offer the arbitrator considered more reasonable.  Final offer arbitration’s “all-or-nothing” approach prevents an arbitrator from extracting reasonable terms from one offer for inclusion in the other and the Canada Transportation Act, SC 1996, c 10 prohibited the arbitrator from explaining the choice made.

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Federal – appointing authority’s breach of appointment provisions raise no reasonable apprehension of bias – #382

In Grey v. Whitefish Lake First Nation, 2020 FC 949, Madam Justice Cecily Y. Strickland dismissed challenges to an arbitrator’s decision, applying correctness as the standard of review for questions of procedural fairness, including those which encompass issues of bias.  Despite the appointing authority’s breach of the “clear and unambiguous” regulations for appointing the arbitrator, the breach was not raised on appeal and did not affect the procedural fairness of the arbitration.   The arbitrator’s previous appointment did not give rise to a reasonable apprehension of bias.

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Federal – final offer arbitration characterized as “an intentionally high risk form of arbitration” – #260

Madam Justice Ann Marie McDonald in Canadian National Railway Company v. Gibraltar Mines Ltd, 2019 FC 1650 demonstrated that the “unique nature” of final offer arbitration distinguished it from “ordinary commercial arbitration” and informed expectations of procedural fairness.  The dissatisfied party objected to the administering institution’s decision to dismiss a preliminary application but provide reasons only after the arbitration concluded.  McDonald J. held that the decision was not part of the FOA process under challenge and did not affect the fairness of the process. McDonald J. also issued a permanent order declaring certain documents, created for the arbitration, to remain confidential.

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Federal – court rules require ship owner as party in admiralty proceedings despite arbitration agreement – #257

In Norstar Shipping and Trading Ltd. v. The Rosy (Ship), 2019 FC 1572, parties to an arbitration disputed the amount of bail to be paid into court to free a ship arrested as security for the claims made in the parties’ arbitration.  The ship’s arrest was authorized by the Federal Courts Rules, SOR/98-106 which further required the seizing party to name its other arbitral party, the ship owner, as a party to the litigation.  Naming the other party did not qualify as waiver of the arbitration agreement and the parties’ argument before Madam Justice E. Susan Elliott was not considered a breach of any confidentiality agreement regarding the arbitration.

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