Applicable requirements as to the form of arbitral awards
Applicable legislation as to the form of awards
1 Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?
Article 31 of the International Commercial Arbitration Act (ICAA) in both Ontario and British Columbia provides that an award must be in writing and signed by the arbitrators. In proceedings in Ontario with more than one arbitrator, the signatures of the majority of the tribunal is sufficient but the reason for any omitted signature must be provided. The award must state the date and place of the arbitration and set out the reasons; however, parties can agree that no reasons should be given. The award must be delivered to each party.
Arbitrations often settle prior to the conclusion of the hearing. If that happens, both the UNCITRAL Model Law and the rules of Ontario and British Columbia provide that the parties can ask the arbitration panel to write an award reflecting the settlement. That makes the settlement binding on all parties to the arbitration and subject to enforcement in other jurisdictions.
Neither the Model Law nor the provincial rules have any provisions regarding the timing of an award. However, Rule 46 of the ICSID Rules provides that an award shall be drawn up and signed within 120 days of closure of the proceeding, although the tribunal may extend this by a further 60 days if it would otherwise be unable to draw up the award.
Arbitration proceedings terminate with the delivery of the final award; however, they can terminate earlier. Both the Model Law and the Ontario and British Columbia rules provide that the proceedings may terminate earlier if the parties agree to terminate, or the tribunal determines that continuing the proceedings is either unnecessary or impossible.
Applicable procedural law for recourse against an award
Applicable legislation governing recourse against an award
2 Are there provisions governing modification, clarification or correction of an award?
The Model Law provides that mistakes, including clerical, typographical or computational errors, may be corrected. This must be done within 30 days of receipt of the award unless the parties agree to a longer term.
Section 44 of the Ontario Arbitration Act 1991 and Article 33 of the Model Law, which is attached to the Ontario International Commercial Arbitration Act, grants arbitrators the right to correct typographical errors, errors in calculations and similar errors in awards. Section 44(2) grants the right to correct an injustice caused by an oversight by the tribunal. Finally, Section 44(3) grants the authority for a tribunal to make an additional award to deal with a claim that was presented in the arbitration but omitted from the earlier award.
Article 33 of the Model Law contains a much narrower power to amend an award. The tribunal has no broader power without agreement by the parties. Article 33 states that, provided the parties agree, the tribunal may offer an interpretation on a specific point or part of the award. It also states that if one party applies, the tribunal may make an additional award regarding claims presented in the arbitration but omitted from the award.
The leading cases are the British Columbia Court of Appeal decision in Westnav Container (2010, 315 DLR (4th) 649) and the Ontario decision in Canadian Broadcasting Corp (1997, 34 OR (3rd) 493). These cases struggle to define the difference between an error and a rewrite of a decision.
Under the ICSID Rules, if a party later discovers some fact that was not known to that party or the tribunal at the time the award was rendered, despite due diligence, and that fact would have decisively affected the award, the party can apply to have an award changed through a process known as revision or reconsideration. A party also has a right to apply for annulment of an award on procedural grounds.
Two decisions deal with the question of whether tribunals under the ICSID Rules can reconsider final decisions: Perenco v. Ecuador, ICSID Case No. ARB/08/6; Standard Chartered Bank v. Tanzania, ICSID Case No. ARB/10/20. In Perenco, a notice of motion was filed for reconsideration of the decision. The tribunal permitted the motion to proceed but emphasised that only in exceptional circumstances would it reconsider a previous decision. The argument was that the tribunal had repeatedly refused to determine certain issues. In the end, the tribunal found that it was not prepared to reconsider. In Standard Chartered Bank, the claimant requested reconsideration based on the receipt of new information. The tribunal found that it did not have jurisdiction to reconsider the prior decision.
Appeals from an award
3 May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?
Provincial legislation provides that an arbitration order can be appealed only on a question of law with leave of the court. For example, Section 31 of the British Columbia Arbitration Act provides that a party to an arbitration can appeal to the court on any question of law arising from an award if all parties to the arbitration consent or the court grants leave. Section 31 provides that the court may grant leave if it determines that the importance of the result justifies its intervention, the determination of the point of law may prevent a miscarriage of justice and the point of law is important to both the applicant and the general public.
The Ontario Arbitration Act of 1991 contains a similar provision in Section 45, that a court will grant leave to appeal only if the court is satisfied that the issue is important to the parties and significantly affects the rights of the parties. The two leading cases are the Supreme Court of Canada decisions in Sattva Capital (2014 SCC 53) and Teal Cedar (2017 SCC 32). The British Columbia Court of Appeal decision in Richmont (2018 BCCA 452) also confirms that courts grant leave only in the clearest of circumstances.
The Model Law, which underlies all provincial legislation dealing with arbitrations, limits challenges to very narrow grounds. Article 34 thereof governs applications to set aside all international commercial arbitrations seated in Canada and any attempts to refuse enforcement of awards from tribunals seated outside Canada. Article 34(2) provides that an award may be set aside only if:
- an applicant furnishes proof of:
- the incapacity of the party or the invalidity of the arbitration agreement;
- lack of notice or denial of opportunity to present its case;
- excess of jurisdiction; or
- the arbitral procedure not being in accordance with the agreement; or
- the court finds that:
- the subject matter is not arbitrable; or
- the award is against public policy.
Note that there is no scope for any review on grounds of error of law or fact (Canada v. SD Myers  3 FCR 368 (SD Myers)) and failure to object in the arbitration may be a waiver of rights. Article 16(2) provides that a plea that the tribunal lacks jurisdiction must be raised no later than the statement of defence or as soon as a matter alleged to exceed jurisdiction is raised. This may preclude later challenges to the award (SD Myers).
Note also that there is a presumption that a tribunal has acted within its jurisdiction (Corporacion Transnacional (2000) 49 OR (3rd) 414 (CA)). As previously stated, the Canadian courts continually reinforce the notion that arbitral tribunals are entitled to significant judicial deference (Nippon Steel Corp  WWR 219 CA)).
Canadian courts rarely allow set-asides on the grounds of public policy. In Corporacion Transnacional, the court stated that public policy does not refer to Canada’s political or international position but to fundamental principles of justice. There have been attempts to argue that ‘manifest disregard of law’ should be a ground but so far that argument has been unsuccessful.
Appeals, set-asides and reconsiderations all take place after an award has been granted. Some attention should be paid to the early dismissal provisions. For example, Rule 41 of the ICSID Rules provides for a preliminary objection of any claim that is not within the jurisdiction of ICSID or the tribunal. Any objection must be filed within the time limit fixed for filing the counter-memorial. If a tribunal decides that a dispute is not within the jurisdiction of ICSID or within its own competence, or that the claims are manifestly without legal merit, it must render an award to that effect.
Applicable procedural law for recognition and enforcement of arbitral awards
Applicable legislation for recognition and enforcement
4 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?
Canada is a federal jurisdiction with 10 provinces and three territories. Each has separate statutes for dealing with both domestic and international arbitration. The New York Convention and the UNCITRAL Model Law are incorporated into international arbitration legislation. In fact, Canada and its provinces were among the first jurisdictions in the world to enact legislation expressly implementing the Model Law. Further, the domestic provincial legislation is generally based on the Model Law.
Federal legislation also governs domestic arbitration, which is also based on the Model Law. The federal Commercial Arbitration Act only applies when the Crown in the right of Canada, a government department or a federal Crown corporation is a party or the dispute relates to a matter exclusively under federal jurisdiction, such as maritime or intellectual property law.
In Quebec, Canada’s only civil law jurisdiction, both domestic and international arbitration is governed by the Civil Code of Quebec (Books 5 and 10) and the Quebec Code of Civil Procedure (Book 7).
To enforce foreign or domestic awards, an application is usually made on notice to the court that has jurisdiction over the arbitration. Applications on matters governed by provincial law are made to the Superior Court of first instance. Subject matter governed by federal law falls within the jurisdiction of the Federal Court Trial Division.
There are no material differences between the language of Article V(2)(b) of the New York Convention and Article 36(1)(b) of the Model Law, on the one hand, and the language adopted by the Canadian provinces, on the other.
Canadian courts take a deferential approach to the enforcement of international arbitral awards and a narrow approach regarding public policy defences under the New York Convention and the Model Law.
Canada ratified the Convention on the Settlement of Disputes Between States and Nationals of Other States, 1966 (the ICSID Convention) on 1 November 2013.
Enforcement procedures differ for awards issued under the Convention establishing the International Centre for the Settlement of Investment Disputes. Non-ICSID awards generally fall under the New York Convention. The ICSID Convention covers 154 contracting states.
The ICSID Convention provides in Article 53(1) that an ICSID award shall be binding on the parties and shall not be subject to any appeal or any other remedy except for the limited revision and annulment remedies provided for in Articles 51 and 52. When an annulment application is made, the enforcement may be stayed at the discretion of the three-person ad hoc committee that ICSID appoints to consider annulment applications.
ICSID awards are directly and immediately enforceable. Article 54(1) of the Convention requires all contracting states to treat ICSID awards as binding and to enforce awards as if they were a final judgment of a court in a contracting state. Pursuant to Article 54(2), a party seeking to enforce an ICSID award merely needs to provide a copy of the award, certified by the ICSID Secretary General, to the court that the contracting state has designated with ICSID.
Non-ICSID awards must be enforced under the New York Convention or a similar treaty. In such cases the court may refuse to recognise a non-ICSID award under the narrow grounds provided in the New York Convention or other applicable enforcement treaties. The party opposing enforcement of a non-ICSID award may seek to have the award annulled in the courts at the arbitration seat. If a set-aside proceeding is launched, enforcement must be stayed.
Article 54 provides that all contracting states to the ICSID Convention are obliged to recognise ICSID awards as binding. There is no basis in the Convention for a contracting state party to refuse recognition of an ICSID award. Article 54 also provides that all contracting states are obliged to enforce pecuniary obligations imposed by an arbitral award as if they were a final judgment of a court in that state. There is therefore no basis for a contracting state to decline to enforce the obligations imposed by a ICSID award.
However, Article 55 clarifies that the obligations in Article 54 do not alter the laws in effect regarding foreign sovereign immunity. Whatever national laws apply to the execution of final judgments against foreign states and their assets generally apply also to the execution of ICSID awards.
North American Free Trade Agreement
The other international treaty that is important in Canadian arbitration circles is the North American Free Trade Agreement (NAFTA). It gives investors from the United States and Mexico protection for their investments in Canada, and Canadian investors protection for their investments in the United States and Mexico.
As in the case of many international investment treaties, Chapter 11 of NAFTA provides potential recovery for claimants if the host state has violated investment protection obligations such as fair and equitable treatment, full protection and security, national treatment and most-favoured-nation treatment. During the 25 years when NAFTA was in force, Canada lost eight and won nine of its arbitration decisions. However, NAFTA is being replaced by a new treaty called the United States Mexico Canada Agreement, following an agreement reached by the three countries on 30 September 2018.
In the future, Canadian investors will have no protection for their investments in the United States, and Americans will have no protection for their investments in Canada. The domestic courts will still be open to those investors, as will other international arbitration agreements, such as ICSID and the New York Convention.
There will be a sunset provision, however. Canadian or US investors must initiate any valid claims regarding investments established or acquired while NAFTA was in force within three years of NAFTA’s termination, after which they will no longer be able to invoke NAFTA investor-state remedies. Canadian and US investors will be limited to litigating future investment disputes in the domestic courts or before other international arbitration tribunals. All the Canadian provinces have international arbitration legislation that incorporates rights under both the Model Law and New York Convention but the substantive rights are not as specific as outlined in NAFTA. In effect, the provincial legislation is largely procedural.
Canadian investors in Mexico and Mexican investors in Canada will continue to have investor-state arbitration protection because both countries are signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which came into force on 30 December 2018.
The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union was approved by the European Parliament in February 2017, and Canada is preparing to provisionally apply parts of the agreement. Chapter 8, which deals with investment disputes, will not be applied during provisional implementation and will only take effect after CETA is ratified by all Member States. Investment disputes under CETA are to proceed before a three-member tribunal comprising one EU national, one Canadian national and one third country, with the tribunal panel being randomly selected from a pool of 15 members appointed by the CETA Joint Committee. In addition to the creation of a tribunal to hear cases submitted pursuant to Article 8.23, an appellate tribunal has also been created to ‘uphold, modify or reverse a Tribunal’s award’ on any errors in the application or interpretation of applicable law; any manifest errors in the appreciation of the facts, including the appreciation of relevant domestic law; and on any of the grounds set out in Article 52(1) of the ICSID Convention.
The New York Convention
5 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?
The New York Convention entered into force in Canada on 10 August 1986. There was one reservation, being that Canada declared that it would apply the Convention only to differences arising out of legal relationships, whether contractual or not, that are considered commercial under the laws of Canada. The exception is the province of Quebec, where the law does not provide for such a limitation.
6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?
Both the Federal Court of Canada and the superior courts in the provinces have jurisdiction to hear enforcement applications.
The Federal Court has a limited statutory jurisdiction to review a narrow scope of legal issues whereas the superior courts of the provinces have plenary jurisdiction. The Federal Court has jurisdiction over commercial arbitration awards that fall within the purview of applicable federal legislation when one of the parties is a Crown or federal government agency or the subject matter is within exclusive federal jurisdiction, such as maritime law or patent law. The New York Convention was incorporated into the federal United Nations Foreign Arbitral Awards Convention Act, which functions to govern foreign awards that are within the jurisdiction of the federal government.
The UNCITRAL Model Law has been implemented into the various versions of the federal Commercial Arbitration Act, which is applicable to international arbitrations within the purview of federal jurisdiction.
In each province, legislation for enforcement of international arbitral awards is separate from that for domestic awards. All provinces have an International Commercial Arbitration Act and an Arbitration Act to govern international and domestic arbitration awards, respectively. The legislation follows the Model Law, including the language in Article 35 indicating that awards must be recognised, with the court having little or no discretion to refuse enforcement unless one of the grounds for refusing recognition or enforcement under Article 36 can be shown.
Enforcement occurs by application to a court of the competent jurisdiction, which must be supplied with original documents that reflect the award, or certified copies. An application for enforcement is commenced by issuing a notice of application to the appropriate court. Applications are generally made by notice but may be brought ex parte in limited circumstances.
The Federal Court Rules are more detailed and require an affidavit stating that the award has not been satisfied, that there is no impediment to recognition or enforcement, and the award is final.
Enforcement in Superior Court proceedings can include a number of steps, such as examination and garnishment, and writ of seizure or sale. In all provinces, the Rules of Civil Procedure under provincial legislation apply. The Federal Court has its own Rules of Procedure, which apply to federal applications.
7 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?
The Supreme Court decision in Chevron v. Yaiguaje (2015 SCC 42) settles the long-standing question of whether a foreign judgment may be enforced in Canada without the claimant demonstrating that the claim or judgment debtor has any connection with Canada. The Court has ruled that no such connection is necessary. In short, it is not necessary to identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings.
This situation is not the same as when a claim is initiated in Ontario; there a substantial connection may be required. The issue here is whether Canada has an obligation under the relevant treaties to enforce the claim.
In Chevron Canada, the Supreme Court held that the Ontario court had jurisdiction because the company was served at its place of business in Ontario. The Supreme Court held that its conclusion on the jurisdictional issue was based on three reasons:
First, this Court has rightly never imposed a requirement to prove a real and substantial connection between the defendant or the dispute and the province in actions to recognize and enforce foreign judgments. Second, the distinct principles that underlie actions for recognition and enforcement as opposed to actions at first instance support this position. Third, the experiences of other jurisdictions, convincing academic commentary, and the fact that comparable statutory provisions exist in provincial legislation reinforce this approach. Finally, practical considerations militate against adopting Chevron’s submission.
Form of the recognition proceedings
8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?
Under domestic arbitration legislation in Ontario, Alberta, Saskatchewan, Manitoba and New Brunswick, a person entitled to the enforcement of an award made anywhere in Canada can apply to the Superior Court in that province. In some provinces, the legislation expressly provides that the application for enforcement must be made on notice. However, in most cases there is a provision to bring the application ex parte if there is neither the means nor the time to provide meaningful notice or if a delay would frustrate the process.
To enforce a foreign award, an application for enforcement is commenced by issuing a notice of application under the applicable legislation to the appropriate court.
Form of application and required documentation
9 What documentation is required to obtain the recognition of an arbitral award?
All applications relating to international awards require the original award and arbitration agreement, or certified copies, in a manner that conforms with Article 35(2) of the Model Law. The same generally applies with respect to domestic awards.
Once approved, the order of the arbitrator can be enforced in the same manner as a judgment of the court with leave of the court.
Filing fees vary across the provinces and range from C$35 to C$250.
Translation of required documentation
10 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?
If an award is not in one of the official languages of Canada (French or English), the original or certified copy of the award must be accompanied by an official certified translation. This applies to both international and domestic awards.
Other practical requirements
11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?
An important practical consideration concerns limitations periods, for which there are no provisions in the New York Convention or the Model Law. However, in Canada, the provincial rules for limitation periods are applicable to enforcement of international arbitrations, and enforcement applications are subject to provincial discoverability rules. In some provinces, this means that an application must be made within two years of the date of the award. In others, the two-year period runs from the date of expiry of the appeal period. Courts are generally unwilling to extend limitation periods. Further, recent amendments to Ontario legislation have extended the limitation period in the province to 10 years.
The foregoing is just one of the time limits counsel must be aware of. The first limitation period starts the arbitration. Under Section 52 of the Ontario Arbitration Act and Section 4 of the Ontario Limitations Act, the general limitation is two years from the day of discovery of the claim: this will govern the first limitation period. The International Commercial Arbitration Act (ICAA) in Ontario does not establish a limitation period but it is generally believed that the Rules of Civil Procedure will apply.
The third deadline concerns any objection to jurisdiction. Under Section 17 of the domestic Arbitration Act, an objection must be made no later than the beginning of the hearing or, if there is no hearing, no later than the first occasion on which the parties submit a statement to the tribunal.
Under Article 16 of the Model Law, which is attached to the Ontario ICAA, a claim that an arbitrator does not have jurisdiction must be raised no later than the submission of the statement of defence.
The fourth time limit relates to disputes regarding an arbitrator’s impartiality or independence. This is a common claim that has become a disguised ground of appeal. Article 13 of the Model Law requires challenges to be brought within 15 days of the notice of appointment or the date on which the circumstances giving rise to the challenge become known.
Recognition of interim or partial awards
12 Do courts recognise and enforce partial or interim awards?
As a general rule, courts are more reluctant to grant interim relief in international arbitrations than domestic arbitrations. The arbitrator’s jurisdiction does not extend to parties not bound by the arbitration agreement and any award made against non-parties will not be enforceable. Interim relief may be sought from the arbitral tribunal or the courts, which are prepared generally to assist an arbitration tribunal if it is necessary to carry out their responsibilities.
With the exception of Quebec, Canadian arbitrators regularly grant interim relief. Article 940.4 of the Quebec Civil Code has been interpreted to mean that only judges hold the power to grant injunctions.
Parties may alter a tribunal’s power to award preliminary or interim relief by agreement. Otherwise, arbitral tribunals hold broad discretion to order interim relief against parties to a dispute. Tribunals will typically exercise their discretion when the following elements are present:
- the request for preliminary or interim relief cannot await a decision on the merits;
- the relief is necessary to prevent imminent harm that is not reasonably compensable by money;
- the balance of convenience favours the applicant; or
- the applicant has established a reasonable possibility of success on the merits.
Canadian courts will enforce interim orders of tribunals, and parties can apply directly to the courts for interim relief when necessary. Courts will even grant relief before the arbitration begins (Dynatec, 2016 ONSC 2810). Courts have refused to grant Mareva injunctions or Anton Piller orders because they bind third parties (Sauvageau Holdings, 2011 ONSC 1819). Canadian courts will also grant interim relief in support of foreign arbitration (TLC Multimedia, 1998 BCJ No. 11656 BCSC).
The Model Law expressly provides for security for costs if a party is seeking an interim measure (CGI Information Systems, 2008 311 DLR 4th 728, Ont CA).
British Columbia and Ontario have taken important steps in the case of interim relief. The former, in Section 17 of its International Commercial Arbitration Act, provides that an arbitral tribunal may order interim relief unless otherwise prohibited by the parties. The same is true in Ontario, where the authority to grant interim relief changed recently as a result of the International Commercial Arbitration Act 2017. Jurisdiction to award interim relief is granted by Article 17 of the Model Law, which permits an arbitral tribunal at the request of a party and, absent an agreement to the contrary, to grant interim measures to maintain or restore the status quo pending determination of the dispute. Other grounds include the need to preserve evidence that may be relevant. In interim relief applications, a party must prove that irreparable harm is likely to result without the interim relief.
However, there is a requirement that there is a reasonable possibility that the moving party will succeed on the merits of the claim. Note that the party seeking interim relief may be liable for any costs or damages caused if the arbitrator ultimately finds that relief should not have been granted.
The tribunal may grant interim relief without notice to the other party, unless otherwise agreed by the parties, provided that the tribunal finds first that notice would risk frustrating the purpose of the interim relief.
International arbitrations often take place through institutions such as the London Court of International Arbitration and the ICC International Court of Arbitration, many of which now have provisions for interim relief and, in some cases, emergency arbitrators. Those provisions vary from institution to institution and are often broader than the statutory provisions granted by Article 17 of the Model Law.
Parties can seek to enforce only part of an award. This usually happens when the party against whom the award was made has partially performed its obligations under the award.
Grounds for refusing recognition of an award
13 What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?
In domestic arbitrations, under provincial legislation, the courts generally follow the enumerated grounds listed in Article 36 of the Model Law (as discussed in question 6). Note that the onus for establishing grounds rests with the party attempting to resist enforcement.
The most common objection is that the subject matter is not considered arbitrable in the jurisdiction in which enforcement is being sought; in the case of Canadian provinces, examples would be criminal or family law matters and certain consumer contracts (Seidel v. Telus, 2011 SCC 15). However, counsel must be careful not to waive the right to object. Article 16 of the Model Law provides that a claim that a tribunal lacks jurisdiction must be raised no later than the statement of defence or as soon as the matter alleged to exceed jurisdiction is raised.
Another ground is where there exists a pending challenge to an award in the originating jurisdiction. Canadian courts will generally adjourn the enforcement proceedings to allow the challenge to proceed to its conclusion. Further, the court may order that security be provided.
Canadian courts have recognised annulled foreign awards (see Powerex Corp, 2004 BCSC 876) but this is rare. The Ontario courts have also considered the impact of outstanding appeals in enforcement applications (Dalimpex, 2003 64 OR 737) and regulatory proceedings relating to the same dispute (NYSE v. Orbixa, 2014 ONCA 219). As a general rule, the courts have either adjourned the enforcement application or simply disregarded the parallel proceedings.
Another common objection is a claim that the public policy of the enforcing jurisdiction is being violated. A number of objections have been lodged based on bribery or fraud claims arising out of existing litigation that US and Canadian parties face under anti-bribery legislation. Canadian courts are reluctant to allow public policy challenges. The Ontario Superior Court has stated that to succeed on public policy grounds, an award must be egregious and fundamentally offend the most basic principles of fairness and justice. The leading case in that regard is (Scheter v. Gasmasc, (1992) OJ No. 257).
Canadian courts have rejected foreign awards on public policy grounds because an arbitrator failed to give reasons rather than because of error of law, unless it was patently unreasonable. However, the courts will refuse to enforce awards when a tribunal has decided a claim does not fall within the scope of the arbitration agreement or grants a remedy that the agreement disallows (see Telesat Canada, 2012 ONSC 2785; Alectra Utilities, 2018 ONSC 4926).
One of the unique Canadian contributions to this body of law is the finding that double recovery may be contrary to public policy principles. The leading cases are Lambert (2001 OJ No. 2776) and Boardwalk Regency (1992 51 OAC 64).
The other common ground for refusing to enforce an arbitration award is that the applicant has missed the limitation period. The leading case here is Yugraneft (2010 SCC 19), in which a Russian corporation sought to enforce an award in Alberta more than three years after the award was rendered. The Supreme Court of Canada refused to enforce the award because the Alberta Limitation Act provided for a two-year limitation period.
Another common challenge arises when there are justifiable doubts about an arbitrator’s impartiality or independence; however, again there are some time limits. Under Article 13 of the Model Law, challenges must be brought within 15 days of the notice of appointment or the date the circumstances giving rise to the challenge became known to the party. Rule 9 of the ICSID Rules provides that a challenge must be brought promptly and in any event before the proceedings are declared closed.
Note, however, that the Ontario Court of Appeal recently found that the two-year limitation period commenced on the date the mediation requirement in the parties’ contract had been fulfilled despite the fact that the arbitration was initiated four years after the claim was discovered. For most claims under Ontario law, including arbitration claims, the act prohibits proceedings being brought more than two years after the claim was discovered (PQ Licensing, 2018 ONCA 331).
Effect of a decision recognising an award
14 What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?
A decision by a court to recognise an arbitration award makes an award enforceable as an order of the court. That gives the holder of the arbitration award a broad range of remedies that the court may provide to assist in the recovery of what has become a judgment of the court. However, it is open to the parties objecting to the court’s decision to appeal that decision on the usual legal grounds. Further, any appeal requires leave of the court and Canadian courts are reluctant to grant leave.
Decisions refusing to recognise an award
15 What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?
A decision by a court refusing to recognise an award is subject to an appeal to the appellate court in that jurisdiction. The usual grounds of appeal generally relate to an error of law. Note that the courts grant deference to the arbitrator’s decision. The number of successful appeals is relatively rare. This is particularly the case with respect to decisions refusing to recognise an arbitral award.
Stay of recognition or enforcement proceedings pending annulment proceedings
16 Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?
The courts will generally adjourn recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration. Courts will look at the strength of the objection at the seat and, in some circumstances, will require security for costs. The decision to order security for costs is always a matter of judgment depending on the strength of the objections and the prospects for success (Empresa Minera Los Quenuales SA v. Vena Resources, 2015 ONSC 4408).
17 If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?
Where warranted and where requested, the courts will order security for costs when annulment proceedings have been initiated at the seat of the arbitration while a party is attempting to have the award recognised in another jurisdiction. Security for costs are more likely to be awarded if there is a long-standing record of delay with respect to the arbitration proceedings.
Recognition or enforcement of an award set aside at the seat
18 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?
A foreign award set aside at the seat of the arbitration may be recognised and enforced if the set-aside decision was impeachable for fraud, contrary to natural justice, or contrary to public policy. However, Canadian courts interpret public policy claims very narrowly. The decision must offend the most basic and explicit principles of justice and fairness. It is likely that it would not be sufficient to find that the set-aside decision conflicted with Canadian law (Boardwalk Regency, 1992 OJ No. 26 Ont CA).
An error of law will not be sufficient but if a decision was patently unreasonable, clearly irrational or affected by fraud, there may be sufficient grounds to disregard a set-aside (Navigation Sonamar, 1995 1 MALQR 1 Que SC).
Service in your jurisdiction
19 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?
As indicated in question 6, a party may enforce an arbitral award in Canada by applying, typically on notice, to the appropriate Canadian court. Accordingly, application materials must be served on the defendant. The rules concerning service are set out in the civil procedure legislation in force in each province. The provincial civil procedure rules are similar, though not identical, and attention must be given to the specific legislation.
Broadly speaking, an application to enforce an award is an ‘originating’ document, which must be served ‘personally’ under the rules. In the case of ARA v. Staicu et al (2018 MBQB 92), for example, the Manitoba Court of Queen’s Bench considered that an application to enforce an international arbitration award was an originating process. For individuals, this means that documents must be left with the individual. For corporations and partnerships, this means that documents must be left with an officer or director, or a partner. Subsequent documents arising during the enforcement proceedings (i.e., after the application has been served) may be served more simply. Indeed, most rules of procedure now permit service by email for documents that are not originating documents (see, e.g., the Alberta Rules of Court, Rule 11.21).
The rules of civil procedure also contemplate that Canada’s courts may make orders permitting ‘substitutional service’, ‘dispensing with service’ and ‘validating service’. In respect of the former, a court will permit an applicant to serve application materials in a manner not contemplated by the rules if service under the rules is ‘impractical’. Similarly, if service is impossible, a court may direct that service be dispensed with entirely. Finally, a court may validate (or ratify) service, despite non-compliance with the rules, if it can be shown that the defendant actually received the documents. These orders provide a party seeking to enforce an award additional tools to satisfy service requirements; they also narrow the gap between Canada and other jurisdictions where awards may be enforced ex parte.
Service out of your jurisdiction
20 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?
When a defendant does not reside in the province in which enforcement proceedings are commenced, an order from the court for service ex juris may be required. However, in some circumstances, the provincial rules of civil procedure may permit service ex juris without an order (see Ontario’s Rules of Civil Procedure, Rules 17.02, 17.03).
Traditionally, when leave is required, the enforcing party applies to the court ex parte, with evidence demonstrating that there is a ‘real and substantial connection’ between the enforcement proceedings and the forum. However, the comments of the Supreme Court of Canada in Chevron (see question 7) suggest that this analysis may no longer be necessary. In Chevron, the Supreme Court affirmed the importance of international comity and remarked that: ‘In an action to recognize and enforce a foreign judgment where the foreign court validly assumed jurisdiction, there is no need to prove that a real and substantial connection exists between the enforcing forum and either the judgment debtor or the dispute.’ Based on these comments, courts may not grant orders for service ex juris as a matter of course.
The manner of service ex juris is also specified by the relevant rules of civil procedure. In Alberta, for example, documents served ex juris must be served in a way that would be permitted in Alberta, or be in accordance with Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, or be in accordance with the law of the place of service.
Identification of assets
21 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?
Judgment creditors in Canada have access to several databases and registries to search for and identify assets of a judgment debtor. Since arbitral awards may be enforced in the same manner as court judgments, these tools apply to parties seeking to enforce awards in Canada.
To begin, a judgment creditor may search for real estate property owned by the debtor through provincial land titles offices, which are public registries of land ownership in each province. In Alberta, for example, a party who obtains a judgment may request that the court issue a ‘writ of enforcement’, which the party may then present to the Alberta Land Titles Office and requisition a title search. Similar processes exist in the rest of Canada.
Additionally, a judgment creditor may search provincial personal property registries to identify a debtor’s movable property. Unlike land searches, a writ is typically not required before requisitioning a personal property search. However, personal property search results do not disclose all of a debtor’s assets, only those in respect of which third parties have registered security interests or liens.
A judgment creditor may also conduct corporate registry searches. Specifically, corporations must file basic information with provincial registries prior to conducting business in each province. This information is public, and may be searched. In some provinces, corporations must disclose whether they hold shares in other corporations. Similarly, searches may be carried out with the Office of the Superintendent of Bankruptcy, which will disclose whether any bankruptcy proceedings have been commenced in respect of the judgment debtor. Bankruptcy searches are especially important when enforcement proceedings are contemplated, as Canada’s bankruptcy legislation stays any and all enforcement actions, unless the court orders otherwise.
Finally, several industry specific databases are available to judgment creditors, including those maintained by Canada’s securities commissions and by provincial energy or utilities regulators. The owners of trademarks may also be searched through the Canadian Intellectual Property Office, which is maintained by the federal government.
In short, many options are available to a party seeking to identify an award debtor’s assets in Canada, although the precise procedures (including any associated costs) depend on the province.
Information available through judicial proceedings
22 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?
The primary method of obtaining information concerning a judgment debtor’s assets in Canada is through ‘examinations in aid of execution’, pursuant to which a judgment creditor may question the debtor (under oath) regarding their assets and financial information. Again, since awards may be enforced in the same way as judgments, the process is available to parties seeking to enforce arbitral awards. The process for examinations in aid of execution are set out in the provincial rules of civil procedure and, depending on the province, leave of the court may be required before a notice of examination may be served. When the debtor is a corporation, a representative of the corporation may be examined to ascertain information regarding the assets of the company.
If a debtor fails to attend an examination, conceals information or refuses to answer any proper question, the court may sanction the debtor through various orders, including (in the most serious cases) an order for contempt of court. In addition to in-person examinations, provincial rules of procedure also contemplate examinations in writing, questionnaires to be completed by the debtor at the request of the enforcing party, and sworn statutory declarations by debtor.
Availability of interim measures
23 Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?
As discussed in question 12, interim relief against assets is available. However, such measures are more often granted by the court assisting the arbitration process, rather than by the arbitration tribunal itself, since tribunals may not make orders that bind third parties. In the important case of Sauvageau Holdings, the Ontario Supreme Court made it clear that arbitration agreements as ‘private contractual provisions do not and cannot confer on the arbitrator the court’s jurisdiction over third parties who are strangers to the arbitration agreement’.
In respect of interim measures against assets owned by a sovereign state, decisions run both ways. These cases are largely decided individually and often turn on whether a waiver has been granted. Canadian courts have both granted and denied interim applications relating to assets owned by sovereign states.
Procedure for interim measures
24 What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?
Reforms in recent years have resulted in greater jurisdiction being granted to both arbitrators and courts to grant interim relief against assets, in both domestic and international arbitrations. In practice, however, applications for interim measures against assets are most often made to the courts.
First, unlike orders of a tribunal, interim measures by a court may bind third parties. Second, for a tribunal to make an interim measure it must already be constituted, which may cause delay and prejudice to the party seeking the interim measure. Third, orders granted by a tribunal must be enforced by a court, which adds expense and procedural steps. Finally, and perhaps most importantly, tribunals are restricted in terms of the kinds of interim measures that may be ordered. Generally speaking, domestic and international arbitration legislation in Canada enables tribunals to make orders concerning the ‘detention, preservation or inspection of property that are the subject of the arbitration’ (Ontario Arbitration Act 1991, Section 18). In contrast, the court may grant interim injunctions, appoint receivers and grant any other equitable relief it sees fit (Ontario Arbitration Act 1991, Section 8).
In terms of procedure, parties seeking interim measures against assets may apply to the court with notice or on an ex parte basis, depending on the urgency and risks associated with providing notice. However, in Secure 2013 Group Inc v. Tiger Calcium Services Inc (2017 ABCA 316), the Alberta Court of Appeal affirmed that ex parte interim relief is ‘extraordinary’, that applicants must seek ex parte interim relief expeditiously and without delay, and that applicants seeking ex parte relief must act with the ‘utmost good faith’ and make full, fair and candid disclosure to the court. Although Secure 2013 Group did not concern relief in support of an arbitration, the Alberta Court of Appeal’s remarks have general application. Particular care must therefore be taken by any party preparing evidence and submissions for an application for interim relief against assets without notice.
The essential legal test applied by Canadian courts when considering interim relief is threefold: (1) whether the balance of convenience favours the granting of the measure; (2) whether the relief is necessary to prevent imminent and irreparable harm to the applicant; and (3) whether the applicant has a reasonable prospect of success on the merits in the arbitration. Evidence must be adduced to meet this test. Most notably, Canadian courts will not grant preservation of property or other interim orders if damages would compensate the applicant.
A final consideration is that Canadian courts will require a party applying for interim measures to provide an ‘undertaking as to damages’. This is an undertaking by the party, made to the court, pursuant to which the party promises to compensate the opposing party for any harm caused by the interim relief, if the tribunal ultimately dismisses the underlying arbitration. Canadian courts may also request that undertakings are fortified with letters of credit or other security, and this may be particularly so in the context of an international arbitration when the applicant is not domiciled in Canada.
Interim measures against immovable property
25 What is the procedure for interim measures against immovable property within your jurisdiction?
The procedural and legal requirements for interim measures against assets (especially those granted by Canadian courts) are general similar for immovable property, movable property and intangible property. The relevant considerations are discussed in question 24.
However, one specific interim measure that may be available in respect of immovable property is a certificate of pending litigation (or a certificate of lis pendens). A party who commences litigation in Canada, and claims an interest in land, may apply to the court for a certificate to be registered against the title of the land. The certificate of litigation pending does not restrain the debtor from selling the land, but acts as notice to third parties that the land is subject to the litigation. In practice, a certificate of litigation pending operates as an interim injunction against the land. The specific procedures for obtaining a certificate of litigation pending are set out in the provincial rules of court. Most importantly, a certificate will only be granted if the land is the subject of the dispute. Certificates of litigation pending are frequently granted in Canadian civil litigation and may apply to arbitrations in the appropriate circumstances.
Interim measures against movable property
26 What is the procedure for interim measures against movable property within your jurisdiction?
The procedural and legal requirements for interim measures are generally the same for all types of property. See question 24.
Interim measures against intangible property
27 What is the procedure for interim measures against intangible property within your jurisdiction?
The procedural and legal requirements for interim measures are generally the same for all types of property. See question 24.
28 What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?
Canadian courts may grant attachment orders in support of arbitral proceedings. Specifically, Canada’s domestic and international arbitration legislation broadly empowers courts to make any interim injunction ‘as in court actions’ (see Ontario Arbitration Act 1991, Section 8), which includes attachment orders.
Under Canadian law, an attachment order is an injunction by the court freezing the property of the defendant and prohibiting the defendant (or others) from dealing with it. In certain provinces, an attachment order may be made pursuant to legislation (e.g., Alberta’s Civil Enforcement Act), and in all provinces, the courts have an inherent jurisdiction to grant attachment orders in the form of Mareva injunctions.
In contrast, and unlike other interim preservation measures, it is doubtful that a Canadian court would enforce an attachment order issued by a tribunal (see Sauvageau Holdings). As noted, a hallmark of an attachment order or Mareva injunction, or both, is that it binds non-parties (such as financial institutions) and therefore it has been held that a tribunal lacks jurisdiction to make such orders.
In terms of procedure, similar considerations apply to a party seeking a prejudgment attachment order from the court, as apply to other court applications for interim relief. For instance, applications may be brought on notice or ex parte. If made ex parte, courts impose onerous duties on applicants to apply expeditiously, to act in good faith, and to make full and fair disclosure (see question 24). Provincial legislation concerning attachment orders may also set out specific procedures that must be followed.
The legal test applied by courts when considering attachment orders is generally the same three-part test as for interim relief (see question 24). However, courts will also require evidence of a real risk that the defendant will remove assets from the jurisdiction to avoid future enforcement.
Finally, several provinces have published model attachment orders or Mareva injunctions, or both, which should be consulted when applying for such relief. Undertakings as to damages must also be given for attachment orders.
Attachment against immovable property
29 What is the procedure for enforcement measures against immovable property within your jurisdiction?
The procedural and legal requirements for attachment against property are generally the same for all types of property. See question 28.
Attachment against movable property
30 What is the procedure for enforcement measures against movable property within your jurisdiction?
The procedural and legal requirements for attachment against property are generally the same for all types of property. See question 28.
However, unique considerations concern one type of attachment order, which concerns movable property. An order for prejudgment garnishment has the effect of compelling third parties who owe debts to the defendant to pay such monies into court for preservation. Although prejudgment garnishment may not be available in all Canadian provinces, the courts of British Columbia and Manitoba have acknowledged its availability in support of arbitration (see Trade Fortune, 1994 CarswellBC 139; Winnipeg Condominium Corporation, 2017 MBQB 112). As with other attachment orders, Canadian courts hold that prejudgment garnishment orders may not be made by a tribunal and are exclusively within the jurisdiction of the courts (Winnipeg Condominium Corporation, 2017 MBQB 112).
The specific availability, procedure and legal requirements for a prejudgment garnishment order vary from province to province.
Attachment against intangible property
31 What is the procedure for enforcement measures against intangible property within your jurisdiction?
The procedural and legal requirements for attachment against property are generally the same for all types of property. See question 28.
Enforcement against foreign states
32 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?
The rules governing recognition and enforcement of awards against foreign states are set out in the Canada State Immunity Act RSC 1985 (CSA). A state may waive its immunity. In any event, there is no immunity with respect to commercial activities. The CSA does not provide for any exception from immunity for arbitration agreement.
Service of documents to a foreign state
33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?
Leave would likely be needed to serve a foreign state with enforcement application materials ex juris. See question 20.
Immunity from enforcement
34 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?
Canada, like the United Kingdom and the United States, takes a restrictive approach to sovereign immunity. Under the Canada State Immunity Act RSC 1985 (CSIA) practice, a state can wave immunity. However, jurisdictional immunity requires proof that the foreign state explicitly submits to the jurisdiction of the court by written agreement, as provided for in Section 4 of the CSIA. A waiver of execution immunity requires that the state has either explicitly or by implication waived its immunity from attachment and execution.
Section 5 of the CSIA provides that a foreign state is also not immune from jurisdiction in any proceeding relating to commercial activity. In addition, Canada does not have an exception for immunity for arbitration agreements. TMR Energy (2003 Fc 1517) suggests that an agreement to arbitrate may be considered an express waiver of jurisdiction immunity.
See also question 35.
Waiver of immunity from enforcement
35 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?
In Callavino (2007 ABQB 212), the State of Yemen was deemed to have waived execution immunity by agreeing to international arbitration. A similar result followed in Canadian Planning and Design (2015 ONCA 661), in which the Ontario Court of Appeal considered whether bank accounts owned by Libya were related only to the embassy and were therefore subject to diplomatic unity.
Canadian cases in this area turn on their specific facts. The courts have both refused to find sovereign immunity and, in other cases, accepted that claim.
 Gordon E Kaiser is an arbitrator and settlement counsel at Energy Arbitration Chambers.