Commercial Arbitration

Last verified on Wednesday 4th May 2022

Commercial Arbitration: Canada

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1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Canada

Canada ratified the New York Convention (the Convention) in 1986. All 10 provinces and three territories have also enacted statutes to which the full text of the Convention is attached or otherwise incorporated (in Québec, Canada’s only civil law jurisdiction, the Convention is implemented through the Code of Civil Procedure, which specifically instructs courts to take the Convention into consideration when interpreting the Code’s provisions).

Canada declared that the Convention applies to disputes arising solely out of legal relationships, whether contractual or not, that are considered to be commercial under the laws of Canada, except for Québec, where the Convention applies to commercial and non-commercial matters alike.

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2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Canada

In November 2013, Canada ratified the ICSID Convention, which provides that an award rendered under the Convention will be recognised as binding.

Canada is also a party to a number of bilateral investment treaties and regional free trade agreements, some of which require the parties to provide appropriate procedures to ensure the recognition and enforcement of arbitral awards, and provide that the parties are deemed to be in compliance with this requirement if they are a party to the New York Convention (see, eg,  the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)).

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3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Canada

In 1986, Canada became the first country in the world to adopt the 1985 UNCITRAL Model Law, along with the federal Commercial Arbitration Act, which applies to all commercial arbitrations, whether international or domestic, when one of the parties is the federal government, one of its agencies or a federal Crown corporation, and where the subject matter of the dispute concerns a matter of exclusive federal jurisdiction, such as maritime or admiralty.

The 1985 Model Law has been implemented across the country at the provincial level, generally as a schedule to the relevant international commercial arbitration legislation, with some slight variation, or, in Québec, as chapters of the Québec Civil Code and the Québec Code of Civil Procedure.

The 2017 Ontario International Commercial Arbitration Act provides that the 2006 Model Law has force of law in the province. In 2018, British Columbia followed suit by updating its international arbitration legislation in line with the 2006 Model Law.

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4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Canada

A number of institutions operate in Canada, including ADR Chambers International, the ADR Institute of Canada, the Vancouver International Arbitration Centre and the Canadian Commercial Arbitration Centre. The ICDR also provides arbitration and mediation rules specific to Canadian disputes. Other institutions, such as Arbitration Place, provide hearing facilities and services (including online hearing platforms) and rosters of arbitrators.

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5. Can foreign arbitral providers operate in your jurisdiction?

Canada

Commercial parties can, and frequently do, opt for the services of international arbitral institutions that operate freely in Canada.

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6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Canada

Although no jurisdiction has established a specialist arbitration court, courts are generally very familiar with and supportive of arbitration. Upholding the principle of competence-competence, courts frequently stay proceedings or decline jurisdiction in favour of parallel international commercial arbitrations, in compliance with article 8(1) of the UNCITRAL Model Law and in line with the Supreme Court of Canada’s modern pro-arbitration jurisprudence (see, eg, Seidel v Telus, 2011 SCC 15), barring any exceptional situations such as an unconscionable arbitration clause or tacit renunciation to arbitration (see, eg, Uber v Heller, 2020 SCC 16 or CSI Toronto Car Systems Installation Ltd v Pittasoft Co, Ltd, 2021 ONSC 5117).

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Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Canada

Save for Ontario and British Columbia, all common law provinces apply article 7 of the 1985 Model Law, which provides that an arbitration agreement must be in writing in the form of: a document signed by the parties; an exchange of letters or other means of communication that provide a record of an agreement; or an exchange of pleadings in which the existence of an agreement is alleged and not denied. Recently, the Court of Queen’s Bench (the superior court) of Saskatchewan found an “agreement in writing” to have been concluded by means of an exchange of text messages (see Parrish & Heimbecker Ltd v TSM Winny AG Ltd, 2020 SKQB 348).

Ontario and British Columbia have adopted Option 1 of article 7 of the 2006 Model Law, which provides that while arbitration agreements shall be in writing to be enforceable, they may be concluded orally, by conduct, or by other means.

Under the Québec Civil Code, arbitration agreements must be evidenced in writing, and are deemed to be such when contained in an exchange of communications or in an exchange of proceedings in which their existence is alleged by one party and not contested by the other.

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8. Are any types of dispute non-arbitrable? If so, which?

Canada

Generally speaking, disputes involving criminal offences, bankruptcy matters, public recognition of civil status, capacity of persons and family-law matters cannot be arbitrated in Canada (though exceptions exist and vary across the country). Further, in Québec, only courts may hear matters regarding liability for injury suffered as a result of exposure to or the use of certain extractive resources originating in Québec, such as asbestos. Certain provincial consumer protection laws also set limits on the arbitrability of consumer and employment matters. The Supreme Court of Canada had previously refused to certify a class action on behalf of business customers bound by an arbitration clause but allowed judicial proceedings to advance with respect to consumers’ claims: TELUS Communications Inc v Wellman, 2019 SCC 19.

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9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Canada

Though, in principle, third parties may be bound by an arbitration clause only if they have consented to it, either expressly or implicitly, they may nonetheless be bound on grounds of agency, assignment, novation and estoppel (see, eg, Beck v Vanbex Group Inc., 2021 BCSC 1619).

Recent judgments, however, demonstrate certain hesitancy. The Court of Appeal for British Columbia refused to bind a court-appointed receiver to a mandatory arbitration clause contained in the contract of the entity in receivership and its business partner (see Petrowest Corporation v Peace River Hydro Partners, 2020 BCCA 339; judgment of the Supreme Court of Canada expected later this year). The British Columbia Supreme Court also refused to bind an unsuspecting plaintiff to an arbitration agreement that had been entered into between a foundation the plaintiff had donated to and the foundation’s data management and service provider (Wittman v Blackbaud, Inc, 2021 BCSC 2025). Earlier this year, the Québec Superior Court declined to bind a closely related non-signatory (despite its desire to be bound) over another signatory’s objection (Services financiers CSM inc c Proservin inc, 2022 QCCS 215).

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10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Canada

Generally, parties’ consent is a prerequisite of consolidation, albeit not always specifically addressed in legislation. Arbitration acts of most jurisdictions do, however, grant courts the power to consolidate arbitral proceedings, on such terms as they deem just. Although these provisions are typically interpreted as requiring the consent of the parties, in its decision in Japan Canada Oil Sands Limited v Toyo Engineering Canada Ltd, the Court of Queen’s Bench of Alberta held that, under Alberta’s International Commercial Arbitration Act, it could consolidate a domestic arbitration and an international arbitration without the parties’ consent (Japan Canada Oil Sands Limited v Toyo Engineering Canada Ltd, 2018 ABQB 844; see, also Pricaspian Development Corporation v BG International Ltd, 2016 ABQB 611, on which the court relied).

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11. Is the "group of companies doctrine" recognised in your jurisdiction?

Canada

Canadian jurisdictions do not recognise the group of companies doctrine per se. They do, however, recognise the doctrine of piercing the corporate veil, but its application is generally limited to situations where there is evidence of fraud or similar misconduct. Courts tend to pierce the corporate veil between affiliated companies only where: (i) a parent controls and dominates the affiliate and (ii) the affiliate is used as a shield for fraudulent or unlawful conduct. The fact that a corporate entity belongs to the same corporate group as a party to the proceeding is not sufficient, in and of itself, to lift the veil.

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12. Are arbitration clauses considered separable from the main contract?

Canada

All common law provinces have incorporated article 16 of the Model Law, which enshrines the doctrine of separability. In Québec, article 2642 of the Civil Code is to the same effect. Courts across the country have confirmed the doctrine’s applicability in Canada (see, eg, General Entertainment and Music Inc v Gold Line Telemanagement inc., 2022 FC 418, paragraphs 41-42; Specter Aviation c Laprade, 2021 QCCA 1811, paragraphs 52-54).

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13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?

Canada

Arbitration legislation provides that arbitral tribunals may rule on their own jurisdiction, including in respect of any objections relating to the existence or validity of the arbitration agreement (for Québec, see article 632 of the Code of Civil Procedure). If such decisions are made as rulings on “preliminary questions”, within the meaning of article 16(3) of the UNCITRAL Model Law, they may not be appealed (see United Mexican States v Burr, 2021 ONCA 64). Courts have upheld the competence-competence principle on multiple occasions (see, eg, Seidel v TELUS Communications, 2011 SCC 15; Clayworth v Octaform Systems Inc, 2020 BCCA 117; Bakaris v Southern Sky, 2020 ONSC 7306; Proservin inc. c Investissements Toro inc, 2020 QCCS 3561; General Entertainment and Music Inc v Gold Line Telemanagement inc, 2022 FC 418). One recent example of a deviation from this principle is Uber Technologies Inc v Heller, 2020 SCC 16, where the Supreme Court of Canada held that a court may resolve a genuine challenge to arbitral jurisdiction if it determines that there is a real prospect that the challenge may never be resolved by the arbitrator if a stay is granted.

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14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Canada

There are no particular idiosyncrasies to bear in mind when drafting an arbitration agreement with a seat in Canada, though there may well be distinctions between mandatory laws governing arbitration or the enforcement of awards in the various provinces and territories. For example, the Québec Court of Appeal recently reiterated that an arbitration clause must be mandatory and must clearly, irrevocably and precisely confer exclusive jurisdiction upon a foreign authority (Huang c Yan, 2021 QCCA 1473, paragraph 13).

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15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Canada

Although ad hoc and institutional arbitrations are both commonly used, there is a strong tradition of ad hoc arbitration in domestic matters. Parties to ad hoc arbitrations often, however, adopt standard rules of procedure, such as the UNCITRAL Rules.

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16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Canada

Although not specifically addressed by the relevant legislation, multi-party agreements are used and enforced. In terms of drafting, unless all parties can be identified and are able to agree on a mechanism for the appointment of arbitrators at the drafting stage, parties may wish to refer the constitution of the tribunal to an appointing authority. Drafting parties should also consider stating expressly that notice of proceedings commenced under the clause should be sent to every party to the contract, irrespective of their potential role in the proceedings, and stipulate a time limit for the contracting parties to provide notice of their intention to join the proceedings.

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Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Canada

All  jurisdictions have incorporated article 21 of the Model Law, which provides that arbitration proceedings are deemed commenced on the date of receipt of the notice to refer the dispute to arbitration.

Limitation periods vary according to the jurisdiction as well as the nature of the claim and range between one to 10 years.

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Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Canada

All jurisdictions follow article 28(1) of the Model Law, which provides that the substantive law applicable to a dispute is determined first by agreement of the parties. All jurisdictions have also specified that, despite article 28(2) of the Model Law, if the parties have not designated an applicable substantive law to the dispute, the arbitral tribunal “shall apply the rules of law it considers to be appropriate given all the circumstances respecting the dispute”.

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Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Canada

Beyond the typical restrictions concerning independence and impartiality, there are no limitations concerning the selection of arbitrators. Some arbitration statutes mandate appointing authorities (where used) to consider appointing an arbitrator of a nationality other than those of the parties. British Columbia legislation explicitly forbids courts from appointing a sole or third arbitrator who is of the same nationality as one of the parties, save for parties' prior agreement.

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20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Canada

Visa requirements aside, non-Canadian nationals may generally serve as arbitrators or represent parties in international arbitrations in Canada. The international arbitration legislation in British Columbia, for instance, specifically provides that a party may be represented in an arbitration by any person, “including but not limited to a legal practitioner from another state”. Additionally, in Québec, professional regulations allow a person who is admitted to practice law outside of the province to provide legal opinions or act as counsel or advocate before an international arbitration tribunal. 

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21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Canada

All jurisdictions have incorporated the rules concerning the selection of arbitrators at article 11(3)-(5) of the Model Law, and designated specific courts to decide matters that arise under article 6 of the Model Law. Where a party fails to nominate an arbitrator or where assistance is required in the selection of an arbitrator or the constitution of a tribunal, parties have recourse to the designated court. The decision of that court concerning the selection of an arbitrator is not subject to appeal. 

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22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Canada

Most international commercial arbitration acts are silent on the question, though there are some exceptions (see, eg, section 36.02 of the British Columbia International Commercial Arbitration Act, RSBC 1996, c 233, which states that “an arbitrator is not liable for anything done or omitted in connection with an arbitration unless the act or omission is in bad faith or the arbitrator has engaged in intentional wrongdoing” or article 621 of the Québec Code of Civil Procedure which provides that “arbitrators cannot be prosecuted for an act performed in the course of their arbitration mission, unless they acted in bad faith or committed an intentional or gross fault”). Irrespective of the absence of explicit legislative provisions in some provinces, courts have insulated arbitrators from civil liability absent fraud and bad faith (Sport Maska Inc v Zittrer [1988] 1 SCR 564).

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23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Canada

Arbitration legislation does not explicitly address this issue, and there is little case law on point. However, the rules of most arbitral institutions operating in Canada require that parties pay a deposit covering the tribunal’s fees, which is held and administered by the institution in question. Many of these institutions also provide pure “fundholding” services. Perhaps most importantly, there is no law or rule prohibiting deposits or advances for arbitrators’ fees, and experienced arbitrators typically require deposits that are kept sufficiently current to cover payment of their anticipated fees.

Domestic arbitration acts specify that arbitrators may decide on their own fees, provided the fees and expenses paid to them do not exceed the fair value of the services performed and the necessary and reasonable expenses actually incurred. The domestic arbitration acts of Alberta, British Columbia, Manitoba, New Brunswick and Ontario also allow parties to bring an application before a court to review an arbitrator’s account for fees and expenses. In Nova Scotia and Saskatchewan, a party may request that the arbitrator’s account for fees and expenses be taxed in the same manner as a charge for services of an attorney.

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Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Canada

Generally, a party may challenge an arbitrator on two grounds: reasonable apprehension of bias (or “justifiable doubts” as to the arbitrator’s independence or impartiality in British Columbia) and lack of qualifications that may have been agreed between the parties.

Subject to mandatory law, parties are free to agree on a challenge procedure of their choice, including by way of institutional or other rules. Absent agreement on procedure for challenges, the challenging party must bring the matter before the tribunal within 15 days of becoming aware of the ground of challenge. If the challenge is refused, the challenging party may, within 30 days, request the competent court to rule on the challenge.

Both international tribunals seated in Canada and Canadian courts often refer to the IBA Guidelines on Conflicts of Interest in International Arbitration when handling challenges to the members of the arbitral tribunal.

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Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Canada

Both courts and arbitral tribunals can issue interim relief in respect of an international arbitration. In Ontario, British Columbia and Québec, an interim measure may be recognised and enforced in the same way as an award. 

Anti-suit injunctions are available, although they are generally difficult to obtain (Amchem Products Inc v British Columbia (Workers' Compensation Board) [1993] 1 SCR 897). There is no explicit judicial treatment of a requested injunction against foreign judicial proceedings that allegedly contravene an arbitration agreement. However, in 2019, the Court of Appeal for British Columbia issued an anti-arbitration injunction, enjoining a would-be claimant from pursuing his claim under a CIETAC arbitration clause, on the (very case-specific) ground that the parties had agreed not to pursue arbitration until certain applications pending before the courts were determined (Li v Rao, 2019 BCCA 264).

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26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Canada

Article 17 of the 1985 Model Law, which allows a tribunal, at the request of a party, and absent an agreement to the contrary, to make “any interim measure of protection as the arbitral tribunal considers necessary”, has been implemented in all jurisdictions.

The 2006 Model Law, which incorporates a broader regime for interim measures, has been implemented in Québec, Ontario and in British Columbia, where the legislation also specifically provides that arbitral tribunals have the power to order appropriate security for costs in connection with arbitral proceedings. 

In Ontario, the Superior Court of Justice recently highlighted that judges deciding a motion for security for costs must “first consider the specific provisions of the [relevant] rules and then effectively take a step back and consider the justness of the order sought in all the circumstances of the case [such as the merits of the case, delay in bringing the motion, and the public importance of the litigation], with the interests of justice at the forefront” (Friction Co Ltd v Novalex Inc, 2021 ONSC 7714, paragraphs 26-27).

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Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Canada

Aside from some fundamental requirements (such as the independence and impartiality of arbitrators and equal treatment of the parties), tribunals are generally vested with broad discretion to decide on the applicable procedure absent an agreement of the parties. In Québec, the principle of proportionality should also factor into the tribunal's procedural choices. 

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28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Canada

Common law provinces follow article 25 of the Model Law: if the claimant fails to communicate its statement of claim, the arbitral tribunal terminates the proceedings. However, if the respondent fails to communicate its statement of defence, the tribunal shall continue the proceedings without treating such failure in itself as an admission of the claimant’s allegations. If any party, after due notice, fails to appear before the arbitral tribunal, the latter may nevertheless go on with the proceedings and render a binding award. In any case, the defaulting party can be excused if it can demonstrate that the parties had agreed otherwise or of it had sufficient cause.

In Québec, the Code of Civil Procedure provides that if a party fails to state its contentions, attend at the hearing or present evidence in support of its contentions, the arbitrator, after recording the default, may continue the arbitration. However, if the party that submitted the dispute to arbitration fails to state its contentions, the arbitration is ended unless the other party objects (article 635).

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29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Canada

In international arbitration matters, article 19(2) of the Model Law gives arbitrators wide discretion to determine the “admissibility, relevance, materiality and weight of any evidence”. Parties and tribunals frequently address matters relating to the taking of evidence at the outset of the arbitration, in an initial procedural order that will often refer to the IBA Rules on the Taking of Evidence in International Arbitration (“IBA Rules”) either as a binding text or as guidance. Even when the parties have not expressly adopted the IBA Rules, it is common for arbitrators to refer to the IBA Rules as indicative of international arbitral practice on evidentiary matters.

In domestic arbitration proceedings, arbitrators are generally afforded more flexibility in the administration of evidence than state judges, although some domestic arbitration legislation requires that witnesses testify under oath.

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30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Canada

In accordance with article 27 of the Model Law, all jurisdictions permit an arbitral tribunal or a party, with the tribunal’s permission, to request assistance from a competent court in obtaining evidence, including compelling a witness to attend, answer or produce real evidence in their possession. Recently, however, the Supreme Court of British Columbia clarified that it would only issue a subpoena compelling a witness’ attendance if there was “cogent evidence of refusal” to attend the hearing; in the absence of such refusal the court found that its intervention would be premature (see Octaform Inc v Leung, 2021 BCSC 73).

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31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Canada

Arbitration laws contain no special rules for the disclosure of documents in arbitral proceedings. The IBA Rules are frequently used by the parties and arbitrators as guidelines.

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32. Is it mandatory to have a final hearing on the merits?

Canada

No; an arbitral tribunal may conduct the arbitration on the basis of documents alone, unless any party requests a hearing.

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33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Canada

Yes, as per article 20(2) of the Model Law. 

Relatedly, the Ontario Superior Court of Justice recently, in the context of an application to stay Canadian court proceedings in favour of arbitration in the US, held that the forum non conveniens doctrine no longer applies to stay applications, adding that in the age of zoom no one forum is more convenient than another (Kore Meals LLC v Freshii Development LLC, 2021 ONSC 2896).

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Award

34. Can the tribunal decide by majority?

Canada

Yes. Under the Model Law, a majority ruling constitutes the tribunal’s decision. The arbitration laws in many common-law provinces further specify that the decision of the chair of the tribunal prevails in the absence of a majority or unanimous decision. The laws of most provinces also explicitly allow one arbitrator to rule on a question of procedure if previously authorised by the other arbitrators and the parties.

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35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Canada

The Model Law, as adopted in common law jurisdictions, does not specifically address the types of relief that arbitral tribunals may grant. It is therefore an issue for the lex arbitri or the arbitration agreement, and unless either provides otherwise, there are no a priori restrictions on the types of relief arbitral tribunals may grant, including equitable remedies and declaratory orders.

In Québec, however, a distinction is made between injunctions (the non-respect of which entails penal consequences) and other injunctive relief, for instance, orders for specific performance. Arbitral tribunals seated in Québec cannot grant injunctions, which fall within the exclusive jurisdiction of the Superior Court, but they may grant other provisional measures and issue orders for specific performance.

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36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Canada

Consistent with the Model Law, international arbitration acts provide that an award does not need to be signed by all tribunal members, as long as the refusal by an arbitrator to sign is explained in the award itself. If an arbitrator refuses to sign the award because of a dissenting opinion, the award should say so expressly. It will usually be up to the president of the tribunal to decide whether to append the dissenting opinion to the award. Alternatively, the dissenting arbitrator may sign the award and indicate the words “I dissent” next to his or her signature.

In Québec, if one of the arbitrators refuses to sign the award or is unable to sign, the other arbitrators must record that fact and the award has the same effect as if it were signed by all of them (article 642 Code of Civil Procedure).

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37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Canada

Unless otherwise agreed between the parties, an arbitral award must be in writing and state the reasons on which it is based. It must also indicate the date and the place where it was made and be signed by all or a majority of the members of the tribunal. A copy of the arbitral award must be notified to all parties.

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38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Canada

In accordance with the Model Law, all jurisdictions allow parties to request that the tribunal interpret or correct or in certain cases supplement the award, within a specified timeframe. The tribunal may also make corrections to the award on its own initiative within a similar period of time.

The limitation period for seeking the enforcement of an award varies from jurisdiction to jurisdiction. While most international arbitration acts are silent on the issue, the 2017 international commercial arbitration act in Ontario provides that an international arbitral award can only be enforced within 10 years. Otherwise, the Supreme Court ruled that local limitations laws (under which the limitation period may be as short as two years) apply to the enforcement of an arbitral award, absent an express provision to the contrary in the relevant legislation (Yugraneft Corp v Rexx Management Corp, 2010 SCC 19).  

In accordance with the Model Law, annulment must be sought within three months of receipt of the arbitration award or of the decision on the request for a correction, a supplemental award or an interpretation. 

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Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Canada

Though arbitration laws in most jurisdictions contain provisions regarding costs, the issue of apportioning costs remains largely in the arbitral tribunals’ discretion, as appears from recent decisions of the Court of Queen’s Bench of Alberta in K-Rite Construction Ltd. v. Enigma Ventures Inc., 2020 ABQB 566, and the Supreme Court of British Columbia in Allard v. The University of British Columbia, 2021 BCSC 60. The general convention is that costs follow the event. Parties are encouraged to specify the tribunal’s authority to award costs in their arbitration agreements.

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40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Canada

International arbitration legislation does not provide explicitly for the award of interest, except in British Columbia. Despite the legislative silence, arbitrators enjoy wide discretion and generally recognise that interest is an element of damages, and thus necessary to fully compensate the claimant.

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Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Canada

In common law jurisdictions, no appeal is permitted from an international arbitration award unless specifically provided by the parties in the arbitration agreement. In some jurisdictions, domestic arbitral awards may be appealed on limited grounds (generally on questions of law), although there are differences among the provincial acts. 

In Québec, arbitration awards (domestic and international alike) may only be challenged directly by way of an application for annulment, or indirectly by contesting an application for homologation (recognition). Most authorities suggest that parties may not contract out of either procedure. 

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42. Are there any other bases on which an award may be challenged, and if so what?

Canada

Awards rendered in arbitrations having their seat in a Canadian province or territory may be challenged under the grounds provided in the Convention and the Model Law.

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43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Canada

Parties can exclude the right to appeal and other recourses available under the Model Law (including the right to apply to set aside an award) so long as the court is satisfied that the agreement does not undermine the effect of the mandatory provisions of the Model Law, or the local court’s inherent ability to review an award based on grounds of public policy.

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Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Canada

There are only a few cases addressing the issue of recognition and enforcement of awards that have been set aside at the seat of the arbitration. An Ontario court has ruled that it was within the discretion of the enforcing court to recognise and enforce an arbitral award even where it had been set aside by a court in the jurisdiction of the award, but did not specify what factors were relevant to the exercise of this discretion (Schreter v Gasmac Inc, 1992 CanLII 7671 (ON SC)). In other instances, courts found that they had discretion to recognise and enforce an award where a motion to set it aside was pending at the place of arbitration (Europcar Italia SpA v Alba Tours International Inc [1997] O.J. No. 133 (Ont. C.J.), Powerex Corp v Alcan Inc, 2004 BCSC 876 (CanLII), Wires Jolley LLP v Peter Wong, 2010 BCSC 391).

In Québec, the issue is governed by articles 653 paragraph 2, subparagraph (6) and 654 of the Code of Civil Procedure.

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45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Canada

Canada remains an arbitration-friendly jurisdiction. Courts are cautious not to unduly interfere with the arbitration process and they continue to apply a restrictive interpretation to the grounds for refusal of enforcement, as evidenced by the recent decision of the Superior Court of Justice of Ontario in Crystallex International Corporation v Bolivarian Republic of Venezuela, 2016 ONSC 4693, where the court proceeded ex parte to enforce an ICSID award against the Republic of Venezuela. The Superior Court of Québec also recently reaffirmed that recognition could only be refused on grounds specifically outlined by law. It thus dismissed the argument that recognition should be refused because the award was fully executed, making its recognition “theoretical”(see Metso Minerals Canada Inc v Arcelormittal exploitation minière Canada, 2020 QCCS 1103).

 

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46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Canada

Foreign state immunity is governed by the State Immunity Act. Section 12 of the Act provides for the general principle that “property of a foreign state that is located in Canada is immune from attachment and execution and, in the case of an action in rem, from arrest, detention, seizure and forfeiture.” There are a number of exceptions, including where the state has explicitly or implicitly waived such immunity, or the property is used or intended to be used for a commercial activity. 

Courts mostly rely on the commercial activity exception and the waiver of execution immunity by implication to enforce arbitral awards against states (Collavino Inc v Tihama Development Authority, 2007 ABQB 212; Canadian Planning and Design Consultants Inc v Libya, 2015 ONCA 661 in the context of enforcement of an ICC award against Libya.)

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Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Canada

In most jurisdictions, the international arbitration laws do not expressly protect the confidentiality of arbitral proceedings. Exceptions include Québec, where arbitrators, parties and third persons assisting them are expressly required to preserve the confidentiality of the arbitration process, and British Columbia, where, unless otherwise agreed, “all hearings and meetings in arbitral proceedings must be held in private.”

Accordingly, parties would be well advised to provide for the confidentiality of their proceedings contractually. Parties should further bear in mind that arbitration proceedings are likely to become public when court intervention is sought since most courts are reluctant to issue sealing orders and similar measures to preserve the confidentiality of the arbitral proceedings. Some recent Québec authority, however, indicates that arbitral confidentiality should be fostered and maintained before the courts when possible (79411 USA Inc v Mondofix Inc, 2020 QCCS 1104).

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48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Canada

While courts have in some cases found that there may be an implied undertaking to not use information obtained in arbitration proceedings for purposes other than the arbitration, parties wishing to preserve the confidentiality of the evidence produced and the pleadings filed in the arbitration should specifically provide for it in their agreement. Despite such agreements, however, parties may still seek to use the documents from one arbitration in the course of another. In Telesat Canada v Boeing Satellite Systems International, Inc the Ontario Superior Court declined to set aside a tribunal’s procedural order, whereby said tribunal kept in the record the documents from another arbitration in which only one of the parties was involved as these documents could be required for the purposes of deciding on issue estoppel  (2010 ONSC 4023).  

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49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Canada

Counsel and arbitrators are governed by the professional regulations and codes of ethics of their respective jurisdictions, bars or law societies. Additionally, some institutions provide their own Codes of Ethics (see, eg, codes of the ADR Institute of Canada or the Canadian Commercial Arbitration Centre).

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50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Canada

None, other than the expectations or assumptions that might apply in any arbitral proceeding based on the adversarial principle as practised in international arbitration generally, including, for example, the taking of witness evidence, cross-examination of witnesses and experts, some degree of document discovery, and the opportunity for parties not only to state their case but to respond to the case as put by the other party. In addition, in Québec, the principle of proportionality governs civil procedure.

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51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Canada

Third-party funding agreements are not per se prohibited, as recently confirmed by the Supreme Court of Canada (9354-9186 Québec inc v Callidus Capital Corp, 2020 CanLII 5612 (SCC)). They are, however, subject to certain limitations pertaining to the role of the funder in the proceedings, its control over the proceedings and the return it may gain on the outcome of the proceedings.

In British Columbia, the international arbitration legislation specifically provides that it is not contrary to public policy for arbitration proceedings to be funded by a third party.

 

 

* The authors would like to thank Justina di Fazio and Joshua Crowe for their help with the research for the first edition of this chapter.

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