Arbitration
UNCITRAL Model Law
Is the arbitration law based on the UNCITRAL Model Law?
In Canada, arbitration law is legislated at the federal, provincial and territorial levels. In the common law jurisdictions, domestic arbitration and international arbitration are governed by separate statutes. Domestic arbitration is governed by a statute entitled either the Arbitration Act (British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Prince Edward Island, Yukon, Northwest Territory, and Nunavut) or the Commercial Arbitration Act (Nova Scotia). In all cases, the statutes adopt aspects of the UNCITRAL Model Law but incorporate it to different extents. In these jurisdictions, international arbitration is governed by an International Commercial Arbitration Act, which is based on the Model Law. Federally, the Commercial Arbitration Act applies to limited federal activities and is based on the Model Law. In Quebec, arbitration is governed by the Civil Code of Quebec and the Quebec Code of Civil Procedure.
Arbitration agreements
What are the formal requirements for an enforceable arbitration agreement?
For a jurisdiction’s International Commercial Arbitration Act to apply, the arbitration agreement must be in writing. In accordance with article II of the Model Law, an agreement in writing includes an arbitral clause in a contract or an arbitration agreement and can be signed by the parties or contained in an exchange of letters. The requirements for an enforceable arbitration agreement under domestic statutes vary from jurisdiction to jurisdiction – some require an agreement in writing, but some (such as Alberta and Ontario) do not. Generally, if an agreement provides that a dispute shall be adjudicated by arbitration before it may be dealt with by a court, that is considered to be an arbitration agreement.
Choice of arbitrator
If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?
Where the arbitration agreement does not specify the number of arbitrators, in an international arbitration, the Model Law applies and the default panel of three arbitrators applies, with the default procedure for appointment if the parties do not or cannot agree on a procedure. An appointment may only be challenged if circumstances exist that give rise to justifiable doubts as to an arbitrator’s impartiality or independence, or if the arbitrator does not possess qualifications agreed to by the parties. If a party seeks to challenge an arbitrator it appointed, it must have become aware of the circumstances grounding the challenge after the appointment was made.
In a domestic arbitration, the default in common law jurisdictions is the appointment of a single arbitrator, who is appointed either as agreed by the parties or with the assistance of the court. Generally, the right to challenge the appointment of an arbitrator mirrors the principles set out in the Model Law.
Arbitrator options
What are the options when choosing an arbitrator or arbitrators?
There is a deep pool of candidates when choosing an arbitrator or arbitrators, including retired appellate and trial judges and senior counsel. Most jurisdictions in Canada also have a diverse pool of qualified non-lawyer candidates for specialised or technical disputes, for example, intellectual property disputes, where specialised scientific knowledge may be preferred. Canada has a well-qualified roster of candidates that can adjudicate any complex dispute of a domestic or international nature.
Arbitral procedure
Does the domestic law contain substantive requirements for the procedure to be followed?
Domestic statutes contain few substantive requirements for arbitral procedure. Generally, the parties or the tribunal can shape the procedure as they wish. Tribunals usually defer to the consent of the parties, but where parties disagree, the tribunal will set the procedure to be followed, subject to basic requirements of procedural fairness.
Court intervention
On what grounds can the court intervene during an arbitration?
Generally, the court’s jurisdiction to intervene in an arbitration is limited. For example, in Ontario, in a domestic arbitration, the court may only intervene to:
assist the conduct of arbitrations;
ensure that arbitrations are conducted in accordance with arbitration agreements;
prevent unequal or unfair treatment of parties to arbitration agreements;
review a decision by an arbitral tribunal that ruled on a preliminary objection to its jurisdiction; and
enforce awards.
Where the tribunal rules on an objection to its jurisdiction as a preliminary question, a party may apply to the court on an interim basis to decide the matter, but the tribunal may continue the arbitration while the application is pending and may make an award.
Similar restrictions exist in most other jurisdictions in Canada for domestic arbitrations.
For international arbitrations, a court may only intervene where provided in the Model Law.
These restrictions on court intervention in both domestic and international arbitrations are observed by Canadian courts. There is an established body of jurisprudence at all levels of court, including the Supreme Court of Canada, respecting the need for courts to limit intervention to matters provided for in legislation and not to unduly interfere in arbitral proceedings.
Interim relief
Do arbitrators have powers to grant interim relief?
Yes, arbitrators have the power to grant interim relief. Most jurisdictions also grant the courts jurisdiction to grant interim relief with respect to the detention, preservation and inspection of property in arbitral proceedings.
Award
When and in what form must the award be delivered?
An award must be made in writing and signed by the arbitrator or, where there is more than one arbitrator, a majority of the arbitral panel if there is an explanation for the omission of a signature. A copy of the award must be delivered to each party and, unless the parties agree otherwise, is required to state the reasons on which it is based. An award is also required to state the date and place of arbitration.
Appeal
On what grounds can an award be appealed to the court?
In most jurisdictions, there is a statutory default rule for appeals from an award. The default rule varies from province to province. In Ontario, appeals are limited to questions of law with leave of the court, unless the parties agree otherwise. Leave would only be granted if the court is satisfied that the importance to the parties of the matters at stake in the arbitration justifies an appeal and the determination of the question of law at issue would significantly affect the rights of the parties.
In a domestic arbitration, the parties can agree among themselves to other rights of appeal, such as on questions of fact or mixed fact and law, or to rights of appeal without leave. They can also agree to no right of appeal. Silence on the issue in the arbitration agreement is deemed to incorporate the statutory default.
The provisions of the Model Law apply to international arbitral awards and do not permit the parties to contract out of the Model Law’s exclusion of appeals from arbitral awards.
In addition to appeals, for both domestic and international arbitrations, there is a limited right to apply to set aside an award for enumerated grounds. An application to set aside is not an appeal in disguise – it is a limited right, usually restricted to issues concerning the fairness of the arbitral process.
Enforcement
What procedures exist for enforcement of foreign and domestic awards?
Canadian courts are very deferential to arbitral awards. A party seeking to enforce a domestic or international award can expect the award to be upheld and judgment granted, absent strong grounds to set the award aside or refuse to enforce the award.
Awards must be enforced within a limitation period. In Ontario, that period is 10 years. In Alberta, the limitation period is two years from the date of discovery of a claim to enforce an award, which is normally considered to occur on the date when the unsuccessful party’s right to seek to set aside the award expires.
Costs
Can a successful party recover its costs?
Yes, a successful party can recover its costs, including disbursements, in keeping with the usual rule that costs follow the event. Costs are normally awarded on the same scale and basis as costs in court actions. However, in some instances, costs in arbitrations will be awarded on a higher scale.
Law stated date
Correct on
Give the date on which the above content is accurate.
14 April 2020
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