Arbitration procedures and practice in Canada: overview

A Q&A guide to arbitration law and practice in Canada.

The country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in this jurisdiction, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards and the available remedies, both final and interim.

To compare answers across multiple jurisdictions visit the Arbitration procedures and practice Country Q&A Tool.

This Q&A is part of the global guide to arbitration. For a full list of jurisdictional Q&As visit www.practicallaw.com/arbitration-mjg.

Lawrence E Thacker, Lenczner Slaght Royce Smith Griffin LLP
Contents

Use of arbitration and recent trends

1. How is commercial arbitration used in your jurisdiction and what are the recent trends?

Use of commercial arbitration

Commercial arbitration is commonly used, particularly to resolve international commercial disputes. Local courts are highly supportive of both domestic and international arbitration (see Questions 20, 21 and 10). The courts are particularly deferential to international arbitral tribunals. The principles of party autonomy, separability and kompetenz-kompetenz are generally understood and consistently applied (see Questions 8 and 22). Foreign arbitral awards are recognised and enforced as contemplated by the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration 1985 (UNCITRAL Model Law) (see Question 30).

Recent trends

In international matters, the advantages of arbitration over litigation before Canadian courts include that:

  • Litigants can select a neutral and mutually acceptable forum and decision-maker.

  • Litigants can select procedural rules that are neutral and appropriate to the nature of the dispute.

  • The New York Convention facilitates enforcement of arbitral awards (see Questions 29 and 30).

Advantages/disadvantages

Although court litigation is still widely used for domestic commercial disputes, arbitration is an increasingly popular alternative. The perceived potential advantages of arbitration over litigation include:

  • Procedural flexibility.

  • Timely decision-making.

  • Privacy and confidentiality.

  • Finality of the award.

One principal disadvantage of commercial arbitration is the parties' inability to join a third party to an arbitration without the third party's consent (see Question 11). This can give rise to parallel proceedings which may have inconsistent outcomes. A related disadvantage is the relative difficulty of consolidating arbitrations (even if they are between the same or similar parties).

 

Legislative framework

Applicable legislation

2. What legislation applies to arbitration? To what extent has your jurisdiction adopted the UNCITRAL Model Law on International Commercial Arbitration 1985 (UNCITRAL Model Law)?

Arbitrations seated in Canada are regulated primarily by provincial rather than federal legislation. Each of Canada's provinces, except for Quebec, has enacted legislation adopting, with minor differences, the UNCITRAL Model Law (this legislation is referred to below as UNCITRAL Model Law). In Quebec, the Civil Code and Code of Civil Procedure are consistent with the UNCITRAL Model Law.

In addition, each province has legislation to regulate domestic commercial arbitrations (this legislation is referred to as provincial legislation below). The law varies from province to province, particularly on issues such as appeal rights and contracting-out of procedural provisions. There are also differences among the provincial jurisdictions concerning the:

  • Power of courts to stay court proceedings in favour of arbitration.

  • Consolidation of arbitration proceedings.

  • Relationship between mediation and arbitration.

The provincial legislatures and the Federal Parliament have also enacted legislation to implement the New York Convention.

The following are the federal, provincial and territorial statutes dealing with the enforcement or administration of international arbitral proceedings in Canada:

  • Commercial Arbitral Act (R.S.C. 1985, c. 17 (2nd Supp.)) (Canada).

  • International Commercial Arbitration Act (R.S.B.C. 1996, c. 233) (British Columbia).

  • International Commercial Arbitration Act (R.S.A. 2000, c. 1-5) (Alberta).

  • International Commercial Arbitration Act (S.S. 1988-1989, c. I-10.2) (Saskatchewan).

  • International Commercial Arbitration Act (C.C.S.M., c. C-151) (Manitoba).

  • International Commercial Arbitration Act (R.S.O. 1990, c. I-9) (Ontario).

  • Civil Code of Procedure (R.S.Q., c. C-25 (as am.), Articles 940-952); Quebec Civil Code (S.Q. 1991, c. 64, Articles 2638-2643, 3121, 3133, 3148 and 3168) (Quebec).

  • International Commercial Arbitration Act (S.N.B. 1986, C. I-12.2) (New Brunswick).

  • International Commercial Arbitration Act (R.S.N.S. 1989, c. 234) (Nova Scotia).

  • International Commercial Arbitration Act (1988, c. I-5) (Prince Edward Island).

  • International Commercial Arbitration Act (R.S.N. 1990, c. I-15) (Newfoundland and Labrador).

  • International Commercial Arbitration Act (R.S.N.W.T. 1988, c. I-6) (Northwest Territories, and Nunavut under the Nunavut Act (S.C. 1993 c. 28, s. 29).

  • International Commercial Arbitration Act (R.S.Y. 2002, c. 123) (Yukon Territory).

 

Mandatory legislative provisions

3. Are there any mandatory legislative provisions? What is their effect?

If a litigant commences legal proceedings in relation to a matter previously agreed to be arbitrated, the court will stay those proceedings if a timely application for a stay is made, unless the court determines that the arbitration agreement is:

  • Null and void.

  • Inoperative.

  • Incapable of being performed.

See Question 9.

The Supreme Court of Canada (Supreme Court) has held that courts should not undertake a detailed consideration of evidence on stay applications to determine if any of the exceptions apply, but should leave that determination to the arbitration tribunal, at least in the first instance.

Generally, parties are free to define the nature and scope of disputes they wish to have determined by arbitration. The parties must be treated with equality and be given a full opportunity to present their cases.

 
4. Does the law prohibit any types of disputes from being resolved via arbitration?

There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.

 

Limitation

5. Does the law of limitation apply to arbitration proceedings?

In Canada, limitation legislation varies from province to province. Historically, in some provinces, limitation periods were regarded as matters of substantive law, and in other provinces they are considered matters of procedural law only. In addition, some provinces have expressly stated that statutory limitation periods apply to arbitral proceedings. For the purposes of enforcement proceedings under the New York Convention, limitation periods have now been determined to be "procedural". The Supreme Court has recently confirmed that Canadian limitation statutes apply to the enforcement in Canada of an arbitral award from a jurisdiction outside Canada.

Generally, limitation periods for contractual claims in Canada are between two and six years from the date that the cause of action arose (the breach). Limitation legislation typically provides that the running of time is postponed until the existence of the rights was discoverable with reasonable diligence. Some legislation further extends time if there is a later confirmation of the claim.

 

Arbitration organisations

6. Which arbitration organisations are commonly used to resolve large commercial disputes in your jurisdiction?

There is a strong tradition of ad hoc domestic arbitration in Canada, as there has been no truly national arbitral institution until recently.

The ADR Institute of Canada (ADRIC) (www.adrcanada.ca) has adopted the National Arbitration Rules relating to domestic disputes, and administers arbitrations under these Rules from its headquarters in Toronto, or through regional affiliates. The ADRIC also trains arbitrators and mediators, and grants accreditations (C.Arb. and C.Med.).

The British Columbia International Commercial Arbitration Centre (BCICAC) (www.bcicac.com) in Vancouver can conduct domestic and international arbitrations in Canada and elsewhere. However, its caseload consists primarily of British Columbia domestic arbitrations.

The International Chamber of Commerce (ICC) is active in Canada through the Arbitration Committee of the Canadian Chamber of Commerce, which acts as the National Committee for the ICC in Canada (www.chamber.ca).

In addition:

  • Arbitrations between Canadian and US parties are often administered by the American Arbitration Association (AAA), through the International Centre for Dispute Resolution in New York (ICDR).

  • The London Court of International Arbitration (LCIA) administers some arbitrations seated in Canada.

All these international institutions frequently appoint Canadian persons as arbitrators in disputes not involving Canadian parties.

See box, Main arbitration organisations.

 

Jurisdictional issues

7. What remedies are available where one party denies that the tribunal has jurisdiction to determine the dispute(s)? Does your jurisdiction recognise the concept of kompetenz-kompetenz? Does the tribunal or the local court determine issues of jurisdiction?

The concepts of separability and kompetenz-kompetenz are well recognised. The Supreme Court recently considered the division of responsibility between the arbitral tribunal and the court for determining whether a dispute should be arbitrated. Generally, challenge to the arbitrator's jurisdiction must be resolved first by the arbitrator (Dell Computer Corp v Union des consommateurs 2007 SCC 34). The court held that a departure from that rule should be made only if both:

  • The challenge is based solely on a question of law.

  • The court is satisfied that the challenge is not a delaying tactic and will not unduly impair the conduct of the arbitration.

 

Arbitration agreements

Validity requirements

8. What are the requirements for an arbitration agreement to be enforceable?

Substantive/formal requirements

Legislation governing arbitration has been implemented at the federal, provincial and territorial levels. Generally, an arbitration agreement must be in writing. The right to arbitration and the binding force of arbitral awards are contractual obligations based on the mutual intention and agreement of the parties. The principles of formation and interpretation of contract apply.

The UNCITRAL Model Law requires an arbitration agreement to be in writing in one of the following forms:

  • A document signed by the parties.

  • An exchange of letters, telex, telegrams or other means of telecommunication that provide a record of the agreement.

  • An exchange of pleadings in which the existence of an agreement is alleged and not denied.

In relation to domestic arbitration, the formal requirements are set out in provincial legislation. In Ontario, for example, an arbitration agreement is not required to be in writing. In addition, the Supreme Court has enforced arbitration agreements formed by web-based "click-through" agreements.

An arbitration agreement will describe the:

  • Scope of issues to be arbitrated.

  • Place where the arbitration will occur.

  • Any arbitral institution that is to supervise or administer the arbitration.

  • Rules to be applied in the arbitration.

  • Number of arbitrators.

  • Process for appointing arbitrators.

  • Language of the arbitration.

The parties may adopt a specific set of arbitration rules from an independent arbitral institution, or may create their own set of arbitration rules, or some combination of these.

Separate arbitration agreement

The arbitration agreement can be included in the main contract or set out in a separate document.

 

Unilateral or optional clauses

9. Are unilateral or optional clauses, where one party has the right to choose arbitration, enforceable?

Yes, unilateral and option clauses are enforceable. A court will enforce an agreement in which one party grants another party a right to choose arbitration at that party's option.  Enforceability is a question of interpretation of the agreement granting that right. If the right to choose arbitration reflects the mutual understanding and agreement of the parties at the time the agreement was made, generally that agreement will be enforceable. 

 
10. In what circumstances can a third party that did not sign the contract incorporating the arbitral clause in question be compelled to arbitrate disputes relating to the contract in question?

There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.

 
11. In what circumstances is a third party that did not sign the contract incorporating the arbitral clause in question entitled to compel a party that did sign the contract to arbitrate disputes relating to the contract?

There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.

 

Separability

12. Does the applicable legislation recognise the separability of arbitration agreements?

The requirements for an arbitration agreement are set out in provincial legislation, which varies with respect to the express recognition of the doctrine of separability of arbitration agreements. However, the case law across Canada clearly recognises the doctrine of separability. Challenging the validity of the contract containing the arbitration clause, even if successful, will not of itself invalidate the arbitration agreement. According to case law, the part of the contract containing an arbitration agreement is considered to be a separate and independent contract.

 

Breach of an arbitration agreement

13. What remedies are available where a party starts court proceedings in breach of an arbitration agreement or initiates arbitration in breach of a valid jurisdiction clause?

Court proceedings in breach of an arbitration agreement

If a party to an arbitration agreement, whether domestic or international, commences local court proceedings, the other party to the agreement can apply for an order staying the court proceedings. Canadian courts must stay court proceedings in favour of arbitral proceedings, whether international or domestic, if the relevant dispute falls within the scope of an arbitration agreement that is not:

  • Void.

  • Inoperative.

  • Incapable of being performed.

A party to an arbitration agreement can also claim damages for breach of the arbitration agreement, but these claims are not common.

Arbitration in breach of a valid jurisdiction clause

The right to arbitration is a purely contractual obligation created by the agreement of the parties. Generally, Canadian courts recognise the principle that an arbitrator has the initial opportunity to decide jurisdiction. Typical objections to jurisdiction are based on arguments that the subject matter of the dispute is not arbitral because it falls outside the scope of the arbitration agreement or public policy. However, where the jurisdictional issue is based on undisputed facts and is based primarily on a question of law, the court will determine whether or not the dispute is arbitrable.

 
14. Will the local courts grant an injunction to restrain proceedings started overseas in breach of an arbitration agreement?

The Canadian courts can, and do, issue anti-suit injunctions to restrain parties from proceeding with litigation in court. To enjoin a court proceeding, the parties seeking the injunction must demonstrate that:

  • A valid arbitration agreement exists.

  • The arbitral forum acquired by the agreement is more appropriate than the judicial forum that is the subject of the injunction based on the principles of forum non conveniens.

  • Granting the injunction would not unjustly cause a party to lose a legal right or advantage in the judicial forum.

 

Joinder of third parties

15. In what circumstances can a third party be joined to an arbitration or otherwise be bound by an arbitration award?

There is no legislative regime in Canada enabling the joinder of third parties to an arbitration. Generally, arbitration awards are not binding on persons who were not parties to the arbitration.

In certain circumstances, non-parties to the arbitration agreement can be bound by the arbitral decision. This generally occurs through the operation of doctrines of contract law such as agency, assignment or novation.

The general rule in Canada is that arbitration, and the binding force of the arbitral decision, is a matter of contract, and there must be privity between the parties to the arbitration agreement. The ability of an arbitrator to take jurisdiction over a non-signatory is restricted by the doctrine of privity of contract.

 

Arbitrators

Number and qualifications/characteristics

16. Are there any legal requirements relating to the number and qualifications/characteristics of arbitrators? Must an arbitrator be a national of, or licensed to practice in, your jurisdiction in order to serve as an arbitrator there?

In the absence of agreement, international arbitrations conducted under the UNCITRAL Rules (UNCITRAL Model Law) are determined by a panel of three arbitrators. There are no specifically required qualifications or characteristics other than independence and impartiality.

Different and additional default rules apply to domestic arbitration under the relevant provincial legislation.

 

Independence/impartiality

17. Are there any requirements in the legislation relating to arbitrators' independence and/or impartiality?

Arbitrators must be independent and impartial.

Different and additional default rules apply to domestic arbitration under the relevant provincial legislation.

 

Appointment/removal

18. Does the law contain default provisions relating to the appointment and/or removal of arbitrators?

Appointment of arbitrators

In the absence of agreement, the following default rules apply to international arbitration (UNCITRAL Model Law):

  • In an arbitration with three arbitrators, each party appoints one arbitrator and the two arbitrators appointed then appoint a third arbitrator. If a party fails to appoint an arbitrator within 30 days of being asked to do so, or if two arbitrators fail to agree on a third arbitrator within 30 days of being appointed, the appointment will be made by the court on a party's request.

  • In an arbitration with a single arbitrator, if the parties are unable to agree on an arbitrator, an arbitrator will be appointed by the court on a party's request.

  • Where the parties have agreed on a particular appointment process, any party can ask the court to take any necessary steps to secure an appointment if:

    • one party fails to act in accordance with the agreed procedure;

    • the parties or two arbitrators are unable to reach an agreement required of them under the agreed procedure; or

    • any third party, such as an arbitral institution, fails to perform any function entrusted to it under the agreed procedure.

Any decision of the court on an issue relating to the appointment of an arbitrator is subject to no appeal.

Different and additional default rules apply to domestic arbitration under the relevant provincial legislation.

Removal of arbitrators

An arbitrator's appointment can be challenged only if there are justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties.

The parties are free to agree on a procedure for challenging an arbitrator. In the absence of agreement, a party who intends to challenge the appointment of an arbitrator must, within 15 days of becoming aware of the appointment or the circumstances giving rise to the challenge, send a written statement of the reasons for the challenge to the arbitral tribunal. The arbitral tribunal must decide on the challenge. If the challenge is not successful, the challenging party may request, within 30 days after receiving notice of a decision rejecting the challenge, that a court determine the challenge. The court's decision cannot be appealed. While such a request is pending, the arbitral tribunal, including the challenged arbitrator, can continue the arbitration proceedings and make an award.

If an arbitrator becomes de jure or de facto unable to perform his functions, or for any other reason fails to act without undue delay, the arbitrator's mandate can be terminated either:

  • On withdrawal by the arbitrator.

  • If the parties agree on termination.

 

Procedure

Commencement of arbitral proceedings

19. Does the law provide default rules governing the commencement of arbitral proceedings?

In the absence of agreement, the following default rules apply to international arbitration (UNCITRAL Model Law):

  • Applications can be made to the superior court in the province in which the arbitration is seated for the appointment of arbitrators.

  • An arbitration is commenced on the receipt of a request by the other party that a dispute be referred to arbitration.

Different and additional default rules apply to domestic arbitration under the relevant provincial legislation.

 

Applicable rules

20. What procedural rules are arbitrators likely to follow? Can the parties determine the procedural rules that apply? Does the legislation provide any default rules governing procedure?

Applicable procedural rules

The parties can freely determine the applicable procedural rules. In the absence of the parties' agreement, the tribunal can generally conduct an arbitration in the manner it considers appropriate (UNCITRAL Model Law).

In international arbitrations seated in Canada, the tribunal often looks at the IBA Rules on the Taking of Evidence in International Commercial Arbitration for guidance. In addition, the UNCITRAL Model Law provides certain general rules in relation to the:

  • Exchange of statements.

  • Holding of oral hearings.

  • Production of documents.

The situation is similar in domestic commercial arbitrations. Most provincial statutes regulating arbitration set some default rules, but generally allow the parties to select their own procedural rules.

Default rules

Arbitration is a contractual obligation created by the mutual intention and agreement of the parties. The parties are free to adopt a specific set of established arbitration rules or create their own process or some combination of these. Where the parties have not agreed on what rules will govern the arbitration, the arbitrator has discretion to apply whatever rules he wishes, provided that they comply with the mandatory provisions (see Question 3).

In Quebec, the Civil Code provides that the arbitration procedure is determined by the law of the country where the arbitration occurs, unless the parties agree otherwise.

All major arbitral institutions in Canada provide default procedural rules (see box, Main arbitration organisations).

 

Arbitrator's powers

21. What procedural powers does the arbitrator have under the applicable legislation? If there is no express agreement, can the arbitrator order disclosure of documents and attendance of witnesses (factual or expert)?

Canadian law

An arbitrator has wide authority to conduct the proceedings in the manner he considers appropriate in international arbitrations seated in Canada, subject to ensuring that each party is treated fairly and has an adequate opportunity to present its case. An arbitrator can, among other things, order the disclosure of documents and request the assistance of the court to compel third party witnesses to attend.

Canadian provincial legislation implementing the UNCITRAL Model Law allows an arbitrator to request the court's assistance in taking evidence, and Canadian courts are willing to use their enforcement powers to facilitate arbitrations. Most provincial legislation governing domestic arbitrations provide the arbitrator with similarly broad procedural powers, including the authority to order parties to produce documents. In addition, parties to domestic commercial arbitration proceedings can generally issue subpoenas to witnesses, and the subpoenas are enforceable by the superior courts in the provinces.

Parties may be able to waive procedural and other rights, depending on the legislative provisions.

Arbitration rules

Most arbitration rules provide that an arbitrator is not bound by strict rules of evidence and can rule on its relevance and admissibility. Claims of privilege are preserved.

In certain circumstances, all direct evidence to be relied on at the hearing is provided in writing, in the form of a witness statement or sworn affidavit delivered before the hearing. (This is one way of compensating for any lack of pre-hearing discovery.)

Unless an arbitrator rules, or the parties agree, otherwise, each party can require that any witness who has provided a statement be made available for cross-examination at the hearing. No further direct examination is possible, which can expedite the hearing considerably.

Arbitration rules normally also set out the procedure and time limits for the delivery of any expert reports.

 

Evidence

22. What documents must the parties disclose to the other parties and/or the arbitrator? How, in practice, does the scope of disclosure in arbitrations compare with disclosure in domestic court litigation? Can the parties set the rules on disclosure by agreement?

Scope of disclosure

Generally, if both parties are represented by experienced arbitration counsel seeking to realise the potential advantages of arbitration, disclosure in domestic commercial arbitration proceedings is less extensive than in court litigation. In certain domestic arbitration proceedings, the scope of pre-hearing disclosure is still similar to that required in court litigation. However, in international commercial arbitral proceedings, the scope of disclosure is generally significantly less extensive than in court litigation.

Parties' choice

The parties to international commercial arbitrations can freely agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. Failing any agreement, the tribunal can generally conduct arbitration proceedings in the manner it considers appropriate (UNCITRAL Model Law) (see Question 16). This discretion applies to the pre-hearing disclosure of documents and other evidence.

Provincial legislation sets some default rules, but generally allows the parties to select the applicable procedural rules, including in relation to the pre-hearing disclosure of documents and other evidence.

 

Confidentiality

23. Is arbitration confidential? If so, what is the scope of that confidentiality and who is subject to the obligation (parties, arbitrators, institutions and so on)?

The hearings of international and domestic commercial arbitrations are conducted in private, unless agreed otherwise by the parties. It is less certain whether the documents and other evidence disclosed during the proceedings, and the fact of the arbitration itself are confidential. The ADRIC Rules provide that all documents disclosed in the proceeding must remain confidential.

If there are particular concerns about confidentiality, an arbitration agreement contemplating an arbitration seated in Canada should contain an express confidentiality agreement. In addition, orders protecting confidential information can be sought from the tribunal.

 

Courts and arbitration

24. Will the local courts intervene to assist arbitration proceedings?

In both international and domestic commercial arbitration proceedings, Canadian courts have proved willing to lend their enforcement powers to facilitate the effective conduct of arbitration proceedings. This includes requiring witnesses to:

  • Attend and give evidence.

  • Produce documents and other evidence to the arbitral tribunal.

 
25. What is the risk of a local court intervening to frustrate the arbitration? Can a party delay proceedings by frequent court applications?

Risk of court intervention

Canadian courts are respectful of arbitral proceedings, and the Supreme Court has ruled that arbitration agreements must be broadly interpreted and enforced. Local court's inappropriate intervention in arbitration proceedings, international or domestic, is rare.

Delaying proceedings

Canadian courts promote and respect the rights of parties to agree to resolve disputes by way of arbitration. Generally, the courts will not tolerate a party who is obviously attempting to delay an arbitral proceeding by making frequent court applications. The courts are generally vigilant in preventing inappropriate delay tactics.

 

Remedies

26. What interim remedies are available from the tribunal?

Security

Arbitral tribunals can order security for costs if the applicable rules expressly or implicitly empower them to do so.

Other interim measures

Both international and domestic tribunals in Canada, in their discretion, can grant interim measures of protection if these measures are justified.

Other

A validly appointed arbitrator may award interim relief without any prior authorisation from a court. Under the UNCITRAL Model Law, the parties can agree that arbitrators are barred from awarding interim relief. There has been conflicting law in Canada as to whether interim relief can include injunctive relief, and whether arbitrators can award injunctive relief or only order specific performance.

 
27. What final remedies are available from the tribunal?

Unless expressly agreed, international arbitral tribunals seated in Canada can order any relief that is available under the applicable law. However, it is less certain whether arbitrators conducting domestic proceedings in some provinces have jurisdiction to order equitable relief, such as injunctions and specific performance, if it is conferred on them expressly. For example, several trial court decisions in British Columbia found that arbitral tribunals did not have jurisdiction to order equitable relief, unless the parties had expressly provided for that after the start of the arbitration, as part of the agreement waiving appeal rights. However, the British Columbia Court of Appeal has ruled that, under British Columbia law, arbitrators can grant equitable relief.

 

Appeals

28. Can arbitration proceedings and awards be appealed or challenged in the local courts? What are the grounds and procedure? Can parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitral clause itself)?

International arbitral awards generally cannot be appealed. However, the question of whether a right of appeal exists is based on the contractual agreement to arbitrate and the mutual intention and agreement of the parties reflected by the arbitration agreement. A party subject to an international arbitral award may apply to a court to set the award aside under certain conditions adopted in the UNCITRAL Model Law. A party seeking to set aside an arbitral award must generally show that they were:

  • Legally incapable.

  • Not given proper notice of the appointment of the arbitrator.

  • Not given proper notice of the proceeding.

  • Denied the opportunity to fully present their case.

  • That the arbitrator's decision went beyond the scope of what was agreed to be arbitrable in the arbitration agreement.

The courts may also set aside arbitral awards if the process of appointing the arbitral tribunal or the procedures followed by the arbitral tribunal fail to comply with existing mandatory legal requirements or with the agreement of the parties.

Rights of appeal/challenge

Under provincial legislation applicable to domestic commercial arbitral awards, there is a limited right to appeal the award. Generally, an appeal can be brought only on a question of law, not a question of fact. In some provinces, unless all parties have agreed to a right of appeal or consented to an appeal, there is no right of appeal. In other provinces, there may be a right of appeal but leave to appeal must be obtained from a judge of the superior court of the province. To successfully obtain leave, it must be shown that the issue is sufficiently important to justify the court's attention.

Grounds and procedure

Unless appeal rights are expressly agreed, international commercial arbitral awards cannot be appealed in Canada. However, international awards arising from an arbitration seated in Canada can be set aside if the (UNCITRAL Model Law):

  • Tribunal breached the standards of procedural fairness.

  • Tribunal failed to allow a party to present its case.

  • Enforcement of the award would breach Canadian public policy.

Excluding rights of appeal

Whether parties can exclude any rights of appeal in their arbitration agreement depends on the law of the province in which the arbitration is seated. In Ontario, for example, the parties can exclude appeal rights, but in British Columbia they can only make a binding waiver of the right to seek leave to appeal after the arbitration procedure has started.

 
29. What is the limitations period applicable to actions to vacate or challenge an international arbitration award rendered?

There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.

 

Costs

30. What legal fee structures can be used? Are fees fixed by law?

International and domestic arbitrators in Canada have the discretion to make awards for costs, unless the parties have agreed otherwise. This includes the discretion to include in costs awards:

  • The fees and expenses of the arbitrators and expert witnesses.

  • The parties' legal fees and expenses.

  • The fees of any administering institution.

  • Any other expenses incurred in connection with the proceedings.

Recoverable fees are not fixed by law. Generally, lawyers conducting arbitrations bill their clients on an hourly basis and these accounts form the basis of the arbitral tribunals' costs awards.

 
31. Does the unsuccessful party have to pay the successful party's costs? How does the tribunal usually calculate any costs award and what factors does it consider?

Cost allocation

The question of the arbitrator's jurisdiction to award costs is determined by the arbitration agreement. Generally, parties are free to agree whether and to what extent the arbitrator may award costs and to agree on what factors may and may not be considered by the arbitrator in doing so.

Cost calculation

In the absence of agreement to the contrary, an arbitrator will generally have the jurisdiction and discretion to award costs. However, it is a matter of interpretation of the arbitration agreement to determine whether the arbitrator does or does not have that jurisdiction.

Unless agreed otherwise, the arbitral tribunal has broad discretion to award costs (see Question 26). The unsuccessful party must generally pay part of, or substantially all of, the successful party's reasonable legal fees and expenses. The fees are typically assessed by reference to the amount actually incurred.

In assessing whether to depart from this general approach, arbitrators in Canada consider both:

  • Whether there were discrete issues on which success was divided, making it unjust to allow the party successful in the result to recover the costs of issues on which it was unsuccessful.

  • The conduct and circumstances of the parties.

Factors considered

The factors that the arbitrator will consider in awarding costs will be those specifically set out in the arbitration agreement. If there is no specific agreement on the factors that can and cannot be considered, the arbitrator will generally apply the factors applied by courts in determining costs in the jurisdiction in which the arbitration occurs.

 

Enforcement of an award

Domestic awards

32. To what extent is an arbitration award made in your jurisdiction enforceable in the local courts?

Canadian courts will enforce international commercial arbitral awards rendered in Canada under the New York Convention and the UNCITRAL Model Law, unless one of the grounds under the New York Convention and the UNCITRAL Model Law on which enforcement can be refused is made out. Canadian courts interpret these grounds very narrowly, and generally enforce these awards.

Typically, the party seeking to enforce the award must file it, together with evidence of the arbitration agreement on which it is founded, as part of a summary procedure.

Domestic commercial arbitral awards are enforceable once they are entered as orders of the superior courts of the provinces, also through a procedure that is intended to be summary in nature. Once an award is converted into a court judgment, all usual remedies available to the holder of a court judgment are available.

 

Foreign awards

33. Is your jurisdiction party to international treaties relating to recognition and enforcement of foreign arbitration awards, such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention)?

Awards made in Canada are generally enforceable in other jurisdictions, subject to the laws applicable in those jurisdictions. Canada is a party to the New York Convention.

 
34. To what extent is a foreign arbitration award enforceable in your jurisdiction?

Canadian courts enforce international commercial arbitral awards under the New York Convention and the UNCITRAL Model Law. Typically, the party seeking to enforce the award must file it, together with evidence of the arbitration agreement on which it is founded, as part of a summary procedure. The grounds on which enforcement can be denied are limited to those set out in the New York Convention and the UNCITRAL Model Law. Canadian courts construe these grounds very narrowly, and generally enforce international awards.

UK and US awards are enforceable in Canada.

 
35. What is the limitations period applicable to actions to enforce international arbitration awards rendered outside your jurisdiction?

There is no answer content for this Question, as it is a new addition to the template that did not exist at the time of writing.

 

Length of enforcement proceedings

36. How long do enforcement proceedings in the local court take, from the date of filing the application to the date when the first instance court makes its final order? Is there an expedited procedure?

The length of the enforcement proceedings in an international commercial arbitral award depends on whether the respondent contests the enforcement. Canadian provincial legislation implementing the New York Convention and the UNCITRAL Model Law contemplates a summary procedure, typically on the basis of affidavit evidence.

An uncontested enforcement proceeding may be completed in as little as four weeks, and a contested proceeding can take about three to four months. If the order enforcing the award is appealed (see Question 25), the process takes longer.

 

Reform

37. Are any changes to the applicable legislation or the legal framework currently under consideration or being proposed?

Generally, the courts encourage and protect the rights of parties to resolve disputes by arbitration. It is a fundamental rule that courts will enforce contractual agreements to arbitrate disputes. The courts will limit intervention in arbitration proceedings, prefer arbitral autonomy and strive to implement the agreement of the parties.

Canadian lawyers' experience of having common law and civil law legal systems operating together provides them with a unique ability to act in international arbitrations. Canadian arbitrators and arbitral counsel are highly experienced and in demand for international arbitration.

There are no major reforms underway.

Courts in Canada have begun to focus on proportionality, co-operation and flexibility in their processes. Both arbitrators and counsel tend to also practice in the courts. As a result, developments in court procedures tend to be implemented immediately.

 

Main arbitration organisations

The ADR Institute of Canada (ADRIC)

Main activities. The ADRIC administers arbitration under its own rules from its headquarters in Toronto, or through regional affiliates. It also trains arbitrators and mediators, and grants accreditations (C.Arb. and C.Med.).

W www.adrcanada.ca

The British Columbia International Commercial Arbitration Centre (BCICAC)

Main activities. The BCICAC is located in Vancouver. It can conduct domestic and international arbitrations in Canada and elsewhere.

W www.bcicac.com

The International Chamber of Commerce (ICC)

Main activities. The ICC is active in Canada through the Arbitration Committee of the Canadian Chamber of Commerce, which acts as the National Committee for the ICC in Canada.

W www.chamber.ca



Contributor profiles

Lawrence E Thacker

Lenczner Slaght Royce Smith Griffin LLP

T +1 416 865 3097
F +1 416 865 9010
E lthacker@litigate.com
W www.litigate.com

Professional qualifications. Canada, Bar of Ontario, 1995

Areas of practice. Commercial litigation; international commercial arbitration; class actions.


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