Lexpert Magazine

October 2017

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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54 LEXPERT MAGAZINE | OCTOBER 2017 | INTERNATIONAL COMMERCIAL ARBITRATION | ed Covanta v Barton-Marlow et al. (2016 ONSC 2044). e arbitrator had added parties to the arbitration at the request of another party, and the court found that this was beyond the arbitrator's jurisdic- tion. e subcontractors were not parties to the arbitration agreement but to a sup- plemental agreement; they thus could not be bound by an arbitral award. e court removed these added parties and referred the agreement to arbitration again. Québec Unlike the common-law provinces, Qué- bec's civil law has one integrated statute for domestic and International Arbitration. In 1996, Québec replaced the chapter on Arbitration in its Code of Civil Procedure with provisions based on UNCITRAL's 1985 Model Law, making more or less the same rules applicable to both domestic and international arbitration in the province. Québec, in contrast to the common-law provinces, considers an arbitration to be "international" if at least one of the par- ties to the dispute is headquartered outside Québec, even if it is in, say, British Colum- bia or Ontario. (In the other provinces, it would be considered a domestic arbitration and subject to the separate domestic arbi- tration statute.) Says Dalphond: "You have more, in a sense, International Arbitration in Qué- bec, because each time I have a case involv- ing a company from Ontario or one from BC, it's an International Arbitration, ac- and enforced as binding by Ontario's Supe- rior Court of Justice. Finally, the new Act sets a limitation period of 10 years for enforcing an arbitral award, from the date the award is made or the date on which a proceeding to set aside the award is concluded. Previously the limitation period was two years. is change provides needed clarity following the Supreme Court of Canada's 2010 ruling in Yugrane Corp. v Rexx Management (2010 SCC 19), in which the SCC held that local limitations laws also applied to the enforcement of an arbitral award, absent an express provision in the relevant legislation to the contrary. Even if the 10-year limitation period for enforcement of foreign arbitral awards were harmonized among all the provinces, a victorious party might still have to seek enforcement in several provinces. "But they would have a longer period of time to understand whether it was a commercially reasonable course of action," says Roy. "Two years doesn't give a party much time to collect themselves, retain counsel and start pursuing assets in different provinces in Canada." While the new Act is intended to pro- mote Ontario as a seat for International Arbitrations, at the very least it will en- sure that Ontario remains an arbitration- friendly jurisdiction that favours harmo- nized legal standards for recognition and enforcement of international arbitral law. Recent case law in the province includ- cording to the concepts used in Québec. But it doesn't matter because in Québec, Interprovincial and International Arbitra- tions are governed by the same set of rules." A new Code of Civil Procedure, which came into force in Québec in January 1, 2016, contains a chapter that reflects the 2006 Model Law. "e 2006 Model Law was taken in substance and codified in the larger Code of Civil Procedure, but with some changes in wording," says Dalphond. "But you don't find the Model Law at- tached to the Code of Civil Procedure." One significant deviation from the Model Law contained in the Code is the default clause for the composition of the ar- bitration panel. It stipulates that, for resolv- ing disputes in which the amount claimed is less than US$2 million, there will be one arbitrator unless the parties have agreed to have more. e Model Law provides for a panel of three arbitrators unless the parties have agreed otherwise. e reason for this deviation was to make the arbitration process faster and less expensive. is reflects a shi in the rules of the major International Arbitration in- stitutions. However, when major contracts are in dispute, says Dalphond, most parties will prefer to have three panelists rather than have their fate consigned to a single arbitrator. "ree can make a mistake, but the risk is reduced." Québec should advertise itself around the world as the perfect legal seat for Inter- national Commercial Arbitration, he says. "We're common law in the process and civil law in the reasoning. We're between Europe and the US, if you need a neutral spot with good access." British Columbia BC's International Commercial Arbitration Act is based on the original version of the Model Law, says Dentons' Craig Dennis. "It's pretty faithful to the 1985 Model Law; it doesn't spell out all aspects in as much de- tail, but the concepts are there." Under BC's former Liberal government, a working group was created to update the statute and thereby make Vancouver a more attractive seat of International Com- mercial Arbitration. One of the key provi- sions to be addressed in any update of the BC legislation would be the 2006 Model Law's evolution in the area of interim relief CHRISTOPHER MASICH MCKERCHER LLP "[Saskatchewan is an] export-dependent province. For us as practitioners to not have an international commercial arbitration law that adopts best practices to provide business certainty to international commercial transactions, it puts us behind the rest of Canada …"

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