Limitation of liability clauses in contracts are approached very differently in Canadian law and U.S. law. Under Canadian law, such clauses are almost always enforced in commercial transactions, and are exceedingly difficult to get around for plaintiffs whose claims exceed the stipulated damages. Under U.S. law, by contrast, such clauses are not enforceable in contracts for the sale of goods if the result would be a “failure of essential purpose”. This difference between the two legal regimes has important implications for the drafting of contracts for cross-border transactions, and for litigating cross-border contractual disputes.
The High Court of Delhi in India recently enforced an international arbitral award arising from the London Court of Arbitration between a Japanese and an Indian entity. Both the size of the award and the court’s willingness to enforce it in India against an Indian corporation make this an important decision.
A recent decision from the Paris Court of Appeal raises interesting questions about the role of the adverse inferences doctrine in international arbitration.
Although the Court was clear in stating that the majority of arbitrators on the International Chamber of Commerce (“ICC”) panel based their decision on the exhibits in front of them, the decision has potentially widened the scope and applicability of the adverse inferences doctrine.
The Divisional Court recently upheld the Ontario Superior Court’s decision in T. Films S.A. v. Cinemavault Releasing International Inc. (“T. Films”) which granted recognition and enforcement of a successful arbitral plaintiff’s award and crafted an enforcement remedy using other legal tools (the oppression remedy and breach of trust) to foil the arbitral defendant’s “shell game” tactics. Corporate affiliates and a director were ultimately held liable for the arbitral award. These tools should be considered by parties seeking enforcement in Ontario.
New rules (the “ICC Rules”) for arbitration in the International Chamber of Commerce (“ICC”) came into force on March 1, 2017.
The ICC Rules set out a new procedure for expedited arbitrations. The expedited procedure provides for arbitrations to be concluded in six months for claims not greater than US $2 million or where the parties have “opted in” to use this new process.
On March 22, 2017, the Ontario government enacted the International Commercial Arbitration Act, 2017 (“ICAA 2017”) as part of broader legislation to reduce regulatory burdens on businesses and achieve costs savings for government. ICAA 2017 replaces a previous version of the law enacted in 2006 (“ICAA 2006”).
In Venezuela Holdings et al v Bolivarian Republic of Venezuela (“Venezuela Holdings”) an ad hoc Committee for the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”) nullified part of an arbitration award issued by an ICSID Tribunal that required the Government of Venezuela to pay $1.4 billion to certain subsidiaries of ExxonMobil (collectively, “ExxonMobil”). The arbitration award largely reflected compensation resulting from the nationalization one of ExxonMobil’s oilfield projects in 2007. However, on appeal the Committee held that the Tribunal erred in its approach to a price cap to compensation, which rendered the arbitral award a nullity. Venezuela Holdings, therefore, marks a victory for resource-rich governments and sends a cautionary note to foreign investors.
In Judgment No. 102/2017, the Civil Chamber of the Spanish Supreme Court (Tribunal Supremo) (the “Supreme Court“) dismissed an appeal of two high profile arbitrators (the “Arbitrators”) ordering them to return to German athletic apparel multinational PUMA SE (“Puma”) all fees, plus interest and costs, received from Puma during an ad hoc arbitration seated in Madrid in 2010.
The selection of an appropriate “seat” is arguably one of the most important decisions parties to an arbitral agreement are called upon to make. Generally, the “seat” refers to the city and the “law of the seat” refers to the seat’s legal jurisdiction (e.g. for an arbitration seated in Toronto, the law of the seat would be the Province of Ontario).
In order to protect the integrity of the arbitration process, arbitrators are generally found to be immune from civil liability arising from their role in an arbitration. Many institutional arbitration rules provide for a limitation of an arbitrator’s liability, and courts have routinely held that arbitrators are immune from legal action with respect to acts performed by them in the exercise of their functions.