The Ontario Court of Appeal has released its decision confirming that where it is possible to give effect to a mandatory arbitration clause, the court will strive to do so.

As described in our earlier blog post, the plaintiff, a Toronto based company, commenced an action in Ontario against its insurers, Equinox Global Limited and Lloyd’s Underwriters. The policy of insurance contained an arbitration clause with the seat of arbitration in London, England.  The endorsements, which prevailed over the Policy to the extent of any conflict, contained a provision as follows:

In any action to enforce the obligations of the Underwriters they can be designated or named as “Lloyd’s Underwriters” and such designation shall be binding on the Underwriters as if they had each been individually named as defendant. Service of such proceedings may validly be made upon the Attorney In Fact in Canada for Lloyd’s Underwriters, whose address for such service is 1155 rue Metcalfe, Suite 2220, Montreal, Quebec H3B 2V6. (the “Action Against Insurer Clause”)

Continue Reading Arbitration Clause Effective Despite Action Against Insurer Clause: Trade Finance Solutions v. Equinox Global Limited (Take Two)

In Larsen v. Citibank FSB[1], the U.S. Court of Appeals for the Eleventh Circuit concluded that the confidentiality clause in an arbitration provision contained in a bank account agreement was “substantively unconscionable”. The Court held that the confidentiality clause worked an information advantage to the bank which could learn from repetitive arbitration proceedings kept secret from one plaintiff customer to the next.

Though this case has to do with a consumer contract of adhesion, signed by many customers, the logic of the decision would seem to apply to any contract which, by the frequency of its signing, affords to one side knowledge of other similar arbitration proceedings while withholding that knowledge from other sides.

Continue Reading Larsen v Citibank FSB: Confidentiality of arbitration proceedings perhaps not assured

In the recent High Court of England and Wales decision, Glencore Agriculture B.V. and Conqueror Holdings Limited, the Commercial Court was asked to consider whether the notice of Arbitration and notice under section 17 of the Arbitration Act (the “Act”) sent via email was considered valid service. Justice Popplewell found that serving to the Claimant’s employee’s email address did not constitute valid service and set aside the final arbitration award.

Continue Reading Glencore Agriculture B.V. and Conqueror Holdings Limited: High Court of England Sets Aside Final Arbitration Award for Sending Arbitration Notice by Email

The question of whether a barrister is a person “with not less than 10 years’ experience of insurance or reinsurance” for the purposes of a standard form arbitration clause was recently considered at the High Court of England and Wales. In Tonicstar Ltd. v Allianz Insurance PLC and Sirius International Insurance CorporationJustice Teare, bound by an unreported decision, determined the appointed arbitrator was not qualified despite more than 10 years’ experience as a lawyer in insurance and reinsurances disputes.

Continue Reading Tonicstar Ltd. v Allianz Insurance PLC and Sirius International Insurance Corporation: Court determined appointed QC not qualified as arbitrator

On August 30, 2017 the Newfoundland and Labrador Supreme Court Trial Division released its decision in Newfoundland and Labrador v ExxonMobil Canada Properties et al, dismissing the Province’s application to set aside an arbitral award.[1]

The arbitral award, delivered in December of 2015 by a panel of three arbitrators (the “Award”), confirmed the deductibility for royalty calculation purposes of certain operating insurance costs individually acquired by certain oil companies with an interest in the Hibernia Project.[2]

The Court dismissed the Province’s set-aside application and affirmed the Award on the basis that: (1) the parties had deliberately contracted out of the set-aside provisions in the provinces’ Arbitration Act;[3] and (2) the parties’ agreement already established a clear procedure for reviewing the arbitral award. In this decision, Stack J. writes at length about party autonomy as it relates to contracting out, primarily finding that “sophisticated entities…do not require the aid of the Court to protect them from their own decisions”.[4]

Continue Reading Newfoundland v ExxonMobil: Court dismisses set-aside application calling parties “well-advised, sophisticated”

The Ontario Superior Court of Justice recently delivered a brief decision which placed an important caveat on the enforceability of arbitration clauses.

As discussed in previous posts, there is little doubt that mandatory arbitration clauses are given considerable deference by the courts in Canada. The fly in the ointment for the defendants in Trade Finance Solutions v Equinox Global Limited, 2016 ONSC 7988, who were hoping to enforce an arbitration clause, was that their insurance agreement with the plaintiff included both a mandatory arbitration clause and an endorsement addressing certain steps to be taken in the event of a court action.

Continue Reading Insurance Endorsement Becomes Chink in the Armour of an Arbitration Clause: Trade Finance Solutions v Equinox Global Limited

A recent decision from the Paris Court of Appeal raises interesting questions about the role of the adverse inferences doctrine in international arbitration.[1]

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.

Continue Reading Paris Court of Appeal Potentially Increases Scope of the Doctrine of “Adverse Inferences”

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.[1] Corporate affiliates and a director were ultimately held liable for the arbitral award. These tools should be considered by parties seeking enforcement in Ontario.

Continue Reading Enforcement Remedy Crafted by Ontario Court to Foil “Shell Game” Tactics

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.

Continue Reading This Kitten Has Claws: PUMA Prevails as Spanish Supreme Court Orders Clawback of €1.5 Million in Fees from Arbitrators Who Violated the Principle of “Arbitral Collegiality”

An agreement to arbitrate has long been considered one of the most powerful means for commercial entities to control their dispute resolution.  The arbitration clause allows businesses to ensure that they maintain control over the process for dispute resolution and, importantly, over public access to the details of any dispute which may arise.  Though the wording of a particular arbitration clause is important, as it governs the scope of disputes which may be sent to arbitration, the strength of arbitration clauses can be gauged by how they are treated in the courts and legislatures of Canada.

Continue Reading Ontario Court of Appeal Reaffirms that Agreements to Arbitrate are Strictly Enforced