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.
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.
Delay is a common complaint of parties in international arbitration. Understandably, many parties would like to resolve their disputes efficiently and without spending an exorbitant amount of time or money. On the other hand, some parties find delay to be in their best interest at certain stages of dispute resolution, which brings truth to the amusing saying “one person’s delay is another person’s due process.”
In Jacob Securities v Typhoon Capital, 2016 ONSC 604 (“Jacob 1”) the Ontario Superior Court dismissed an application challenging the legitimacy of an international arbitration Final Award and the awarding arbitrator’s impartiality.
The Court then, in Jacob Securities v Typhoon Capital, 2016 ONSC 1478 (“Jacob 2”), ordered the unsuccessful applicant to pay partial indemnity costs for what the Court called a “baseless” application. Continue Reading Ontario Court Dismisses Application to Set Aside Award, then Punishes Applicant With Indemnity Costs for “Baseless” Challenge to Arbitrator’s Impartiality