Effective March 22, 2017, Ontario enacted the International Commercial Arbitration Act, 2017 (ICAA), replacing a previous version of the law that had been in effect since 2006. The new ICAA includes changes which are designed to modernize international commercial arbitration in Ontario and to make Ontario a more desirable place to arbitrate such disputes. The ICAA applies to all international commercial arbitration agreements and awards whether made before or after the statute came into force.
KEY CHANGES IN THE NEW ICAA
Although the fundamentals of Ontario’s international arbitration regime remain the same, the new ICAA reflects a number of important changes. These include:
1. Adoption of the New York Convention
The ICAA expressly provides that the New York Convention has the force of law in Ontario. This convention is recognized as the leading international instrument guiding the enforcement of international arbitral awards. Although Canada adopted the New York Convention in 1985, there was some uncertainty about whether it applied in Ontario. The new ICAA eliminates that doubt.
2. Incorporation of the 2006 UNICTRAL Model Law
Through the ICAA, Ontario has become the first province in Canada to adopt “best practices” amendments made in 2006 to the Model of the United Nations Commission on International Trade Law (UNCITRAL). The Model Law is appended as a schedule to the new statute. The key changes in the 2006 Model Law include:
- Modernizing recording requirements for arbitration agreements. While under the previous regime arbitration agreements had to be concluded in writing, under the new ICAA such agreements must only be recorded in writing. This means that agreements may be concluded orally or by conduct. Further, the term “writing” has been updated to include electronic communications, including email.
- Enabling international tribunals to grant interim measures and make preliminary orders. Interim measures are defined to include any temporary measure granted by an arbitral tribunal at the request of a party before the dispute is finally decided. Such measures may be sought to maintain the status quo, prevent prejudice to the arbitration process, or preserve assets or evidence (such as through a freezing order). The tribunal may further issue preliminary orders directing parties not to frustrate the purpose of an interim measure. Under the Model Law, Ontario courts will be encouraged to recognize and enforce such orders.
3. Increasing the limitation period for award enforcement from two to 10 years
The new ICAA extends the general limitation period to enforce an arbitral award from two years to 10 years from the date of the award. This change has been enacted through a consequential amendment in the ICAA to the Ontario Limitations Act, 2002. This change aligns with equivalent amendments that have been made for domestic arbitrations under the Ontario Arbitration Act, 1991.