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Arbitral proceedings

Starting an arbitration proceeding

What is needed to commence arbitration?

The general UNCITRAL Model Law requirements apply in Canada – that is, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for referral of that dispute to arbitration is received by the respondent (or applicable institution), unless the parties have stipulated extra requirements in their arbitration agreement.

Domestic legislation in Ontario, Alberta, Manitoba, New Brunswick, Nova Scotia and Saskatchewan provides for arbitration to be commenced in any way recognised by law, including serving notice on the other parties.

Limitation periods

Are there any limitation periods for the commencement of arbitration?

Limitation periods track applicable limitation legislation in the provinces. For example, some domestic arbitration legislation expressly provides that the law with respect to limitation periods applies to arbitration as if the arbitration were an action and the matter in dispute in the arbitration were a cause of action. Generally, a legal proceeding, whether in court or through arbitration, must be commenced within two to six years from the date on which the cause of action was discovered, depending on the jurisdiction and cause of action.

Procedural rules

Are there any procedural rules that arbitrators must follow?

Arbitration legislation in Canada is not overly prescriptive as to procedure, other than general provisions relating to the availability of particular procedures and the court’s ability to assist arbitration proceedings. Generally, the legislation provides the parties and the tribunal with the power and flexibility to shape their own procedure; tribunals are required to conduct the arbitration in the manner they consider appropriate, subject to the parties’ rights of procedural fairness and goals of efficiency and reduced costs. Institutional rules are often more prescriptive and will be respected by the courts.

Dissenting arbitrators

Are dissenting opinions permitted under the law of your jurisdiction?

Apart from in Quebec, dissenting opinions are not addressed by Canadian arbitration legislation. As a result, except where parties agree to the contrary, the tribunal does not require specific legislative authority to release a dissent. The Quebec Code of Civil Procedure does not explicitly address dissenting opinions but indicates that each arbitrator may state, in the award, his or her conclusions and the reasons on which they are based. This suggests that even where the decision is not unanimous, dissenting arbitrators remain entitled to state, in the award, their reasoning.

Judicial assistance

Can local courts intervene in proceedings?

International arbitration legislation, as well as more recent domestic arbitration legislation, generally states expressly that judicial intervention in the arbitral process is to be limited and courts are not to intervene except to the extent provided for in the legislation. Generally, courts in Canada respect their limited role.

Can the local courts assist in choosing arbitrators?

Under the Model Law, if a party fails to appoint an arbitrator or co-arbitrators fail to appoint a chair within the required time periods, a party may request that the court make the appointment. In the case of a single arbitrator, if the parties cannot agree, a party may request that the court make the appointment.

Under domestic arbitration legislation in Ontario, Alberta, Manitoba, New Brunswick, Nova Scotia and Saskatchewan, the court may, with discretion, appoint the arbitral tribunal on a party’s application, if the arbitration agreement is silent on the appointment procedure or if the person with the power to appoint the arbitral tribunal has not done so within the time provided for in the agreement or after a party has given the person seven days’ notice to do so. Legislation in other provinces is similar.   

What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?

Default judgment is not permitted. Where a party fails to appear at a hearing or produce documentary evidence, the arbitral tribunal may proceed with the arbitration in a manner that it considers appropriate and make an award on the evidence before it. A failure by the respondent to communicate his or her statement of defence in accordance with the agreed procedure and legislation is not to be treated as an admission of the claimant’s allegations. 

Third parties

In what instances can third parties be bound by an arbitration agreement or award?

Canadian courts have recognised a number of international principles with regard to the binding of non-signatories, including:

  • where the contractual agreement between a party and the non-party incorporates the arbitration clause by reference;
  • where there is an agency relationship between a party and a non-party;
  • where the corporate veil is pierced as a result of a sufficiently close relationship between a parent and subsidiary to hold one corporation legally accountable for the other; or
  • by estoppel.

The overriding principle of consent to arbitrate is often considered by courts, including findings of implied consent of a non-signatory to be bound to an arbitration agreement.

Default language and seat

Unless agreed by the parties, what is the default language and location for arbitrations?

Language is addressed only by the international arbitration legislation, which provides that parties are free to agree on the language(s) to be used in the arbitral proceedings. If parties are unable to agree, the arbitral tribunal will determine the language(s) to be used having considered both the principle and practicality of a particular language. Typically, the arbitration should be held in the language in which the contract is written and in which the parties conduct their business relationship.

Under the British Columbia International Commercial Arbitration Centre’s International Commercial Arbitration Rules, the default location for arbitrations is Vancouver, British Columbia. Under Nova Scotia’s Commercial Arbitration Act, the default location is Halifax, unless otherwise agreed.

Gathering evidence

How is evidence obtained by the tribunal?

Canadian arbitration legislation generally affords arbitrators more flexible rules of evidence than those afforded to the courts. Arbitral tribunals have broad discretion to conduct the arbitration in a manner that they consider appropriate to avoid unnecessary delay or expense and to provide a fair and efficient means for the final resolution of the parties’ dispute. Flowing from that discretion is the power to

  • determine the admissibility, relevance, materiality and weight of any evidence;
  • exclude cumulative or irrelevant evidence; and
  • direct the parties to focus their evidence or argument on specific issues which may assist in the disposal of all or part of the dispute.

Domestic legislation applies in much the same manner, with slight variances across jurisdictions. 

What kinds of evidence are acceptable?

Parties tend to agree upon the scope of documentary evidence and the manner of its production prior to a hearing. The tribunal has the power to determine the admissibility, relevance, materiality and weight of evidence.

Generally, in lieu of direct examination, witness evidence is provided in the form of written statements and cross-examined under oath before the tribunal. Expert evidence may be adduced by the parties or in certain circumstances tribunals may retain experts. The evidence is generally provided in a written report followed by oral examinations in a hearing.

Confidentiality

Is confidentiality ensured?

Domestic and international legislation provides that unless otherwise agreed by parties or required by law, all communications are to remain private and confidential. However, the ability to maintain confidentiality is limited. For example, if court assistance is required or a party applies to set aside or enforce an award, the arbitration will generally become a matter of public record – including the award itself and likely many, if not all, of the pleadings. As a practical matter, information regarding the existence of the arbitration may also be inadvertently disclosed by persons involved in the proceedings but who would not normally be bound by any confidentiality agreement, including couriers and third-party witnesses.

Can information in arbitral proceedings be disclosed in subsequent proceedings?

Generally, information from arbitral proceedings should not be disclosed in a subsequent proceeding without the consent of the parties, but there are no explicit legislative provisions addressing this issue. Parties are encouraged to address this issue in their arbitration agreement or through the selection of arbitration rules. Parties must also be aware that the confidentiality of the arbitral proceedings may be lost through court interventions as court proceedings in Canada are public.

Ethical codes

What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

There is no simple answer to this question. In Canada, lawyers will generally be held to the standards applicable to them as set out in provincial and federal legislation and standards applicable to Canadian lawyers, regardless of where they are practising (eg, a Canadian lawyer appearing in the United States will likely be considered bound by Canadian ethical standards). Foreign lawyers acting as counsel and arbitrators in arbitrations seated in Canada would likewise likely be considered to be bound by the codes which apply to them in their home jurisdiction. As far as we know, a Canadian court or law society has not penalised a foreign lawyer appearing in an arbitration proceeding in Canada.

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