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Arbitral proceedings

Starting an arbitration proceeding
What is needed to commence arbitration?

Arbitration proceedings are commenced when a request to arbitrate is received by the other party.

Limitation periods
Are there any limitation periods for the commencement of arbitration?

The legislation does not address limitation periods.  Parties should keep in mind the limitation period(s) stipulated by the law applicable to the merits of the dispute.

Procedural rules
Are there any procedural rules that arbitrators must follow?

Parties must be treated equally and given a full opportunity to present their case.  Unless the parties have agreed that no oral hearings shall be held, the arbitrators must hold hearings at an appropriate stage of the proceedings.  

Dissenting arbitrators
Are dissenting opinions permitted under the law of your jurisdiction?

Dissenting opinions are permitted, but they are uncommon.  In Quebec, they automatically form part of the award.

Judicial assistance
Can local courts intervene in proceedings?

Local courts can intervene in limited circumstances where requested to do so by one or more of the parties or the tribunal.  In particular, and consistent with the UNCITRAL Model Law, a party can apply to the court for interim measures and the tribunal can seek the assistance of the court in taking evidence, such as production of documents by non-parties and the taking of evidence from third-party witnesses.

Can the local courts assist in choosing arbitrators?

Canadian law permits parties to choose their own arbitrators and allows parties to request third-party, institutional or court assistance in the appointment process.  Courts may also be involved in the appointment of arbitrators in ad hocarbitrations or where neither the applicable arbitration rules nor the arbitral clause provides for an appointing authority.

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

If a respondent fails to participate in arbitration by not providing a statement of defence or not appearing at a hearing, the tribunal may undertake the arbitration without that party and can issue an award based on the evidence that has been placed before it. A tribunal will usually provide the respondent with every opportunity to participate before it proceeds in the party’s absence. 

The UNCITRAL Model Law allows for the court to provide assistance in taking evidence; thus, a court can issue subpoenas to third parties in support of the arbitration process.

Under the Quebec Code of Civil Procedure, witnesses can be summoned to appear and produce documents before a tribunal in the same manner as in court proceedings and if a witness fails to appear, a party may request a judge to compel the witness to appear. Also, where a witness refuses to answer or to produce relevant evidence in his possession  without valid reason, a party may, with leave of the arbitrators, apply to a judge for a ruling of contempt of court.

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

There is no general statutory basis on which a non-consenting third party may be joined to an arbitration or bound by an arbitral award.  In certain cases, however, a third party may nonetheless be bound where consent to arbitration can be found to exist.  As an example, the applicable substantive law or the terms of the agreement may provide that the third party has rights and obligations under said agreement (eg, in case of an agency relationship between a signatory and the third party, or in case of trusteeship or successors or assigns).  Consent may also result from a subsequent agreement between the third party and the signatories; or the conduct of the third party may lead to an equitable estoppel precluding it from asserting the absence of its signature to avoid arbitration.

Courts in Ontario and Quebec have given some recognition to the ‘group of companies’ doctrine to approve the involvement of non-signatory parties in an arbitration on the basis of their relationship with the signatories and their connection to the issues in dispute (Xerox Canada Ltd v MPI Technologies Inc, 2006 CanLII 41006 (Ont SCJ) andDécarel Inc v Concordia Project Management Ltd, JE 96-1612 (QCCA)).  The case law remains limited, however.  On rare occasions, the corporate veil may be pierced to reach a parent or other related entity where that entity was acting as an agent or puppet of its controlling shareholder, or where to find otherwise would achieve a result “too flagrantly opposed to justice” (Kosmopoulos v Constitution Insurance Co, [1987] 1 SCR 2).

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

In the absence of an agreement between the parties, the tribunal shall determine the language and location of the arbitration proceedings, taking into consideration the circumstances of the case, including the convenience of the parties and tribunal members. 

Gathering evidence
How is evidence obtained by the tribunal?

The parties are free to determine the evidentiary rules and the forms of evidence which will be available to the tribunal.  In the absence of such agreement, these issues are decided by the tribunal and typically set out in a procedural order. 

The parties or the tribunal can apply to the local court for assistance in gathering evidence from non-parties, such as orders for the production of documents or summonses for third-party witnesses to attend to be examined.  

What kinds of evidence are acceptable?

The scope of documentary evidence and the manner of its production are generally to be agreed upon prior to the hearing.  Witness evidence typically takes the form of written witness statements (in lieu of direct examinations) and cross-examination under oath before the tribunal.  Experts are frequently required and are typically retained by the parties rather than the tribunal.  An expert’s opinion is expected to be objective and independent.  Experts’ reports are exchanged in advance of a hearing and delivered to the tribunal. A tribunal may require experts to confer among themselves to narrow the points of disagreement.

The tribunal can determine the admissibility, relevance, materiality and weight of evidence as it deems appropriate.   The International Bar Association Rules on the Taking of Evidence in International Arbitration often apply by agreement or by tribunal order. 

Confidentiality
Is confidentiality ensured?

Arbitration is a private process and hearings are not open to the public.  However, the issue of confidentiality of arbitration proceedings has yet to be addressed conclusively by Canadian courts.  While the general view among practitioners is that Canadian courts will follow the trend set by other jurisdictions in recognising an implied duty of confidentiality, parties wishing to ensure the confidentiality of their arbitration proceedings seated in Canada should enter into a specific agreement to that effect if confidentiality is not already stipulated in the arbitration agreement or provided for by the arbitration rules. 

Can information in arbitral proceedings be disclosed in subsequent proceedings?

The position relating to evidence produced and pleadings filed in an arbitration seated in Canada is uncertain.  Parties are advised to address this issue in their arbitration agreement or through the selection of arbitration rules.  Court proceedings in Canada are open and, to the extent that parties to arbitration seek the assistance of a court and submit evidence produced or pleadings filed in the arbitration in support of court assistance, any confidentiality which may have attached to those materials will likely be lost. A party may request that trade secrets or other sensitive information be redacted, in which case an application to the court during judicial proceedings must be sought.

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

No arbitration-specific standards or codes apply. The ethical and professional obligations set by the body in each provincial or territorial law society are binding on all practising members acting in a regulated capacity, which includes international arbitrations. The Canadian Bar Association’s Code of Professional Conduct also establishes the standards that apply to every Canadian lawyer, and both counsel and arbitrators are meant to abide by its Principles of Civility for Advocates.

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