In two recent cases, the Quebec Superior Court and Court of Appeal have confirmed that parties who are unhappy with the procedural decisions of arbitrators cannot seek to have the courts intervene in order to review those decisions. This is a desirable confirmation in Quebec law of the principle of the autonomy of arbitral procedure under the UNCITRAL Model Law on International Commercial Arbitration.
In Endorecherche Inc. et al v. Université Laval et al.1 the petitioning parties sought to overturn a decision made by the arbitrators requiring the disclosure of various documents requested by the claimants. The contract between the parties provided for the disclosure of relevant documents upon the demand of the claimants. The petitioners argued that the arbitrators had exceeded the scope of the arbitration agreement in the extent of the documents ordered to be disclosed, which they claimed was a ground for annulment under the Quebec Code of Civil Procedure.
Both the Superior Court and the Court of Appeal rejected the petitioners’ attempt to involve the courts in a review and the Court of Appeal specifically pointed out that the arbitrators’ decision was a procedural order.
Book VII, Title I of the Quebec Code of Civil Procedure lays down the rules of arbitral procedure for parties who choose Quebec rules to govern their proceedings. Title I also sets out the scope of intervention available to the courts. There is no general power of review of arbitral procedural decisions. In fact, Article 944.1 provides that arbitrators have full authority to determine the procedure to be applied in arbitral proceedings. Both the Quebec Court of Appeal2 and the Supreme Court of Canada3 have previously confirmed that when it comes to arbitral proceedings, the courts have no general power of review and supervision, as they do over administrative decision-makers and quasi-judicial tribunals. The arbitral process is to be understood differently and the legislature has recognized that difference by limiting the power of the courts to intervene.
In a more extensive judgment in Terrawinds Resources Corp. et al. v. ABB Inc.,4 the Superior Court also found that there can be no court intervention on a procedural issue arising from arbitral proceedings.
In that case, Terrawinds and related companies sought to overturn the decision of the arbitrators to disallow examinations on discovery. The arbitrators had decided to permit document disclosure but no oral examinations prior to the hearing on the merits. The petitioners unsuccessfully tried to characterize that decision as an award, i.e., a decision on the merits of the dispute, in order to trigger the power of the Quebec courts to annul an arbitral award.
The Superior Court confirmed that Book VII, Title I of the Code of Civil Procedure does not permit the court to review the procedural rulings of arbitrators. The Court even questioned the reasoning of a previous judgment of the Superior Court in which it had concluded that it had jurisdiction to review an arbitrator’s decision regarding the capacity of a lawyer to represent a party in arbitral proceedings.5 The Court in Terrawinds stated that to sit in review of such a decision would be to assume that Title I provides for that jurisdiction, although it does not. As the Court observed, there are limited grounds of intervention available to the courts in matters of arbitration. If the application before the court does not invoke one of these grounds, there is no jurisdiction to intervene.
These decisions of the Quebec courts dovetail with a recent decision of the Ontario Court of Appeal,6 where it confirmed under its arbitration statute that a party could not seek the intervention of the Ontario courts on an issue of security for costs.
A comprehensive review of the grounds on which a Canadian court can intervene in arbitral proceedings was conducted by Professor Frédéric Bachand of McGill University several years ago.7 Meanwhile, in a very useful essay reviewing international trends in court intervention during arbitral proceedings, the prominent Swedish arbitration lawyer and former general counsel to the Arbitration Court of the International Chamber of Commerce, Sigvard Jarvin, confirmed that the consensus in international commercial arbitration is that there are very limited grounds for court intervention during arbitral proceedings.8 Endorecherche and Terrawinds are the latest judicial commentaries confirming the international consensus that has been consolidated under the Model Law.
Any trend to the contrary would defeat one of the main purposes of arbitration: expeditiousness in arriving at a definitive resolution of the parties’ dispute. To allow court intervention in procedural decisions of arbitrators would render arbitration no different from proceedings before a court of first instance, where there are normally avenues of appeal in respect of procedural rulings (either with leave or as of right), with all the attendant delays. If arbitral proceedings are to be no different from judicial proceedings on this point, they will simply end up being a more costly form of dispute resolution with very few advantages.