A recent Alberta Court of Queen's Bench decision in ENMAX Energy Corporation v. TransAlta Generation Partnership addresses long-standing legal principles such as stare decisis and res judicata in the context of arbitration proceedings. In doing so, the court highlights some of the differences between arbitration and court proceedings. The decision is of particular interest to those parties seeking assistance from the court with respect to questions of law during an extant arbitration in circumstances where the contract allows a party to do so.
In the late 1990s, the Alberta government made amendments to the Electric Utilities Act in order to fully deregulate the Alberta electricity generation market. As part of that deregulation, power purchase arrangements (PPAs) were enacted as an Alberta regulation and drafted as if they were contracts entered into freely between the owner of the applicable generating units and the buyer of the PPA. TransAlta Corporation owns and operates the Keephills Generation Facility and is obligated under the Keephills PPA to, among other things, provide generation services up to the committed capacity to ENMAX Corporation. TransAlta receives a rate of return in the form of payments for that committed capacity while ENMAX has, correspondingly, the exclusive right to make offers of electricity into the Alberta power pool.
As explained in the decision, ENMAX and TransAlta were parties to a prior arbitration and resulting award that occurred in 2010. In 2013, a new dispute arose between ENMAX and TransAlta, and TransAlta took the position that one of the discrete findings made by the arbitral panel in the prior arbitration (Discrete Finding) somehow “estopped” ENMAX from taking certain positions in the current arbitration.
The PPAs expressly provide that during an extant arbitration either party may refer a question of law to the court.
ENMAX applied to the court to have it decide three questions of law. In response, TransAlta contended that the three questions submitted were questions of fact, or questions of mixed law and fact, and not questions of law subject to determination by the court.
Justice M.D. Gates ruled in favour of ENMAX that all of the questions posed were questions of law. In doing so, Justice Gates engaged in a detailed analysis of the law regarding the jurisdiction of the court to consider such issues. Relying upon, among other cases, the decision of Chief Justice N.C. Wittmann in Alberta Medical Association v. Alberta (Minister of Health and Wellness), Justice Gates held that the court can determine questions of law that only require a cursory review of the evidence. The court confirmed that a past arbitral award is not binding precedent or authority for future arbitrations, and determined that the principle of stare decisis does not apply to arbitrations. In addition, the court, citing the Supreme Court of Canada’s decision in Canada Safeway Ltd. v. Manitoba Food and Commercial Workers Union, Local 832, confirmed that res judicata does not apply to private arbitrations particularly, as here, where the issues and facts are not the same between the arbitral proceedings.
The court also held that prior arbitral decisions are confidential, however, acknowledged there may be cases where disclosure is necessary to ensure a fair proceeding. As a result, the court concluded that the extent to which confidentiality may be overridden in favour of disclosure was an issue for determination by the arbitral panel on a document by document basis.
While TransAlta has appealed the decision, it remains an interesting case demonstrating the interplay between litigation and arbitration.