Thursday, July 25, 2013

Primacy of arbitration agreements and need to respect arbitration process

Hopkins v. Ventura Custom Homes Ltd., 2013 MBCA 67 has a useful summary of the law relating to the primacy of arbitral agreements:



[15]                     Many courts at all levels have accepted the primacy of arbitration agreements and the need to respect the arbitration process that has been chosen by the parties.  In Burlington Northern Railroad Co. v. Canadian National Railway Co. (1995), 59 B.C.A.C. 97, Cumming J.A., in dissent, adopted by the S.C.C., 1997 CanLII 395 (SCC), [1997] 1 S.C.R. 5, upheld the motion judge's order staying the action.  In doing so, he stated (at paras. 57-58):


I find support for [staying the court] action in the words of Campbell, J., in Boart Sweden AB v. NYA Stromnes AB reflex, (1988), 41 B.L.R. 295 (Ont. H.C.) at pp. 302-303:

"Public policy carries me to the consideration which I conclude is paramount having regard to the facts of this case, and that is the very strong public policy of this jurisdiction that where parties have agreed by contract that they will have the arbitrators decide their claims, instead of resorting to the courts, the parties should be held to their contract."

That passage has been cited with approval: see Automatic Systems Inc. v. Bracknell Corp. et al. 1994 CanLII 1871 (ON CA), (1994), 74 O.A.C. 111; 18 O.R. (3d) 257 (C.A.), BWV Investments Ltd. v. Saskferco Products Inc. et al. 1994 CanLII 4557 (SK CA), (1994), 125 Sask.R. 286; 81 W.A.C. 286; 119 D.L.R. (4th) 577 (C.A.).  It is equally applicable here.


[16]                     A similar statement was made by Juriansz J.A., for the court, in Ontario v. Ontario First Nations Limited Partnership 2004 CanLII 34913 (ON CA), (2004), 73 O.R. (3d) 439 (C.A.), regarding s. 6 of the Ontario arbitration legislation (which is the same as s. 6 of the Act) (at para. 26):

Section 6, while allowing more scope for judicial intervention than does the Model Law, directs the court not to intervene except for the specified purposes.  The purposes listed should be construed narrowly in accordance with the objective of the section to restrain judicial intervention.  Under the rubric of assisting the conduct of the arbitration, ensuring the arbitration is conducted in accordance with the agreement, or preventing unequal or unfair treatment, the court should not decide a question in the first instance simply because it expects that, if the question is left to the arbitrator, the unsuccessful party will appeal.  This is not only because the court should give effect to the parties' prior agreement to settle their disputes through arbitration, but also because on an appeal, the arbitrator's decision in the first instance may be of assistance to the court, and as well arbitration may provide a cheaper and more flexible process for making any findings of fact that might be necessary to decide the question.  Rather, in exercising its discretion under s. 6, the court should take a pragmatic approach and intervene only when there are undoubted practical reasons for doing so.  ….


(See also Bloomer Hotel Corp. et al. v. Boehm Hotel Corp. et al., 2009 MBCA 68 (CanLII), 2009 MBCA 68 at para. 19, 240 Man.R. (2d) 69; and Ontario v. Imperial Tobacco Canada Ltd. et al., 2011 ONCA 525 (CanLII), 2011 ONCA 525 at paras. 33-35, 281 O.A.C. 329.)


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