Canada: Canadian-Based Arbitration Rules: March 10, 2015

As of January 2015, Canadian parties seeking to submit potential or existing disputes with Canadian counterparties to arbitration (i.e., domestic disputes) have two new options, where previously their Canadian-based rules options were limited and largely outdated.

(Note: The below discussion relates to rules aimed at domestic arbitration in Canada. If a potential or existing dispute is international in nature, different considerations apply, including considering international institutional rules options like the rules of the ICC, LCIA, SCC, SIAC, HKIAC and others (most, if not all, of which could also be used for a domestic arbitration in Canada). In any event, advice of counsel experienced in arbitral practice and procedure should always be sought).

One option is the revised and updated Arbitration Rules of the ADR Institute of Canada (ADRIC), which came into force on 1 December 2014. ADRIC was established in 2000 through the merger of two founding organizations, each with its own set of arbitration rules from 1996. The original version of the unified ADRIC National Arbitration Rules was launched in 2002 with isolated amendments implemented in 2008. The 2014 revisions are substantial, taking into account current best practices in arbitration and the needs of arbitration users.

Another option is the new Canadian Arbitration Rules of the International Centre for Dispute Resolution (ICDR), which came into force on 1 January 2015. The ICDR is the international arm of the American Arbitration Association (AAA). At the same time the ICDR launched the Canadian Arbitration Rules, it also established "ICDR Canada" with a view to providing full administrative dispute resolution services and support in English and French for Canadian domestic disputes nationwide. Thus, while the ICDR itself is an American arbitration institution, ICDR Canada is a new Canadian-only initiative. The ICDR Canadian Arbitration Rules are a new set of rules, based almost entirely on the ICDR International Arbitration Rules.

ADRIC Arbitration Rules

The 2014 revisions to the ADRIC Arbitration Rules seek to limit a common, and unfortunate, tendency in domestic arbitration for parties, their counsel and sometimes arbitrators, to adopt arbitration procedures that resemble court-litigation procedures. Parties choosing arbitration under the ADRIC Arbitration Rules should expect an arbitral procedure in which the benefits of conferring jurisdiction of their dispute to arbitration over the courts may be realized, including a faster and more efficient resolution.

However, although the ADRIC Arbitration Rulesprovide the framework for realizing these benefits, and others, parties should select counsel versed in arbitral practice to ensure that their procedural expectations are met. Such counsel will in turn be able to apply that experience to the arbitrator selection process to avoid arbitrators that may be unfamiliar with, or unwilling to apply, arbitral procedure over procedure akin to the courts. One of the most significant changes to the ADRIC Arbitration Rules is with respect to document production: the 2014 revisions now adopts the more commonly accepted and applied test that a requested document must be relevant and material to the outcome of the dispute (replacing an outdated general relevance test which in recent years was even broader than the rules of court in a number of Canadian provinces). Other new important provisions include: (a) the parties' ability to opt out of ADRIC administration; (b) an interim arbitrator mechanism for emergency relief; (c) a prohibition on examinations for discovery absent a tribunal order; (d) expedited arbitration procedures; and (e) a list and strike arbitrator- selection process.

ICDRCanada – Canadian Arbitration Rules

The Canadian Arbitration Rules adopt almost wholesale the ICDR International Arbitration Rules.  Thus, the Canadian Arbitration Rules contain an added element of international arbitral best practices – practices which have evolved over a number of decades in an effort to provide speedy, efficient and cost effective arbitration. They also have imbedded in them the benefit of the American Arbitration Association's vast experience in implementing and administering arbitration rules: the AAA was established in 1926. The Canadian Arbitration Rules, like the ICDR International Arbitration Rules provide, among other things:

  • Expedited procedures for claims less than $250,000, or on an opt-in basis;
  • Emergency arbitrator process for interim measures or other urgent relief;
  • Encouragement to mediate a dispute at any time during the arbitration proceeding;
  • Formal list method for selecting arbitrators;
  • Express power to arbitrators to protect the efficiency and integrity of the arbitral process; and
  • Recognition that oral and document discovery developed for domestic court procedures is "generally not appropriate" in arbitration.

The Canadian Arbitration Rules deviate from the ICDR International Arbitration Rules in the following ways:

  • 30 days to render an award versus a timeframe of 60 days;
  • No exclusion of punitive damages;
  • No limitation in the Rules respecting appeals; and
  • Recognition that oral and document discovery developed for domestic court procedures is "not necessarily appropriate" in arbitration, as opposed to "generally not appropriate".

Concluding Remarks

Other Canadian-based options for rules for domestic arbitration exist in Canada, but the ADRIC Arbitration Rules and the ICDR Canadian Arbitration Rules are progressive options. They provide parties with a framework to realize the benefits of arbitration. Parties selecting either of these Rules, and appointing experienced arbitration counsel and arbitrators, are most likely to reap arbitration's benefits and avoid potential pitfalls.

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