Comparative Guides
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Results: 4 Answers
International Arbitration
5.
The parties
5.1
Are there any restrictions on who can be a party to an arbitration agreement?
 
Canada
Parties to an arbitration agreement are determined in accordance with ordinary principles of contract law. Therefore, privity of contract limits who can be a party to an arbitration agreement. Persons that do not have the capacity to contract cannot submit to arbitration (J Brian Casey, International and Domestic Commercial Arbitration (Scarborough: Carswell, 1993-99, loose-leaf) at para 3.10(2)(a)).

Further, persons cannot be bound to arbitration proceedings without their consent (J Brian Casey, Arbitration Law of Canada: Practice and Procedure, 3rd ed (Huntington: JurisNet, LLC, 2017) at para 3.10(2)(d)).

There is no legislative regime in Canada enabling the joinder of third parties to an arbitration. In certain circumstances, non-parties can be bound through the operation of doctrines of contract law such as agency and assignment (MJ Mustill and SC Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (London: Butterworths, 1989), at pp137-138). Non-parties may also be bound:

  • when a contract between a party and non-party incorporates the arbitration clause by reference;
  • when a non-party is in a parent-subsidiary corporate relationship with a party and it is justified to hold one legally accountable for the other; or
  • by estoppel (DNM Systems Ltd v Lock-Block Canada Ltd, 2015 CarswellBC 3179, 2015 BCSC 2014 at para 77).

Under Section 11.1 of the Consumer Protection Act, a Quebec consumer cannot be forced to go to arbitration whether it is an internal or cross-border transaction. In all cases, the consumer will have the choice to have the dispute settled by the judicial system, notwithstanding the presence of an arbitration clause in the contract concluded between the consumer and the merchant. Employees in Quebec benefit from generally similar protections.

For more information about this answer please contact: Mark Gelowitz from Osler, Hoskin & Harcourt LLP
5.2
Are the parties under any duties in relation to the arbitration?
 
Canada
Under the voluntary International Bar Association Guidelines, a party has a duty to inform the arbitrator, other parties and the arbitration institution about any direct or indirect relationship between it (or a related company) and the arbitrator. Parties must do so at their own initiative before the proceeding commences, or as soon as they become aware of the relationship (International Bar Association, “IBA’s Guidelines on Conflicts of Interest in International Arbitration”, www.ibanet.org). Neither the UNCITRAL Model Law nor the domestic statutes contain the same requirements for parties to disclose any relationship with the arbitrator(s). The onus is typically on the arbitrator to disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence (UNCITRAL Model Law, Art 12(1); Commercial Arbitration Act (RSC, 1985, c 17 (2nd Supp), Ch 5 Sch 1, Art 12(1); International Commercial Arbitration Act, RSBC 1996, c 233, s 12(1)).

While it is unclear whether a duty of confidentiality arises in respect to international arbitrations, there is a prevalent assumption that parties are under a duty of confidentiality with respect to communications and documents disclosed or prepared in relation to arbitration, except when disclosure is agreed to by the parties or required by law. However, an international arbitration cannot be assumed to be confidential in the absence of an express agreement or applicable rule in the procedural rules selected by the parties. UNCITRAL’s Notes on Organizing Arbitral Proceedings articulate that parties cannot assume that a duty of confidentiality will be recognised in a given jurisdiction unless the parties’ agreement or arbitration rules expressly address confidentiality (UNCITRAL’s Notes on Organizing Arbitral Proceedings, Section 6, at para 31).

With respect to arbitration awards, any duty incumbent on the parties to obey the award arises solely from the contract of submission (Winter v White (1819), 1 Brod & Bing 350 at p357, 129 ER 758).

There is no clear duty to comply with an arbitration agreement. One party’s failure to comply with its obligations pursuant to an arbitration agreement does not exempt the other party from continuing with the arbitration process; the arbitrator may address the breach of the arbitration agreement (J Brian Casey, Arbitration Law of Canada: Practice and Procedure, 3rd ed (Huntington: JurisNet, LLC, 2017) at para 3.14, citing Bremer Vulkan Schiffbau and Maschinenfabrik v South India Shipping Corp, [1981] AC 909 (HL); Paal Wilson & Co. A/S v Partenreederei Hannah Blumenthal, [1983] 1 All ER 34 (HL)).

In Quebec, neither the Code of Civil Procedure (CCP) nor the Civil Code of Quebec (CCQ) contains provisions regarding any express duties on parties in relation to the arbitration.

For more information about this answer please contact: Mark Gelowitz from Osler, Hoskin & Harcourt LLP
5.3
Are there any provisions of law which deal with multi-party disputes?
 
Canada
The term ‘multi-party’ refers primarily to the situation where there is one contract, but more than two parties. The principal concern is ensuring equal treatment of all parties and creating mechanisms for joinder of third parties to an arbitral reference. There is no legislative regime in Canada enabling the joinder of third parties to an arbitration. In certain circumstances, non-parties can be bound through the operation of doctrines of contract law, such as agency and assignment (MJ Mustill and SC Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (London: Butterworths, 1989), at pp37-138).

The term ‘multi-contract’ generally means that there are a number of contracts, possibly binding different parties. The main challenge is ensuring that all parties to the various contracts agree to consistent dispute resolution procedures, such as mechanisms for consolidation of proceedings. There is no national legislative provision providing for consolidation of claims in multi-contract scenarios; nor is there an applicable model provision under the UNCITRAL Model Law, which has been incorporated into the legislation of every province except Quebec. British Columbia, however, legislated a mechanism allowing for court-enforced consolidation, provided that the parties consent (International Commercial Arbitration Act, RSBC 1996, c 233, s 27(2)). In Quebec, neither the CCP nor the CCQ contains provisions that deal with multi-party disputes.

For more information about this answer please contact: Mark Gelowitz from Osler, Hoskin & Harcourt LLP