Comparative Guides

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4. Results: Answers
International Arbitration
Arbitration agreement
What are the validity requirements for an arbitration agreement in your jurisdiction?

Answer ... Under Canada’s federal arbitration legislation, an international arbitration agreement must be in writing (Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp), Sched 1, art 7(2) [renumbered 2012, c 26, s 25]). The right to arbitration and the binding force of arbitral awards are contractual obligations based on the mutual intention and agreement of the parties. The principles of formation and interpretation of contract apply (UNCITRAL Model Law, Article 7(2)).

The UNCITRAL Model Law, which forms the basis for provincial international arbitration legislation, requires an arbitration agreement to be in writing in one of the following forms (UNCITRAL Model Law, Article 7(2)):

  • a document signed by the parties;
  • an exchange of letters, telex, telegrams or other means of telecommunication that provide a record of the agreement; or
  • an exchange of pleadings in which the existence of an agreement is alleged and not denied.

The 2006 amendments to the UNCITRAL Model Law specifically provide that the requirement that an arbitration agreement be in writing can be met by electronic communication (2006 Amendments to UNCITRAL Model Law, Article 7(4)). In other words, the arbitration agreement can be concluded orally, by conduct or by other means, provided that its content is recorded. The requirement that the agreement be in writing can be met through the use of electronic communications, including electronic mail.

In relation to domestic arbitration, the formal requirements are set out in provincial legislation. Agreement to arbitrate is required – in some provinces, agreements need not be in writing, whereas in others, written agreements are required (Arbitration Act (Alberta), RSA 2000, c A-43, ss 1, 2; Arbitration Act (British Columbia), RSBC 1996, c 55, ss 1, 2; Arbitration Act (Manitoba), CCSM c A120, ss 1, 2; Arbitration Act (New Brunswick), RSNB 2014, c 100, ss 1, 2; Arbitration Act (Newfoundland and Labrador), RSNL 1990, c A-14, ss 2, 3; Arbitration Act (Nova Scotia), RSNS 1989, c 19, ss 2, 4; Arbitration Act, 1991 (Ontario), SO 1991, c 17, ss 1, 2; Arbitration Act (Prince Edward Island), RSPEI 1988, c A-16, ss 2, 4; Civil Code of Quebec, CCQ-1991, art 2638; Arbitration Act, 1992 (Saskatchewan), SS 1992, c A-24.1, ss 2, 3; Arbitration Act (Northwest Territories), RSNWT 1988, c A-5, ss 1, 2; Arbitration Act (Yukon), RSY 2002, c 8, ss 1, 2). In Ontario, for example, an arbitration agreement need not be in writing.

The key to a valid multi-party arbitration agreement is the consent of all of the parties involved, ideally within the same arbitration agreement. The fact that a number of parties have signed similar contracts for the same project, each containing an identical arbitration clause, may not be sufficient to demonstrate consent to a single arbitration. The arbitration agreement should also provide clearly for multi-party arbitrations in order to ensure one consolidated proceeding (Pierre Bienvenu and Martin Valasek, Arbitration Guide: Canada (Montreal: IBA Arbitration Committee, February 2018) (pdf)).

In Quebec, the Civil Code of Quebec (CCQ) specifies that an arbitration agreement shall be evidenced in writing. Section 2640 of the CCQ provides that the arbitration agreement is deemed to be evidenced in writing if it is contained in an exchange of communications which attests to its existence or in an exchange of proceedings in which its existence is alleged by one party and is not contested by the other party.

For more information about this answer please contact: Mark Gelowitz from Osler, Hoskin & Harcourt LLP
Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

Answer ... All common law provinces have incorporated into their international arbitration legislation Article 16 of the UNCITRAL Model Law, which provides that an arbitration clause must be treated independently from the other terms of the contract in which it is contained, and that the nullity of the contract does not entail, by operation of law, the invalidity of the arbitration clause (UNCITRAL Model Law, Article 16).

As for domestic arbitration, the common law doctrine of separability has been incorporated into several provincial arbitration acts (Arbitration Act (Alberta), RSA 2000, c A-43, s 17(3); Arbitration Act (Manitoba), CCSM c A120, s 17(3); Arbitration Act (New Brunswick), RSNB 2014, c 100, s 17(2); Arbitration Act, 1992 (Saskatchewan), SS 1992, c A-24.1, s 18(3); Civil Code of Quebec, CCQ-1991, art 2642). Courts in provinces that have not included separability in their respective arbitration acts have applied the doctrine nonetheless. According to case law, the part of the contract containing an arbitration agreement is considered to be a separate and independent contract (James v Thow [2005] BCJ No 1292, 5 BLR (4th) 315 (BCSC); Hebdo Mag Inc v 125646 Canada Inc, [1992] BCJ No 2960, 22 BLR (2d) 72 (BCSC)).

In Quebec, the CCQ provides that an arbitration agreement contained in a contract is considered to be an agreement separate from the other clauses of the contract. The CCQ also provides that in the situation where the arbitrators find the contract to be null, the arbitration agreement is not for that reason rendered null.

For more information about this answer please contact: Mark Gelowitz from Osler, Hoskin & Harcourt LLP
Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

Answer ... Parties are free to agree on the seat and language of an arbitration in their agreement (Commercial Arbitration Act (RSC , 1985, c 17 (2nd Supp)), Ch 5 Sch 1 Arbitration Act, 1991 (Ontario), c 17, s 22 (1)). Failing this, the tribunal will exercise its discretion to determine the procedure to be followed in an arbitration, including both the seat and language. The limitation on this power is that the parties must have an equal opportunity to make their case and meet the one against them (Moreau-Bérubé v New Brunswick (Judicial Council), [2002] SCJ No 9, [2002] 1 SCR 249 (SCC); Dr Q v College of Physicians and Surgeons of British Columbia, [2003] SCJ No 18, [2003] 1 SCR 226 (SCC); Canadian Union of Public Employees, Local 2404 v Grand Bay-Westfield (Town), [2005] NBJ No 404, 293 NBR (2d) 211 (NBQB)).

In Quebec, the law applicable to arbitration is provided for in the CCQ under Article 3121, which states that in the absence of a designation by the parties, an arbitration agreement is governed by the law applicable to the principal contract or, where that law invalidates the agreement, by the law of the state where arbitration takes place. However, the parties remain free to designate another applicable law and their will then prevails.

In the absence of an explicit choice, the arbitrators themselves must determine the seat.

In Quebec, the Code of Civil Procedure and the CCQ are silent about the choice of language. Arbitration agreements often specify the language in which the award will be made, as well as the language that will be used during the proceedings. The choice of language is left to the arbitration tribunal and will generally be the language used in the commercial contract at the source of the dispute between the parties.

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