Articles
Legal system fails to embrace ADR’s true purpose
By Ellen C. Desmond
Practitioners working in the field of alternative dispute resolution have spent many years now researching and commenting on effective negotiating styles, dispute resolution options and the administration of justice. But have we achieved real and substantive change?
Cost sanctions arising from an unreasonable refusal to participate in ADR
By Rebecca Morse
The courts of England and Wales have sent a clear message to the legal community and parties involved in disputes that an unreasonable failure to participate in ADR or refusal to negotiate their differences prior to trial may result in significant cost sanctions. Interestingly, this does not appear to be an issue that has yet been considered by the Canadian courts.
Settlement counsel: A new approach to the resolution of different disputes in commercial litigation
By Michael Schafler
At the CBA online PD program held on Jan. 26, 2010 titled “The Emerging Role of Settlement Counsel in Commercial Litigation,” the two principal topics discussed were the role of settlement counsel and facilitating settlement by the use of risk analysis in the context of ADR.
The role of ADR in developing new models to address legal needs
By Diana Lowe, Q.C.
In the past decade, research in Canada and internationally is able to paint a clearer picture of the public need for legal services than has previously been possible. This information is invaluable to everyone concerned with providing legal services: government, courts, the legal profession, legal aid organizations, public legal education providers and of course ADR practitioners.
Stay of arbitration: One strike and you’re out?
By P. David McCutcheon and Marina Sampson
Harlan F. Stone, the former Chief Justice of the U.S. Supreme Court, famously stated, “the law itself is on trial quite as much as the cause which is to be decided.” In a recent Alberta Court of Appeal decision, it can equally be said that the Alberta Arbitration Act itself was on trial along with questions surrounding whether to stay legal proceedings in the face of an arbitration agreement.
SCC: Enforcement of foreign arbitral awards in Canada subject to local limitation laws
By Michael Schafler
The Supreme Court of Canada has handed down an important decision clarifying what, if any, time limits may apply to the enforcement of a foreign arbitral award in Canada.
Notes from the Section
Message from the Chair
By Anne Gottlieb
The year has passed quickly, with many achievements and successes. It has truly been a pleasure leading this year’s CBA ADR Executive, and I am excited to say that it looks as though the position of Chair will remain mine for the 2010- 2011 term.
OBA ADR Award
By Anne Gottlieb
The CBA ADR Executive wishes to extend congratulations to the Honourable Mr. Justice Beaudoin, recipient of the 2010 OBA ADR Award of Excellence. The Award ceremony took place at a luncheon on June 1, 2010 at the OBA office in Toronto.
ADR Section responds to IIROC’s request for comments
By Rebecca Morse
In December 2009, the Investment Industry Regulatory Organization of Canada sought comments on its arbitration program (the “request for comments”) from the CBA’s National Alternative Dispute Resolution Section.
Legal system fails to embrace ADR’s true purpose
By Ellen C. Desmond
Practitioners working in the field of alternative dispute resolution have spent many years now researching and commenting on effective negotiating styles, dispute resolution options and the administration of justice. But have we achieved real and substantive change? Is there measurable improvement over the past 30 years? Have the original goals and objectives of the ADR movement been met?
To answer these questions, we must re-visit the objectives set during the historic Pound conference of 1976. Responding to public debate (both about the increased cost of litigation and the lack of control parties had around the legal process) legal scholars and jurists were brought together to discuss ways of addressing what was then a growing “dissatisfaction” with the American legal system.
During this conference, Harvard Law Professor Frank Sanders shared his innovative research and perspectives on conflict resolution. He encouraged participants to “envision alternatives” to the traditional judicial system which would include a “rich variety of different processes.” He advocated that the central quality of mediation was its ability to help parties achieve a new and shared perception of their relationship; a perception that would redirect their attitudes and dispositions toward one another”. In part, ADR was “at one” with the idea of community development. If individuals could learn to negotiate or problem solve in a constructive fashion, our communities could also prosper.
Those who had the opportunity to be part of the Pound conference and had exposure to this “new way of thinking,” did begin to see change. Many grassroot organizations began to see conflict from a new perspective. There was recognition that individuals could learn new skills that would enable them to handle conflict differently; ultimately improving relationships in our communities.
Concurrently, as ADR grew in popularity, so too did a second vision for these alternative processes. In addition to helping individuals develop their problem-solving skills, ADR became an effective way to conserve the resources of both courts and administrative bodies. We learned that a “settlement” or “resolution” could be reached more quickly and that efficiencies could be gained.
While ADR was first seen as a “radical transformative process,” it gradually became mainstream. In the past 10 years, we have seen the adoption of ADR by the judicial system. Some form of ADR is in place in virtually every jurisdiction. We have seen the introduction of settlement conferences, judicial resolution and sentencing circles. ADR has permeated both federal and provincial legislation. Our schools have adopted peer mediation. We have patient advocates and commercial ombudsmen. Moreover, many of these programs have been adopted in the context of making the judicial process more efficient. Indeed, ADR has become institutionalized and has become the subject of procedures and professional standards.
Now some 30 years after the Pound conference, can we say with confidence that we have “transformed individuals” and have brought a “rich variety of different processes” to our communities? Is it fair to conclude that we have cured the ills identified in 1976 by leading scholars and jurists? Unfortunately, the answer is no.
The recent report of the Access to Family Justice Task Force in New Brunswick highlights this very issue. As indicated therein, court social work positions were first created in the New Brunswick Family Court System in 1983 and the intent was to assist litigants resolve their conflicts without litigation. However, for some 25 years, the mediators in this program were provided with very little training and were tasked with administrative functions, thus reducing their available time to do real ADR work. Moreover, many considered the program to be inadequately funded. The goal of helping families solve their conflicts in a productive fashion could not be met and as the Honorable, Mr. Justice Guerette Q.B.F.D. noted, “the system is broken.”
Arguably, these comments and concerns can be extended to other programs in other jurisdictions and concern about the direction of mediation and ADR is not limited to North America. Other jurisdictions have also cautioned against the tendency to embrace and promote mediation as aid to reducing court congestion, while failing to embrace the true philosophical origin of these dispute mechanisms. While efficiencies may be gained, individuals are not learning the skills necessary to ultimately transform our communities.
We must commend the efficiencies gained in our court processes but that said we have a collective responsibility for the future of ADR. We must re-visit the original tenants of these processes. Saving money and time cannot be the only objective. If so, the true purpose and advantage of ADR will not be achieved.
Fundamentally, alternative methods of dispute resolution are about finding a satisfying and constructive community building approach to conflict resolution. Admittedly, these objectives might be more difficult to meet and harder to measure than a financial statement. Economic efficiencies may not be achieved. However, meeting these original goals will ultimately provide a springboard to a more just society.
— Ellen C. Desmond, LLB, MSW, LL.M. This article originally appeared in the April 2, 2010, issue of The Lawyers Weekly published by LexisNexis Canada Inc. Reproduced with permission.
Cost sanctions arising from an unreasonable refusal to participate in ADR
By Rebecca Morse
The courts of England and Wales have sent a clear message to the legal community and parties involved in disputes that an unreasonable failure to participate in ADR or refusal to negotiate their differences prior to trial may result in significant cost sanctions. Interestingly, this does not appear to be an issue that has yet been considered by the Canadian courts.
In Halsey v Milton Keynes General NHS Trust : Steel, Joy & Halliday [2004] ADR.L.R. (“Halsey”), the Court of Appeal considered whether there were any circumstances in which the courts of England and Wales should impose cost sanctions on successful litigants if they had refused to participate in ADR prior to trial. The Court of Appeal ultimately determined that litigants would face cost consequences if they unreasonably refused to participate in ADR although the Court acknowledged and emphasized that it was not suggesting that courts should ever consider the reasons as to why any attempts at ADR were unsuccessful. In considering whether a refusal to participate in ADR was unreasonable, the Court determined that the following factors should be considered:
- the nature of the dispute;
- the merits of the case;
- whether other settlement methods had been attempted;
- the costs of a proposed method of ADR as compared to the amount in dispute;
- any delay in requesting ADR; and
- whether the proposed method of ADR had a reasonable prospect of success.
The decision in Halsey is clearly designed to encourage parties to consider mediation and other forms of ADR in appropriate cases, and in a decision that was pronounced less than a year after Halsey, the Court of Appeal of England and Wales issued a warning to the legal profession and the parties involved in disputes who fail to consider mediation (see Burchell v. Bullard & Ors [2005] EWCA Civ. 358). At paragraph 43 of Burchell v. Bullard & Ors, the Court stated:
Halsey has made it plain not only that the high rate of a successful outcome being achieved by mediation but also of its established importance as a track to a just result running parallel with that of the court system. Both have a proper part to play in the administration of justice... The profession can no longer with impunity shrug aside reasonable requests to mediate.
The rule established in Halsey appears to have been extended beyond a refusal to participate in ADR to circumstances in which litigants have simply refused to negotiate. In Hickman v. Lapthorn [2006] EWHC 12 (Q.B.) the Court was asked to determine the cost allocation between two unsuccessful defendants, and whether one defendant should bear the other defendant’s portion of costs award as a result of the former’s refusal to mediate. This case considered a refusal to negotiate rather than participation in mediation or any other formal form of ADR, and the Court specifically determined that the test in Halsey applied in these circumstances. Notably, however, the court determined that a deviation from the ordinary costs rules was not justified in this instance.
Further, the rule in Halsey may also be extended to impose cost sanctions by way of increasing the scale of costs payable by an unsuccessful litigant in circumstances in which they had unreasonably refused to mediate. In LMS International Ltd. & Ors v. Styrene Packaging and Insulation Ltd. & Ors [2005] EWHC 2113 (T.C.C.), the court stated that “…in exceptional circumstances, a refusal to mediate might justify an order for indemnity costs, such as where the refusal was, on any view wholly unjustified, or where it was motivated by completely commercial considerations…” In the circumstances of this case, however, the Court determined that an increase in the scale of costs was not justified.
The decision in Halsey must be considered and understood in context and in light of the Court of Appeal’s view that the courts of England and Wales could not force unwilling litigants to participate in mediation, and to do so would impose an unacceptable obstruction to their right of access to the courts and a violation of Article 6 of the European Convention of Human Rights. The courts of England and Wales inability to force mediation may be a feature of Halsey that distinguishes it from many Canadian cases as there are some jurisdictions in Canada in which parties can be compelled to mediate. Although the constitutionality of legislation forcing parties to participate in mediation has been challenged in the legal literature (see J. Giles, Q.C., “The Compulsory Mediator,” (2004), The Advocate, 537), I am not aware of any case in which the courts have considered this issue.
The decision in Halsey is interesting as it illustrates the measures taken by the courts in England and Wales to encourage parties to at least try to settle their disputes prior to trial. Sceptics as to the effectiveness of mediation and ADR may be comforted to learn that there have been a number of cases which have applied and considered Halsey, and many have declined to impose cost sanctions on a successful party for refusing to participate in ADR based on the facts of the cases before them. Indeed, even in Halsey itself, the Court of Appeal refused to penalise a party for refusing to mediate on the basis that the subject matter of that dispute was unsuitable for ADR and the offers to mediate were purely tactical.
Although the rule established in Halsey maynever be applied directly to a disputes in jurisdictions in Canada with compulsory mediation legislation, it will be interesting to see whether the courts in Canada ever consider a similar rule to circumstances in which a successful party has failed to negotiate or to increase the scale of costs of an unsuccessful litigant who unreasonably refuses to participate in settlement negotiations.
Rebecca Morse is an associate at Farris Vaughan, Wills & Murphy LLP. She practises out of the firm’s Vancouver office, focusing on corporate and commercial litigation matters.
Settlement counsel: A new approach to the resolution of different disputes in commercial litigation
By Michael Schafler
On Jan. 26, 2010, Michael Schafler and Gordon Tarnowsky, both partners in the dispute resolution group of Fraser Milner Casgrain LLP, presented a 90-minute webinar titled “The Emerging Role of Settlement Counsel in Commercial Litigation.” The webinar was part of a CBA Professional Development program. Approximately 100 registrants from across Canada participated in the webinar, which included live polling. The two principal topics discussed in the webinar included the role of settlement counsel and facilitating settlement by the use of risk analysis in the context of ADR.
The role of settlement counsel is a growing phenomenon in Canada that emanated from the United States. As the polling showed, many people in the ADR field are aware of the concept. The role of settlement counsel is to assess, develop and implement a settlement strategy for the case. The objective of settlement counsel is to engage in a problem solving approach focused on the interests of the parties, typically through negotiation or mediation. Two different approaches can be applied to the relationship between settlement and litigation counsel (which can include lawyers from the same firm (subject to ethical screens) or lawyers from different law firms). The first approach entails litigation and settlement counsel working side by side, but a more common approach is when there is an open one way flow of information from litigation counsel to settlement counsel. Settlement counsel uses and relies upon litigation counsel’s opinions and risk analysis to assist in understanding and weighing the “litigation option” in pursuing and assessing potential alternative resolutions.
Read the full article here. 
The role of ADR in developing new models to address legal needs
By Diana Lowe, Q.C.
In the past decade, research in Canada and internationally is able to paint a clearer picture of the public need for legal services than has previously been possible. This information is invaluable to everyone concerned with providing legal services: government, courts, the legal profession, legal aid organizations, public legal education providers and of course ADR practitioners.
National statistics on the prevalence of legal problems have been gathered for a number of years, and repeatedly find that at any given time, approximately 11.6 million (47%) of Canadians have a legal problem with potentially negative consequences for their everyday lives.1 These surveys reveal that a significant portion of the population experiences a need for legal services.
While the need for legal services is vast, research in the UK and Canada also reveals that only a small proportion (approximately 10%) of problems are addressed by the courts or with formal representation, leaving a significant portion of legal need unaddressed.2 These same studies indicate that unresolved disputes cluster and lead to additional health, economic and social problems that have significant costs for individuals, their families, businesses and society as a whole. More knowledge is needed about these disputes, including whether there are services and resources available to meet public need, how the public gains access to these services, what they cost, and perhaps most importantly, the price of failing to provide access.3
It is important to address legal needs before serious problems arise requiring the courts to become involved or leading to other social, economic and health costs.
Why is this relevant to you as an ADR practitioner? Arguably the resolution of legal disputes is central to the well-being of all Canadians and certainly relevant to the justice community. As a legal professional engaged in developing and applying appropriate models for resolving disputes, you are particularly well-placed to lead the growing effort to develop innovative new models for addressing legal need. We welcome your thoughts and invite you to share suggestions on how ADR can assist in responding to unmet legal needs.4
Diana Lowe, Q.C. is the Executive Director of the Canadian Forum on Civil Justice
1 Currie A. (2007) The legal problems of everyday life: The nature, extent, and consequences of justiciable problems experienced by Canadians. Ottawa: Justice Canada. http://www.justice.gc.ca/eng/pi/rs/rep-rap/2007/rr07_la1-rr07_aj1/rr07_la1.pdf.
2 Genn, H. (1999) Paths to Justice: What people think about going to law. Oxford: Hart Publishing. This survey has now been continued as a biannual English and Welsh Civil and Social Justice Survey. In Canada, Ab Currie, Principal Researcher, Legal Aid and Access to Justice in the Federal Department of Justice, has conducted extensive parallel surveys (see footnote 1 above). Pleasence, P., Balmer, N.J., Buck A. et al are now looking at civil justice problems as interrelated aspects of broader social, economic and health problems. “Mounting problems: Further evidence of the social, economic and health consequences of civil justice problems”, in Transforming Lives: Law and Social Process (2007) (pp.67-92). United Kingdom: Legal Services Commission. And Pleasence, P., Balmer, N., Buck, A. (2008) “The health cost of civil-law problems: Further evidence of links between civil-law problems and morbidity, and the consequential use of health services”, Journal of Empirical Legal Studies, 5, 351-373. See also Stratton & Anderson (2006). Social, economic & health problems associated with a lack of access to the courts. http://cfcj-fcjc.org/docs/2008/cjsp-socialproblems-en.pdf
3 The Forum is seeking funding for a major national study on the “Cost of Justice” to help address these fundamental questions: http://cfcj-fcjc.org/research/costs-en.php.
4 See Issue 12 of News & Views on Civil Justice Reform for a discussion of emerging models of legal services: http://cfcj-fcjc.org/publications/newsviews-en.php#issue12 , and share your thoughts with us on how ADR can contribute. The author can be reached at: dlowe@law.ualberta.ca
Stay of arbitration: One strike and you’re out?
By P. David McCutcheon and Marina Sampson
Harlan F. Stone, the former Chief Justice of the United States Supreme Court, famously stated, “the law itself is on trial quite as much as the cause which is to be decided.”
In a recent Alberta Court of Appeal decision, it can equally be said that the Alberta Arbitration Act (the “Alberta Act”) itself was on trial along with questions surrounding whether to stay legal proceedings in the face of an arbitration agreement. Given the common genesis and language of both the Alberta and Ontario Arbitration Acts, the decision may have implications that extend beyond Alberta.
Lamb v. AlanRidge Homes Ltd. 1
The Lambs and AlanRidge entered into a construction agreement wherein AlanRidge was to build a house. The parties’ agreement contained a mandatory binding arbitration agreement.
As a result of alleged defects in the house, the Lambs commenced an arbitration but failed to progress the arbitration. Approximately 18 months after they commenced the arbitration, the Lambs issued a Statement of Claim, commencing an Alberta court action against AlanRidge and certain subcontractors. AlanRidge brought an application to stay the action under section 7 of the Alberta Act.
The Alberta Court of Queen’s Bench Decision
Justice Macleod concluded that while all of the claims made against AlanRidge in the Lambs’ action fell under the arbitration agreement, the action nonetheless included non-arbitrable claims against third party subcontractors and other defendants. The arbitration agreement did not therefore encompass all of the claims in the court action.
Justice Macleod declined to grant a partial stay under section 7(5) of the Alberta Act, finding that the arbitrable and non arbitrable claims were “inextricably linked to one another” and could not be separated. Justice MacLeod determined that the application should be dismissed and that the arbitration, as opposed to the court action, should be stayed to avoid a multiplicity of proceedings (however, it should be noted that the chambers judge did vary his decision, orally, and stayed the arbitration only in part).
The Outcome at the Court of Appeal
Very briefly, the appeal failed because, pursuant to the Alberta Act, Justice Macleod’s decision was unappealable. Once the Court determined that Justice Macleod’s decision was made under section 7 of the Alberta Act, its decision that an appeal was precluded was swift and unequivocal.
While on the one hand the Court indicated that it would not make a determination on the lower court decision’s correctness, it nevertheless pointed out that in giving priority to litigation in order to avoid a multiplicity of proceedings, the decision went against the Alberta Court of Appeal’s reasoning in Kaverit Steel and Crane Ltd. v. Kone Corp, 87 D.L.R. (4th) 129(which was decided under the International Commercial Arbitration Act (S.A. 1986, c.I-6.6 [now R.S.A. 2000, c. I-5] and not the Alberta Act). The Court further recognized that two recent decisions of the British Columbia Court of Appeal — Seidel v. Telus Communications Inc. and MacKinnon v. Money Mart — were seemingly at odds with the lower court’s decision.
The Court concluded that the appeal demonstrated a lack of clarity in the Alberta Act; more particularly, given the inability to appeal decisions under section 7, the Court found that legislative review and amendment may be appropriate.
Comment
The complicated interplay between holding parties to their arbitration agreement and avoiding multiple proceedings is not a new dilemma. The dilemma is made thornier still where the decision is exempt from appellate review and the statute is vague. The policy behind section 7(6) (no appeal) is sound. If parties are mired in appeals, expedience and efficiency, arguably the hallmarks of arbitration, will surely be lost. Still, a sound policy does not make living with an incorrect decision, perceived or otherwise, any easier.
This is not quite the end of the road for similar cases where a stay of an arbitration is sought. While an application for leave to appeal to the Supreme Court of Canada in the instant case has just been dismissed with costs, the British Columbia Court of Appeal case cited by the Alberta Court of Appeal, Seidel v. Telus, is pending before the Supreme Court of Canada. Perhaps provincial legislatures will take some direction from decisions of the Supreme Court of Canada.
In the meantime, what about Ontario? Ontario courts have previously interpreted section 7(5) of the Ontario Act in similar circumstances. Radewych v. Brookfield Homes (Ontario) Ltd., a decision of the Ontario Court of Appeal, cited with approval by the Alberta Court of Appeal in support of its interpretation of section 7(6), is an example. In Radewych, the Ontario Court of Appeal did not call for amendment to an unclear statute, but cited the lower court’s decision supportively:
That subsection (section 7(5)) reposes a discretion in the court to stay a proceeding with respect to matters dealt with in an arbitration agreement where some matters arise under the agreement and some do not.. . .
It is preferable, in my view, that all of the various claims, against all of the defendants, be determined in one proceeding.
Where the Alberta Court of Appeal saw a lack of clarity in the statute, the Ontario Court of Appeal saw a judge’s ability to exercise discretion. It should be noted that the two decisions are consistent in their result; however, the direction from the Alberta Court of Appeal is that clearer rules should exist for the exercise of a judge’s discretion.
The decisions demonstrate somewhat divergent approaches to the same problem; perhaps neither is wrong, but only time, and further appeals, will tell. In the meantime, under the Ontario and Alberta Acts, drawing the line on a stay of court proceedings in favour of domestic arbitration agreements where there are additional parties remains uncertain and unpredictable.
David McCutcheon is a partner at Fraser Milner Casgrain LLP in the firm’s Toronto office. He is past president of the ADR Institute of Canada and the ADR Institute of Ontario and a founding member of the Toronto Arbitration Roundtable. Marina Sampson is an associate at Fraser Milner Casgrain LLP in Toronto, practising in the litigation and alternative dispute resolution practice group and the renewable energy group.
This article first appeared in the Ontario Bar Association ADR Section newsletter, Vol. 18, No. 2, March 2010. Reproduced with permission.
1 Lamb v. AlanRidge Homes Ltd.(2009) ABCA 343; application for leave to appeal to the Supreme Court of Canada, pending.
SCC: Enforcement of foreign arbitral awards in Canada subject to local limitation laws
By Michael Schafler
The Supreme Court of Canada has handed down an important decision clarifying what, if any, time limits may apply to the enforcement of a foreign arbitral award in Canada. The Court has held that, for these purposes, the imposition of a time limit is a procedural rule permitted by Article III of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Consequently, the question whether the enforcement of an arbitration award is subject to any time limit depends on the wording of any limitations legislation in the Province where the award is sought to be enforced.
Yugraneft Corporation, a Russian company in the business of developing and operating oilfields in Russia, purchased materials from Rexx Management Corporation, an Alberta company. Following a contractual dispute and an international commercial arbitration before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation on Sept. 6, 2002 the tribunal awarded just under US$1million to Yugraneft. On Jan. 27, 2006 Yugraneft applied to Alberta’s Court of Queen’s Bench for recognition and enforcement of the award. The application was dismissed and an appeal to Alberta’s Court of Appeal was unsuccessful. Leave to appeal to the Supreme Court was granted which, following oral argument in December 2009, issued its ruling dismissing the appeal on May 20, 2010.
The principal issue was whether the enforcement proceeding was subject to any limitation period and, if so, whether it should be the two year period applicable to a “remedial order” (s. 3 of Alberta’s Limitations Act, R.S.A. 2000, c. L-12) or the ten year period applicable to a “judgment or order for the payment of money” (s. 11). Yugraneft argued that s. 11 should apply since a foreign arbitral award possesses all the hallmarks of a judgment and because there was ambiguity as to whether s. 3 was intended to apply. Rexx argued that s. 3 should apply since the Alberta legislature intended the two year limitation period to apply to all causes of action, unless one of the exceptions enumerated in the Act expressly applied.
On the threshold issue as to whether the imposition of a local limitation period for the enforcement of a foreign award was contrary to the New York Convention, the Court held that this was a procedural – and therefore permissible – rule:
- As a Treaty, the New York Convention should be interpreted in good faith in light of its object and purpose. When it was drafted, it was well known that common law states generally treated limitation periods as procedural in nature. The permissive language in Article III (as opposed to an express prohibition) suggests that the drafters intended to permit limitation periods to be established by and in Contracting States;
- 53 Contracting States in fact have subjected the enforcement of foreign arbitral awards to some form of time limit; and
- The application of time limits “is not a controversial matter” given that leading scholars take it for granted that Article III permits local limitation periods.
In concluding that s. 3 of the Limitations Act applied to a foreign award, the Court held that an arbitral award is not a judgment or a court order and that in “general, arbitration is not part of the state’s judicial system, although the state sometimes assigns powers or functions directly to arbitrators”. The Court further pointed out that other statutes, like Alberta’s Reciprocal Enforcement of Judgments Act, R.S.A. 2000, c. R-6 (“RESA”)1 and British Columbia’s Limitation Act, R.S.B.C. 1996, c. 266, expressly referred to judgments and awards when prescribing limitation periods, whereas the Limitations Act did not. The Court further held that the two year limitation period in s. 3 of the Limitations Act was subject to the discoverability rule which “makes ample allowance for the practical difficulties faced by foreign arbitral creditors, who may require some time to discover that the arbitral debtor has assets in Alberta”.
The Court then established the following rules as to determining when a limitation period such as the one set out in s. 3 of the Limitations Act, begins to run in respect of enforcing a foreign award:
- The limitation period will not be triggered until the possibility that the award might be set aside by the local courts in the country where the award was rendered has been foreclosed;
- Even then, the time limit will not be engaged until the creditor knew or ought to have known that the bringing of an enforcement proceeding was warranted;
- An enforcement proceeding will be warranted only once the creditor has learned, exercising reasonable diligence, that the debtor possesses assets in the relevant jurisdiction; and
- When the underlying contract identifies the jurisdiction in which the debtor is registered (or has an office), it is presumed that the creditor knows or ought to know that a proceeding is warranted.
Comment
The Supreme Court has – at least for the time being – resisted the opportunity to pronounce that arbitral awards are at least functionally equivalent to judgments. This is perhaps somewhat surprising given that the Court has in the past decade consistently held that arbitral proceedings are “autonomous” and are to be afforded judicial deference (see, e.g., Desputeaux v. Éditions Chouette (1987) inc., 2003 SCC 17; Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34; and Rogers Wireless Inc. v. Muroff, 2007 SCC 35). On the other hand, the Court has clarified what until now had been an arguably ambiguous issue and promulgated clear rules. Certainty has thus been established, and for users of commercial arbitration this is a good thing.
Michael Schafler is a partner in the Toronto office of Fraser Milner Casgrain LLP where he practices complex commercial dispute resolution (see http://www.fmc-law.com/People/SchaflerMichael.aspx).
1 The RESA has a six year limitation period for the enforcement of judgments and arbitral awards rendered in reciprocating jurisdictions, which Russia is not; hence, Yugraneft’s application was brought under the Model Law, as enacted in Alberta pursuant to the ICAA.
Message from the Chair
By Anne Gottlieb
As this CBA calendar begins to draw to a close, I think how fortunate I am to work with such dedicated and inspiring individuals across the country!! It has truly been a pleasure leading this year’s CBA ADR Executive, and I am excited to say that it looks as though the position of Chair will remain mine for the 2010- 2011 term.
The skill of running a nation-wide conference call, on a monthly basis, could be, in and of itself, a newsletter article. Unless you are on Skype, or video conferencing, it is difficult to solicit the input of 16-24 people, on the phone, while keeping the agenda moving and trying to gauge or anticipate the reactions of those on the phone, who are not speaking. It is different from reading the faces of those attending a meeting, and also more impersonal than speaking to a large audience. But hopefully, as time goes on, a rhythm develops, and you begin to identify voices, and people divest themselves of initial hesitations and one no longer needs to remind people to identify themselves, when they are speaking.
My position was made easier by the dynamism of a very engaged and knowledgeable group of ADR professionals who were ready to jump in, and participate, at all organizational levels, sharing both their time and expertise. The discussions that we have had, regarding self represented litigants in mediations, requirements across the country for CPD, and the like, have been a true resource – for all of us who are trying to forge inroads and improve mediation systems in both the private and court-connected sphere. Hopefully the discussions at the national level have been reported and shared with the respective ADR provincial and branch executives.
The year has passed quickly, with many achievements and successes. My congratulations to Michael Schafler for chairing a widely attended online CPD in January. He, together with Gordon Tarnowsky, presented an interactive program on the Role of Settlement Counsel in Complex Commercial Litigations and a Risk Analysis Tool to Quantify a Settlement Range. The program was informative, interesting and very well received.
I wish to thank our dedicated Newsletter editors, Moira Goodfellow and Rebecca Morse for producing such quality articles for Possibilities and for gently reminding those of us who submit articles, to do so in a timely fashion.
Thank you to those who provided input, revisions, and commentary to the Request for Comment on the Arbitration Program of the Investment Industry Regulatory Organization of Canada (IIROC). Our submission is contained in this newsletter, and is posted on the CBA ADR website.
Many thanks to Ellen Desmond – for her work as Secretary-Treasurer, and for her tremendous support throughout the year.
Thank you to Gaylene Schellenberg and Aviva Rotenberg at CBA, and of course, my many, many thanks to our CBA Staff Liaison, Candice Seguin, for keeping us on track, throughout the year. The work we do as volunteers would not transpire without your efforts and assistance.
I look forward to seeing everyone in Niagara Falls in August!
Sincerely,
Anne I Gottlieb
Hons B.A., LL.B., LL.M.
Chair CBA ADR Section
OBA ADR Award
By Anne Gottlieb
The CBA ADR Executive wishes to extend congratulations to the Honourable Mr. Justice Beaudoin, recipient of the 2010 OBA ADR Award of Excellence. The Award ceremony took place at a luncheon on June 1, 2010 at the OBA office in Toronto.
In January of 1997, Master Beaudoin, as he was then, was appointed the Case Management Master for the Superior Court of Justice in Ottawa. After his appointment, he was involved in lecturing and providing advice on the topics of case management and court annexed mediation to interested groups in Canada and abroad.
He was involved throughout the process of civil justice review in the Province of Ontario, including the establishment of case management and mandatory mediation. He has taken a lead role in establishing case management and providing training in ADR/mediation with international development projects sponsored by the World Bank, the American Development Bank, CIDA, and CBA International, in places including; Sri Lanka, Uganda, Ethiopia, Morocco, Trinidad, Tobago, Guyana and Zimbabwe.
In 2007, Master Beaudoin was named one of two family case managers involved in a pilot project in the family branch of the Superior Court of Justice in Ottawa.
Mr. Justice Beaudoin was appointed a judge of the Superior Court of Justice in September, 2009.
Past recipients of the OBA ADR Award include (in alphabetical order): Genevieve A. Chornenki, D. Paul Emond, Anne E. Grant, Paul Iacono, Kathleen Kelly, Dr. Barbara Landau, June Maresca, Leslie Macleod, Master Donald E. Short, Allan J. Stitt, Rick Weiler and Chief Justice Warren K. Winkler.
ADR Section responds to IIROC’s request for comments
By Rebecca Morse
In December 2009, the Investment Industry Regulatory Organization of Canada sought comments on its arbitration program (the “request for comments”) from the CBA’s National Alternative Dispute Resolution Section. The request for comments described the following three avenues for resolving disputes with an IIROC Dealer Member: (a) an arbitration program administered by two independent arbitration firms; (b) non-binding redress of investment industry complaints by the Ombudsman for Banking Services; and (c) civil litigation through the civil courts.
The ADR Section supported the variety of recourses available to address disputes, and it also provided comments specific to IIROC’s arbitration program. Specifically, the Section supported the proposed increase of the award limit for the arbitration program from $100,000 to $350,000 and suggested that a higher limit may also be acceptable, providing cases can be resolved in a timely fashion. The Section also suggested that the participants in the arbitration program be given the option to have their case heard by a panel of three arbitrators, with each party choosing an arbitrator and those arbitrators then choose a their own chairperson. It was recognized by the Section that this option may increase the costs of the arbitration, it may encourage parties to participate in the arbitration program by eliminating any apprehension of bias.
The Section also commented on the administration of IIROC’s arbitration program, which is currently consolidated with two firms. The Section suggested that IIROC tender bids at appropriate intervals (i.e., 3-5 years) to Quebec- and national arbitration firms so as to reinforce the concepts of neutrality and openness. Finally, the Section suggested that the timelines for resolving a case under the arbitration program be tightened as the short timeframes generally available in arbitration is one of its key advantages.
To see the submission, click on the March 2010 IIROC Arbitration Program.
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