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Canadians tops in international arbitration

|Written By By Julius Melnitzer

A topic that has cut a wide swath through Canadian society will finally Canada's reputation as neutral, independent, fair, and believable in international affairs originated when former prime minister Lester B. Pearson won the Nobel peace prize in 1957 for inventing the notion of peacekeepers. Since then, Canadian soldiers wearing the blue beret of the United Nations have done much to promote it.

Yves Fortier  was named by American Lawyer's Focus Europe as the top arbitrator in the world.
Yves Fortier was named by American Lawyer's Focus Europe as the top arbitrator in the world.

Though lawyers were probably far from the thoughts of Pearson or the peacekeepers, an elite group of Canadians have capitalized on the image to punch way above the country's weight — economic or otherwise — as international arbitrators. Among the luminaries with whom they rank are Griffin Bell of Atlanta, former U.S. attorney-general; Stephen Schwebel of Washington, former president of the International Court of Justice (ICJ); and Francisco Rezek, the Brazilian judge on the ICJ.
"Canadians are seen as ideal neutrals," says Yves Fortier of Ogilvy Renault's Montreal office, who served as Canada's ambassador to the UN from 1988 to 1992 and was recently named by American Lawyer's Focus Europe as the top arbitrator in the world. In fourth place was former Liberal and Trudeau intimate Marc Lalonde, now
at Stikeman Elliott LLP's Montreal office.
Canadians have acted as "neutrals" in 11 of American Lawyer's list of the 40 largest arbitrations with a European connection since 2001. Apart, perhaps, from a nod in the direction of energy and mining law, there's not another practice area in which Canadian lawyers are so dominant globally.
To be sure, crediting Pearson and those blue berets for all this fine legal work may seem a bit of a stretch. But while Canada's peacekeeping has been a catalyst, there is another bit of history at work: in 1986, Canada became the first country to adopt modern arbitration legislation based on the United Nations Commission on International Trade Law model law.
Simultaneously, Canada acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. There are now 133 countries that subscribe to the "New York Convention." Canada's leadership enhanced the image of Canadians as steadfast proponents of international law.
Some might argue that all this is fine for arbitrators, but counsel aren't neutrals. The point the naysayers miss, however, is that investors seeking a remedy in a country that may be only a recent convert to the rule of law value counsel from a nation with a historical regard for the rule of law. They also tend to look for counsel whose mere nationality does not create an issue of its own.
Equally significant is that Canada is home to both
 common-law and civil-law regimes.
"Rightly or wrongly, Can-adians in general are seen as being versed in both main legal traditions," says Fortier.
Being able to speak both English and French doesn't hurt either.
Finally, the Ontario Court of Appeal's decision last year in United Mexican States v. Karpa has revived Canada's march back to respectability as a venue for trade dispute resolution.
The January 2005 ruling, which builds on the Federal Court's judgment one year earlier in Myers v. Canada, is the first appellate decision in Canada that confirms the reluctance of Canadian courts to interfere with awards of NAFTA arbitration panels.
"In the last few years, several important international arbitrations have been moved outside Canada because the tribunals were concerned that Canadian courts would not defer to their awards," says Barry Appleton of Appleton & Associates' Toronto office.
That fear led a NAFTA panel to shock the international arbitration community by choosing Washington as the venue for hearing the $200-million investor-protection claim by United Parcel Service against Canada.
But the decisions of the Federal Court in Myers and the Ontario Court of Appeal in Karpa have erased those fears.
In Karpa, justices Robert Armstrong, David Doherty and Susan Lang concluded that courts owed NAFTA
panels a high degree of deference and should interfere sparingly with the decision of international commercial arbitration tribunals.
"This is the clearest Canadian decision regarding the deference our courts will show to international commercial tribunals, both on findings of fact and on the remedial choices made by these tribunals," says Barbara McIsaac of McCarthy Tétrault LLP's Ottawa office, who
represented Feldman Karpa.
The upshot is this: American, British, and Australian companies like our lawyers and our courts because they come from a similar system. Europeans like us because we speak the language and have a legal tradition that incorporates civil law. Everybody likes us because we have a history of neutrality and we're North Americans who are not identified with the United States.

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