Group calls for uniform international arbitration rules

Lawyers are hoping for more consistent rules for international arbitration across Canada as plans are in the works to smooth out differences between the provinces and territories.

A working group is looking into creating consistent laws throughout the country on issues from the power of arbitral tribunals to make ex parte orders to whether it’s appropriate to have the same limitation periods everywhere in Canada.

It’s a step toward making Canada an “arbitration-friendly” country, says Gerald Ghikas, a commercial arbitration lawyer at Vancouver Arbitration Chambers who’s also chairman of a working group that’s proposing changes aimed at creating a clearer arbitration system.

Canada has had relatively uniform arbitration laws since 1985 when it adopted the model law on international commercial arbitration like many other countries. But since that time, “some variations have crept in,” says Ghikas, who adds the plan now is “to restore, as far as we are able, complete uniformity” across the country.

The working group will make several recommendations on which provisions of the model law the provinces and territories should adopt. So far, the inclination is to recommend adopting the model in its entirety except in unique circumstances that require divergence. The group will present the recommendations at the Uniform Law Conference of Canada annual general meeting in August.

Getting the Uniform Law Conference of Canada’s backing adds weight to the cause, says Ghikas, who admits the next step, which is getting politicians to move on the recommendations, will likely be a longer process.

Canadian politicians have every reason to want clearer and more uniform legislation in arbitration law, says John Judge, a resident arbitrator at Arbitration Place in Toronto.

“Canadian politicians, I think, are now ever attuned to the importance of global trade,” he says. “Canadian governments, federal and provincial, are looking to expand foreign export markets for Canadian businesses. And the fundamental underpinning for international trade is a strong regime for international arbitration as the preferred dispute resolution process.”

Although the working group will make recommendations as a team, there have been disagreements about the new shape international arbitration should take in Canada. When it comes to ex parte orders, for example, members of the group disagreed on whether giving such powers to arbitral tribunals would defeat the purpose of arbitration itself as a consent-based process.

“The question is whether arbitrators, rather than just a court, should have the express authority to make ex parte orders,” says Ghikas. “There are two sides to the debate. One side is that arbitration is essentially a consensual process where everything happens by agreement of the parties, in the presence of both parties, and that nothing should happen ex parte. And if a party wants to get an ex parte release, they should be applying to an appropriate court rather than an arbitral tribunal.

“The other view is that in some places in the world, arbitrators already think they have that authority inherently and secondly that it’s very important that arbitrators be in a position to act quickly to preserve the subject matter of the dispute and this is an important power for them to have.”

More people have so far favoured the view that arbitrators should have the power to make ex parte orders. “The thinking is preliminary orders of that kind are short-lived, they are not enforceable the same way that final awards of a court are,” says Ghikas.

Currently, the legislation in Canada is silent on this question, he notes.

For Judge, there’s little reason to oppose ex parte orders by arbitral tribunals.

“That objection is misplaced,” says Judge.

“Parties, when they are consenting to arbitration under the international arbitration act, are knowingly consenting to the existence of that ex parte regime, so the consent is there. More importantly, if they don’t want the ex parte regime, they can opt out of it. They can do so in their contract in the creation of the arbitration clause.”

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