Ontario Superior Court refuses to relitigate issues related to the constitution of arbitral tribunal

It would be an abuse of process to relitigate such issues: court

Ontario Superior Court refuses to relitigate issues related to the constitution of arbitral tribunal

The Ontario Superior Court of Justice has upheld an arbitral award, finding that permitting the re-litigation of issues related to the constitution of the arbitral tribunal would be an abuse of process.

In La Française IC 2 v. Wires, 2024 ONCA 171, the appellant had entered into a bespoke funding agreement with Profile Investment on behalf of IC2 Fund, SICAV-FIS, a regulated company existing under the Laws of Luxembourg. The appellant commenced an arbitration in London, England, seeking to obtain payment under the funding agreement.

In the course of the arbitration, the arbitrator awarded the respondent security for costs against the appellant. The appellant failed to pay and subsequently challenged the arbitrator’s appointment, alleging bias. This challenge was dismissed by the Stockholm Chamber of Commerce (SCC) as time-barred and meritless. The appellant's subsequent attempt to discontinue the arbitration led to the arbitrator granting the respondent's request for dismissal and costs.

On appeal, the appellant argued that the judgment enforcing the arbitral award should be set aside due to errors by the application judge, including failure to address the argument that the arbitral tribunal was improperly constituted and errors regarding the respondent's standing and the naming in the award.

The Ontario Court of Appeal found no basis for intervention, agreeing with the application judge that it would be an abuse of process to allow the appellant to relitigate the issues concerning the arbitral tribunal’s constitution. The court highlighted the broad and adaptable nature of the doctrine of abuse of process, aiming to protect the fairness and integrity of the judicial system.

The court also supported the application judge's findings on the respondent's standing and the insignificance of the misnaming issue in the award. The court noted that the distinction between the settled costs of the respondent’s counterclaim and the arbitration costs was appropriately addressed, negating the appellant's concerns over double-counting or overcompensation.

The court concluded that the appellant’s challenge stemmed more from dissatisfaction with procedural outcomes than substantial concerns over impartiality. Accordingly, the court dismissed the appeal. The respondent was awarded costs for the appeal.

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