Arbitration

Question 1

What is arbitration & it’s regulation in Canada? (3)

Answer 1

• Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
• In Canada, arbitration is regulated by statute, every province and territory has its own separate arbitration legislation
• At the federal level, commercial arbitration is governed by the Commercial Arbitration Act

Question 2

Voluntary aspect of arbitration (2)

Answer 2

• Parties must agree in writing or fall within the ambit of legislation that mandates arbitration in a given situation
• The court will require the parties to submit the dispute to arbitration, unless it is found that the arbitration agreement is null and void, inoperative or incapable of being performed

Question 3

Controlled aspect of arbitration

Answer 3

• The parties and their counsel are able to control procedural steps of the process, including the choice of neutral, timing, location, and people present.

Question 4

Private aspect of arbitration

Answer 4

Arbitration conducted in private

Question 5

Informal aspects of arbitration (2)

Answer 5

• Subject to the CAA, there are no prescribed procedural or evidentiary rules governing an arbitration
• The rules are established by the adoption of existing rules, by a negotiated arbitration agreement between the parties, or by the parties and the arbitrator

Question 6

Adjudicative aspect of arbitration (2)

Answer 6

• (Litigation) The arbitrator issues a decision after the case was presented
• S 31 of the Code requires that an arbitral award shall be in writing, and that reasons be provided unless the parties have agreed that no reasons are required

Question 7

Binding/Non-binding aspects of arbitration (2)

Answer 7

• All federal (under the Commercial Arbitration Act) is binding
• Judicial review of an arbitral award is available only on limited grounds such as incapacity of a party, invalidity of an arbitration agreement, or that the award is in violation of law or public policy

Question 8

Confidential aspect of arbitration (2)

Answer 8

• Arbitration is generally confidential
• Federal level - Privacy Act and Access to Information Act must be complied with

Question 9

Adversarial aspect of arbitration

Answer 9

• While the arbitration process is based on the adversarial style of litigation model, the nature of the hearing is determined by the parties, their counsel and the arbitrator

Question 10

Flexible aspect of arbitration

Answer 10

The parties have discretion in choosing an arbitrator and the procedure to be followed in resolving the dispute

Question 11

Why use arbitration? (4)

Answer 11

1. Speed - fast process for dispute resolution
2. Choice of the neutral - parties can choose who will decide their issues
3. Technical issues - many federal government issues are technical in nature; arbitration gives the parties an opportunity to secure the services of an individual experiences in a technical area
4. Confidentiality - Article 27 of the code in conjunction with s. 36-39 Canada Evidence Act may provide protection against disclosure. Confidentiality by the Access to Information Act and Privacy Act*

Question 12

Advantages of arbitration

Answer 12

1. Parties can select arbitrators
2. Private & confidential
3. Can be formal or informal (parties and counsel determine)
4. The cost is easily contained
5. Greater settlement opportunity
6. Arbitral awards are binding under the Commercial Arbitration Act

Question 13

Disadvantages of arbitration

Answer 13

1. Success depends on the experience of the arbitrator
2. Arbitral awards are not of legal precedential value
3. Recourse against an award is very limited
4. May not suit disputes involving matters of public law, such as constitutional issues
5. Time and cost can be significantly affected by a lack of co-operation

Question 14

Role of Counsel in Arbitration (3)

Answer 14

1. Can represent his/her client during arbitration proceedings
2. Provide advice in respect to legal issues, including drafting or reviewing of the settlement agreement
3. Through careful design of the process, counsel and client can ensure that the necessary procedural safeguards are included in an arbitration, which will serve interests of all parties

Question 15

When does arbitration occur? (3)

Answer 15

1. Where an arbitration agreement exists in a contract out of which a particular dispute arises
2. Where disputing parties agree to arbitrate a dispute even though no prior arbitration agreement exists
3. Where a statute imposes an obligation to arbitrate