PDF version: Is this the end of an “endless repetition of failed litigation” – at least in Alberta? 

Case considered: Karaha Bodas Company, L.L.C. v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2011 ABCA 291

The Court of Appeal waxes eloquent in this short judgment that considers the latest episode in what the Court characterized (at para 8 ) as an “endless repetition of failed litigation.” The Court of Appeal - composed of Mr. Justice Jean Côté, Madam Justice Elizabeth McFadyen and Mr. Justice Clifton O’Brien - heard an appeal from an April 1, 2010 order by Mr. Justice T.D. Clackson (Karaha Bodas Company, L.L.C. v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2010 ABQB 172), an order that I commented on in “Arbitration for the Quick and Final Resolution of Disputes? Hardly.” The subject matter of that order is a procedural morass, the details of which are rather mind-numbing. What is interesting about the latest decision is the Court of Appeal’s characterization of Pertamina’s continuing world-wide litigation as “vexatious”. Will that characterization finally bring a halt to these proceedings, at least in this province?
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PDF version: Leave to Appeal an Arbitration Award: Is There a Public Interest Requirement? 

Case considered: Milner Power Inc. v. Coal Valley Resources Inc., 2011 ABQB 118

This brief judgment raises an interesting question. Is it possible to interpret section 44(2) of Alberta’s Arbitration Act, R.S.A. 2000, c. A-43 to require that leave to appeal be in the public interest, as so many Alberta decisions have done? At the end of his judgment, Mr. Justice M.A. (Mel) Binder suggested to counsel that they raise this question with the appropriate government department or legislative counsel. This is not a new issue but it has been surprisingly seldom raised during the twenty years that the provision has been in effect considering that the test for leave to appeal in section 44(2) speaks only of the “the importance to the parties” and “the rights of the parties.”

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PDF version: When is Delay “Undue” under Section 7(2)(d) of the Arbitration Act 

Case considered: Eiffel Developments Ltd. v. Paskuski, 2010 ABQB 619

In June of 2007, Eiffel Developments Ltd. sued Geoffrey and Lisa Paskuski for $46,667, alleging non-payment under a contract for the construction of the Paskuskis’ home. Three years later, Eiffel asked Jodi L. Mason, Master in Chambers, to deem service of Eiffel’s Statement of Claim on the Paskuskis to be good and sufficient. The Paskuskis made three arguments opposing this simple application: (1) that there was no evidence of service of the Statement of Claim and an absence of service cannot be cured; (2) that even if an absence of service could be cured, there was no evidence to support the relief sought by Eiffel, and (3) that Eiffels’ claim should be stayed on the basis of an arbitration clause in the home construction agreement. The Paskuskis lost all three arguments. This comment will focus on the third argument seeking enforcement of an arbitration agreement.

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PDF version: Appealing the Remedy Granted by an Arbitration Award

Case considered: Fuhr Estate v. Husky Oil Marketing Company, 2010 ABQB 495

This decision by Mr. Justice Don J. Manderscheid answers a novel question: whether section 49(7) of the Arbitration Act, R.S.A. 2000, c. A-43 allows an applicant to appeal the remedy awarded by an arbitrator without raising a question of law or seeking leave to appeal under section 44? Section 49(7) provides, in part, that “[i]f the award gives a remedy that the court . . . would not grant in a proceeding based on similar circumstances, the court may . . . grant a different remedy requested by the applicant. . .”. In Fuhr Estate v. Husky Oil Marketing Company, the applicant, Mrs. Fuhr, did not want the damages awarded her; she wanted specific performance. She argued she could by-pass the appeal provisions of the Arbitration Act and rely on section 49(7) alone for the remedy she wanted. It seems that section 49(7) has not previously been subjected to judicial scrutiny, even though an identical provision appears in the domestic arbitration legislation of Manitoba, New Brunswick, Ontario and Saskatchewan. Neither does the section appear to have been considered in the literature; the standard texts usually merely repeat what section 49(7) states. While the decision is also noteworthy because Justice Manderscheid adopts a rather unorthodox interpretation of section 44, this comment will focus on the section 49(7) issues.

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PDF version: Pre-emptive attack on arbitration succeeds

Case considered: Suncor Energy Products Inc. v. Howe-Baker Engineers, Ltd., 2010 ABQB 310

Instead of asserting an ordinary limitation period defence in the ordinary course of an arbitration proceeding, Suncor chose to attempt a pre-emptive attack in the Court of Queen’s Bench, asking the court to assume jurisdiction and strike the arbitration proceedings that were barely underway. The court did so, rather than dismissing Suncor’s application or requiring Suncor to respond to the request for arbitration so that the parties’ arbitrator could decide the limitation period issue. It is this aspect of the judgment -the “who decides?” aspect - that I will focus on in this comment. The court’s decision appears to undermine the legitimacy of domestic arbitration.

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PDF version: Much Ado about Little: The Supreme Court’s Decision in Yugraneft Corp. v. Rexx Management Corp.

Case considered: Yugraneft Corporation v. Rexx Management Corporation, 2010 SCC 19

An Alberta company, Rexx Management Corporation, was ordered to pay an almost $1 million US arbitration award in favour of a Russian company, Yugraneft Corporation. Yugraneft waited more than three years before applying to the Alberta Court of Queen’s Bench for recognition and enforcement of that arbitration award. When Yugraneft failed to gain recognition from the Court of Queen’s Bench, it appealed to the Alberta Court of Appeal and, when unsuccessful again, was granted leave to appeal and did appeal to the Supreme Court of Canada. Thirteen judges have now heard the case and all thirteen judges have agreed: the two-year limitation period in section 3 of Alberta’s Limitations Act applied to Yugraneft’s application for recognition and enforcement and thus Yugraneft acted too late. With that degree of unanimity, one has to wonder what all the fuss in the international commercial arbitration community has been about. The case was monitored closely as it wound its way through the courts and several arbitration institutions intervened at the Supreme Court of Canada.

In this post, after briefly setting out the facts and procedural history, I will focus on one of the issues dealt with by the Supreme Court, the threshold issue. The key decision by all the levels of court that considered the matter was the decision that domestic legislation imposing any kind of limitation period was applicable. I will then deal with the question of which limitation period: ten years, six years or two years? After this discussion of the case itself, I will comment on two matters. The first is the question of whether this case really is a case of public importance. The second is speculation about what action proponents of international commercial arbitration might take now, following their loss in the Supreme Court. (more…)

Case considered: Flock v. Beattie, 2010 ABQB 193

PDF version: Doubts about Arbitrator Immunity

Can arbitrators be sued if they perform their duties negligently? Can they be sued if they breach their contract with the disputing parties? These questions were recently asked and answered in Flock v. Beattie, heard by Justice Earl C. Wilson of the Alberta Court of Queen’s Bench. It is usually assumed that the law granting arbitrators’ immunity to actions in tort and contract is well settled; the case cited for that proposition is the old English case of Pappa v. Rose (1872) LR 7 C.P. 525 (Ex Ch.). Despite this complacency, Justice Wilson’s decision appears to be a rarity in Canada with its express grant of immunity to an arbitrator. In this post, I contend that the precedent-based argument in favour of extending the doctrine of judicial immunity to arbitrators is a weak one, the statutory argument against extending such immunity needs to be addressed, and the policy arguments on the no-immunity side have yet to be examined.

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Cases considered: Karaha Bodas Company, L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2010 ABQB 172 and Flock v. Beattie, 2010 ABQB 193

PDF version: Arbitration for the Quick and Final Resolution of Disputes? Hardly.

At first glance, these two cases have almost nothing in common. One concerns a multimillion dollar Indonesian geothermal energy project dispute. The other involves a matrimonial property dispute following a marriage breakdown in Alberta. What they have in common is that both of them are cautionary tales for arbitration - tales of slow, expensive processes that include numerous court applications. The dispute in the former case arose in 1998 and notice of arbitration was given that same year. The dispute in the latter case arose in 1999, and the parties agreed to arbitrate in 2002. Yet we have two 2010 court decisions arising out of those arbitrations. What went wrong?

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Case considered: Balancing Pool v. TransAlta Utilities Corporation, 2009 ABQB 631

PDF version: The Summary Judgment Exception to the Stay of Proceedings in Favour of Arbitration

A recent decision by Chief Justice Neil C. Wittmann resolves two outstanding issues with respect to the summary judgment exception to stays of court proceedings that is found in section 7(2)(e) of the Arbitration Act, R.S.A. 2000, c. A-43. The first question was whether the exception was available in the absence of a motion for summary judgment contemporaneous with the stay application. The second was that of the appropriate test for determining if the dispute was a proper one for summary judgment. The Chief Justice’s answers to these two issues nicely balances public policy in favour of enforcing arbitration agreements with public policy in favour of resolving disputes in the most just and expeditious manner possible. His answer to the first question increases the circumstances under which the summary judgment exception can be considered by a court. His answer to the second proposes a tough standard to meet, thus narrowing the basis on which a court should exercise its discretion to refuse a stay.

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Case considered: Lamb v. AlanRidge Homes Ltd., 2009 ABCA 343

 PDF version:  Staying Arbitration Proceedings under Section 7(5) of the Arbitration Act

Lamb v. AlanRidge Homes Ltd. is an interesting case, in part because the Alberta Court of Appeal calls upon the Alberta legislature to review and amend section 7 of the Arbitration Act, R.S.A. 2000, c. A-43, a section the court criticizes (at para. 16) as “far from a model of clarity.” Calls for legislative action by the courts are not that common. The case is also interesting because section 7 is perhaps the provision most often used by the courts, as it is the provision that requires a court to stay a court action when asked to do so by a party to an agreement to arbitrate.It is, however, a section rarely considered by the Court of Appeal because subsection 7(6) provides that there is no appeal from an order of the Court of Queens’ Bench staying an action or refusing a stay under section 7. The case is also interesting because Alberta’s Arbitration Act is based upon the Uniform Arbitration Act which was prepared by the Uniform Law Conference of Canada in 1989, as were the arbitration statutes in six other provinces. Section 7 was carefully drafted and debated by the Commissioners. It seems somewhat odd to think that, twenty years later, there are basic problems with interpreting and applying that provision.

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