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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Cases Considered: Matti v. Wawanesa Mutual Insurance Company, 2009 ABQB 451

PDF version:  Umpires: Qualifications, etc.

This is a post about insurance, not baseball. Umpires decide certain types of financial disputes between property owners and insurance companies in particular circumstances. Insurance claims involve umpires when the insured and insurer disagree about the value of damaged or destroyed property or the amount of the insured’s loss. The insured and the insurer each appoint an appraiser and the appraisers appoint an umpire. If the appraisers cannot agree on how to resolve the dispute, then the two appraisers submit their arguments to the umpire. The decision of two of those three persons decides the matter, which means, in effect, that the umpire decides. If the appraisers cannot agree on an umpire, then the insured or insurer can ask the court to appoint one. What qualifications should these decision-makers have? That question has not been the subject of much judicial consideration in Canada and so this decision by Mr. Justice W.P. Sullivan is a welcome one. But it still leaves open many other questions about insurance appraisals; they are a rather ill-defined process.

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Cases Considered:  Jamani v. Subway Franchise Systems of Canada Ltd., 2008 ABQB 438

PDF Version:  Arbitration is not Administrative Law

The reasons that arbitration is a legitimate way to resolve a dispute are not the same reasons that administrative decision-making is legitimate. Arbitration is normally a process voluntarily chosen by parties who want a dispute decided by an impartial judge of their own choosing, whose decision on the merits of the dispute will be final and binding. It is a private alternative to the courts (albeit governed by legislation and even mandated by legislation in some cases). The justification for legislative and judicial deference to arbitration rests on the principle of freedom of contract and the norm of party autonomy. Administrative law, on the other hand, is public law. Administrative agencies and tribunals are created by federal and provincial legislative bodies and given tasks to do on behalf of the citizens of the country or province. Administrative decision-makers do not just resolve disputes between parties; they are also responsible for fulfilling the goals of their agency. Judicial review of administrative decisions exists, in part, to control the exercise of power by the executive and administrative branches of the state. Nevertheless, courts have recently been conflating the two areas of law and the decision in Jamani v. Subway Franchise Systems of Canada Ltd. is an example of this trend.

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Cases Considered: Resin Systems Inc. v. Industrial Service & Machine Inc., 2008 ABCA 104

PDF Version: International Commercial Arbitration: Too Costly Private Justice?

The Court of Appeal’s Memorandum of Judgment in Resin Systems Inc. v. Industrial Service & Machine Inc. offers a rare, albeit small, glimpse into the arena of international commercial arbitration. It tells us something about the cost of this type of private justice; one of the major differences between courts and arbitration is that contractual arbitrators are not paid for by taxpayers, but are privately paid for. The judgment also illustrates an unusual lack of deference to arbitration on the part of the Court of Appeal and a lack of faith in an arbitrator’s ability to control the fairness and efficiency of arbitration proceedings through the allocation of costs.

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Cases Considered: Lion’s Gate Homes Ltd. v. Shand, 2008 ABQB 15

PDF Version: Leave to Appeal Arbitration Awards and the Addition of the Public Interest

This brief decision by Mr. Justice D.K. Miller provides an opportunity to look at how the courts in Alberta have interpreted subsection 44(2) of the Arbitration Act, R.S.A. 2000, c. A-43. This is the provision that usually governs the ability of the parties to appeal an arbitrator’s award. Although subsection 44(2) does not, on the face of it, require that there be any public interest in the parties’ dispute or the award resolving that dispute or an appeal from the award, judges of the Court of Queen’s Bench of Alberta have fairly consistently read in that extra element.

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Cases Considered:  Karaha Bodas Company, L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2007 ABQB 616

Keywords: arbitration, international commercial arbitration, enforcement of foreign awards, moot case, costs

PDF Version: Moot Case Continues to Wind Its Way Through Alberta Courts

This October 2007 decision by Mr. Justice Robert A. Graesser is one very small part of a long and complex tale that is all too well known in international commercial arbitration circles. The parties’ dispute has been litigated extensively in several countries over the past nine years. With Mr. Justice Graesser’s decision, it will continue to be litigated in this province even though the parties and their dispute have no connection to Alberta and a decision in Alberta would have no effect on the rights of the parties, would not create a useful precedent, and would not put an end to the adversarial relationship between the parties. (more…)

Cases Considered: Flock v. Flock, 2007 ABCA 287, Flock v. Flock, 2007 ABQB 307

Keywords: arbitration, matrimonial property division, leave to appeal

PDF Version: Private Justice Delayed

In September 2007, Mr. Justice Peter Martin denied leave to appeal of a May 2007 decision by Madam Justice K.M. Horner setting aside an arbitrator’s award dividing matrimonial property. The couple embroiled in this dispute had married in 1982, separated in 1994 and divorced in 1999. The couple had a considerable amount of real property and thorny issues related to property owned prior to the marriage and the value of those properties that should be exempted from the matrimonial property regime. A 6-day arbitration hearing was held before one arbitrator, Alan Beattie, Q.,C., in Calgary in 2003 and he rendered an award 33 months later, in July 2006. Article IX of the arbitration agreement between the couple and Mr. Beattie required the arbitrator to communicate his award to the parties within 60 days of the end of the hearing. The past year of litigation has been devoted to the husband’s application to set aside the July 2006 award.

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