Older Uniform Acts

Judicial Interpretation of the Uniform Arbitration Act 1995

LOGIC STATEMENT RE: JUDICIAL INTERVENTION:

1.    Arbitration is intended to provide an alternate means of dispute resolution outside of the courts.

2.    Once parties agree to pursue arbitration, judicial intervention in arbitration should be limited to very narrow circumstances.

Changes to Section 6:

Recommendation 1:

Change the wording of s.6 to that used in the Alberta, Ontario and Saskatchewan legislation.

Current Wording of Uniform Act:

6.    No Court shall intervene in matters governed by this Act, except as this Act provides.

New Wording Proposed:

6.    No court may intervene in matters governed by this Act, except for the following purposes as provided by this Act:

(a)    to assist the arbitration process;

(b)    to ensure that an arbitration is carried on in accordance with the arbitration agreement;

(c)    to prevent manifestly unfair or unequal treatment of a party to an arbitration agreement;

(d)    to enforce awards.

Hopefully, this expanded wording of section 6 will serve to caution the courts about their role within disputes under private arbitration agreements.

LOGIC STATEMENT RE: GRANTING OF STAYS:

1.    Arbitration cannot be used to insulate a dispute from the courts, if the dispute is one which must be settled in court.

Changes to Section 7:

Recommendation 2:

Change the wording of s.7(2)(c) to provide better clarity as to when a refusal to grant a stay is warranted based on the subject matter of the dispute.

Current Wording of Uniform Act:

7(2)        However, the court may refuse to stay the proceeding in any of the following cases:

(c)    the subject-matter of the dispute is not capable of being the subject of arbitration under (enacting jurisdiction) law;

New Wording Proposed:

Two options are proposed for s.7(2)(c):

i)    The subject matter of the dispute is not capable of being the subject of arbitration under the law of [enacting jurisdiction] even if the parties expressly agree to submit the dispute to arbitration.

or,

ii)    The parties could not under the law of [enacting jurisdiction] enter into an agreement settling the dispute.

*Note:    The same wording will need to be substituted in s.46(1)(e) as well.

Hopefully, this revision would avoid the use of discretion in granting stays as indicated by Justice Perras in his decision in McCulloch v. Peat Marwick Thorne.

LOGIC STATEMENT RE: APPEALS:

1.    Parties may agree to allow appeals from an arbitrator's decision (ie. on questions of law, fact or mixed law and fact).

2.    If the arbitration agreement is silent as to appeals, then an appeal on a question of law is allowed, provided certain criteria are met and the question being appealed is not the very question which was referred to arbitration in the first place. (Alberta addition)

3.    Parties cannot completely bar an appeal on a question of law if the criteria are met.

[Note: Ontario and Saskatchewan Acts allow parties to exclude an appeal on a question of law. The proposed s.45(3) is still appropriate even if the Model Act is amended in that way.]

Changes to Section 45:

Recommendation 3:

Change the order of the wording of s.45(1),(2) and (3) to emphasize that parties can agree what may or may not be appealed.

Current Wording of Uniform Act:

45(1)    A party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,

(a)    the importance to the parties of the matters at stake in the arbitration justifies an appeal; and

(b)    determination of the question of law at issue will significantly affect the rights of the parties.

(2)    If the arbitration agreement so provides, a party may appeal an award to the court on a question of law.

(3)    If the arbitration agreement so provides, a party may appeal an award to the court on a question of fact or on a question of mixed fact and law.

New Wording Proposed:

45(1)    If the arbitration agreement so provides, a party may appeal an award to the court on a question of law, a question of fact or a question of mixed fact and law.

(2)    A party may always appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,

(a)    the importance to the parties of the matters at stake in the arbitration justifies an appeal; and

(b)    determination of the question of law at issue will significantly affect the rights of the parties.

(3)    Subsection (2) does not apply if the question of law on appeal is the question that was expressly referred to arbitration in the first place.

This revision would help to emphasize the fact that parties can agree on what can be appealed, but that it is possible to appeal questions of law with leave, if the criteria are met and providing the question of law is not the express question which was referred to arbitration.

No change is proposed to the Uniform Act concerning the ability of theparties to exclude appeals altogether. Jurisdictions enacting the Uniform Act will have to decide whether to follow Ontario and Saskatchewan in allowing a total ban on appeals, or Alberta and New Brunswick in requiring that some appeals be possible.

Recommendation 4:

Remove the phrase "does not deal with" from s.45(1) of the Ontario legislation and rewrite it to conform with s.45(2) above.

The phrase "does not deal with" has led to the differing lines of authority as to what kind of provisions in an arbitration agreement or clause "deal with" the issue of appeal. It appears this phrase has given judges an opportunity to grant leaves to appeal on questions of law despite the fact that the parties agreed the arbitrator's decision would be "final and binding". The phrase is particularly problematic where the reference to arbitration is drafted before the new legislation is in place.

Next Annual Meeting

2017 Conference

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Regina, SK

August 13 - 17, 2017
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