ACE Bermuda Insurance Ltd. v. Allianz Insurance Co. of Canada et al., 2005 ABQB 975

• Judge: Hawco, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 03, 2005
• Citations: 2005 ABQB 975;(2005), 390 A.R. 342 (QB)

ACE Bermuda Ins. v. Allianz Ins. (2005), 390 A.R. 342 (QB)

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. JA.026

Ace Bermuda Insurance Ltd. (applicant) v. Allianz Insurance Company of Canada, Allianz AG, Lloyd's Underwriters, S J O Catlin & Others Syndicate Nos. 1003 and 2003 @ Lloyd's of London, Wellington Underwriting Syndicate 2020 @ Lloyd's of London, AF Beazley Syndicate No. 623 @ Lloyd's of London, Alleghany Syndicate No. 376 @ Lloyd's of London, Sackville Syndicate No. 1047 @ Lloyds of London, HG Jago & Others Syndicate No. 205 @ Lloyd's of London, FR White Syndicate No. 190 @ Lloyd's of London, AD Hicks & MH Wheeler & Others Syndicate No. 1007 @ Lloyd's of London, MRD Reith & Others Syndicate Nos. 861 and 1209 @ Lloyd's of London, DP Mann Syndicate No. 435 @ Lloyd's of London, Faraday Syndicate No. 435 @ Lloyd's of London, General Cologne Re, General Cologne Re Services UK Limited, General Reinsurance Corporation of Canada, Stephen John Oakley Catlin on his own behalf and on behalf of all other members of S J O Catlin & Others Syndicate Nos. 1003 and 2003 @ Lloyd's of London, Rolf Albert Wilhelm Tolle on his own behalf and on behalf of all other members of DP Mann Syndicate No. 435 @ Lloyd's of London, Andrew Frederick Beazley on his own behalf and on behalf of all other members of AF Beazley Syndicate No. 623 @ Lloyd's of London, Charles Christopher O'Kane on his own behalf and on behalf of all other members of Wellington Underwriting Syndicate 2020 @ Lloyd's of London, Jill Anita Loveless on her own behalf and on behalf of all other members of Alleghany Syndicate No. 376 @ Lloyd's of London, Alasdair Graham Bishop on his own behalf and on behalf of all other members of HG Jago & Others Syndicate No. 205 @ Lloyd's of London, Thomas Rokeby Conyngham Corfield on his own behalf and on behalf of all other members of FR White Syndicate No. 190 @ Lloyd's of London, Mark Handley Wheeler on his own behalf on behalf of all other members of AD Hicks & MH Wheeler & Others Syndicate No. 1007 @ Lloyd's of London, John Does 1-3 on their own behalf and on behalf of all other members of Sackville Syndicate No 1047 @ Lloyd's of London and MRD Reith & Others Syndicate Nos. 861 and 1209 @ Lloyd's of London, ACE INA Insurance, Ace Global Markets Limited, Assicurazioni Generali Spa, Independent Insurance Company Limited, Underwriter Insurance Company Ltd., Mitsui Sumitomo Insurance Co., (Europe) Ltd., previously known as Mitusi Marine & Fire Europe Ltd., ERC Frankona Reinsurance Limited, GE Frankona Reinsurance Limited, GE Frankona Ruckversicherungs-aktiengesellschaft, GE Reinsurance Corporation, Storebrand Skadeforsikring A/S, Storebrand/IF, Western Oil Sands Inc. and Western Oil Sands L.P. (respondents)

(0301 19520; 2005 ABQB 975)

Indexed As: ACE Bermuda Insurance Ltd. v. Allianz Insurance Co. of Canada et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hawco, J.

December 21, 2005.

Summary:

ACE Bermuda Insurance Ltd. (ACE) agreed to underwrite an oil sands project involving Western Oil Sands Inc. (Western). The policy provided that arbitration would take place in Calgary and be governed by Alberta law. When disputes arose, ACE claimed that its participation was subject to arbitration in London. The parties agreed that the Alberta tribunal had jurisdiction to determine that issue. The tribunal held that ACE was a necessary and proper party to the arbitration as there had been no agreement regarding arbitration in London. ACE appealed.

The Alberta Court of Queen's Bench dismissed the appeal.

Administrative Law - Topic 9102

Boards and tribunals - Judicial review - Standard of review - [See Arbitration - Topic 7803 ].

Arbitration - Topic 7803

Judicial review (incl. appeals) - General principles - Nature of review proceeding (incl. standard of review - Western Oil Sands Inc. (Western) was involved in a project that was underwritten by ACE Bermuda Insurance Ltd. (ACE) and others - The policy provided that arbitration would take place in Calgary and be governed by Alberta law - Western served ACE with a notice of arbitration - ACE claimed that its participation was subject to a special condition for arbitration in London, England - The parties agreed that the Alberta tribunal had jurisdiction to determine that issue - The tribunal held that ACE was a necessary and proper party to the arbitration as there had been no agreement regarding arbitration in London - ACE appealed, arguing that the standard of review was correctness - Western argued that a consensual international commercial arbitration decision merited significant deference - The Alberta Court of Queen's Bench held that the standard of review was one of reasonableness, deference and respect - Though s. 16(3) of the International Arbitration Act appeared to give the reviewing court wide discretion, courts were generally reluctant to interfere with commercial arbitral tribunal decisions - See paragraphs 32 to 53.

Contracts - Topic 1503

Formation of contract - Consensus or agreement - What constitutes a consensus necessary for a binding contract - ACE Bermuda Insurance Ltd. (ACE) agreed to underwrite an oil sands project involving Western Oil Sands Inc. (Western) - The policy provided that arbitration would take place in Calgary and be governed by Alberta law - ACE sent Western's agent a binder stipulating a "London Arbitration Clause (see attached)" - However, the clause was not attached and was not sent - When disputes arose, ACE claimed that its participation was subject to arbitration in London - The parties agreed that the Alberta tribunal had jurisdiction to determine that issue - ACE asserted that the broker was aware of the clause and that the condition should be deemed incorporated - The tribunal found that there had been no agreement regarding the London clause - ACE's purported agreement lacked specificity and form - ACE's subsequent actions, inactions and proposed actions showed that it was not satisfied with the simple wording "London Arbitration Clause" as the contract of arbitration - ACE appealed, requesting a declaration that there was a valid London arbitration clause - The Alberta Court of Queen's Bench denied the request - The tribunal's reasons supported its conclusion that there was no agreement - See paragraphs 54 to 67.

Cases Noticed:

Corporacion Transnacional de Inversiones S.A. de C.V. et al. v. Stet International S.p.A. et al. (1999), 104 O.T.C. 1; 45 O.R.(3d) 183 (Sup. Ct.), affd. (2000), 136 O.A.C. 113; 49 O.R.(3d) 414 (C.A.), refd to. [para. 41].

Jardine Lloyd Thompson Canada Inc. et al. v. Western Oil Sands Inc. et al., [2005] A.R. Uned. 747; 2005 ABQB 509, refd to. [para. 43].

Canada (Attorney General) v. Myers (S.D.) Inc., [2004] 3 F.C.R. 368; 244 F.T.R. 161 (F.C.), refd to. [para. 46].

United Mexican States v. Metalclad Corp. et al., [2001] B.C.T.C. 664; 89 B.C.L.R.(3d) 359 (S.C.), refd to. [para. 49].

British Crane Hire Corp. v. Ipswich Plant Hire Ltd., [1974] 1 All E.R. 1059 (C.A.), refd to. [para. 57].

Kendall (Henry) & Sons (A Firm) v. Lillico (William) & Sons Ltd., [1969] 2 A.C. 31 (H.L.), refd to. [para. 57].

Hardwick Game Farm v. Suffolk Agricultural Poultry Producers' Association Ltd. - see Kendall (Henry) & Sons (A Firm) v. Lillico (William) & Sons Ltd.

Authors and Works Noticed:

Fouchard, Gaillard and Goldman, International Commercial Arbitration (1999), p. 400 [para. 36].

Redfern, Alan, and Hunter, Martin, Law and Practice of International Commercial Arbitration (4th Ed. 2004), p. 410 [para. 35].

Counsel:

Laurent Fortier (Stikeman Elliott), for the applicant;

Roger Smith (MacLeod Dixon LLP), for the respondents.

This application was heard on November 3, 2005, by Hawco, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on December 21, 2005.