Court Involvement in Commercial Arbitration

• Author: J Brian Casey
• Pages: 303-333

303

chapter eleven

Court Involvement in Commercial

Arbitration

J briAn CAsEy

A. INTRODUCTION

The extent to which the courts in Canada become involved in the

arbitral process is now governed expressly by legislation. Historic-

ally at common law, the courts had a general supervisory jurisdic-

tion respecting the conduct of arbitrations and a decidedly negative

view that any issues of law or legal rights should not be adjudicat-

ed outside of a state’s judicial regime. The modern view in Canada

is that arbitration does not form part of the judicial system of any

province1 but operates as an autonomous dispute resolution regime

in which court involvement is generally restricted to the following:2

1) requiring parties to honour their obligations under arbitration

agreements

2) supervising the conduct of the arbitration and the arbitrators

to the extent permitted by legislation

3) providing assistance in the conduct of the arbitration when

requested

4) enforcing arbitral awards regardless of where they were made

1 See Desputeaux v Éditions Chouette (1987) inc, [2003] 1 SCR 178 at paras 40–41.

2 See, for example, Arbitration Act, RSA 2000, c A-43, s 6.

J briAn CAsEy

304

All of the common law provinces make a distinction between

domestic and international arbitration. In this chapter, legis-

lation dealing with international arbitration is referred to as the

international Act or the UNCITRAL Model Law. Legislation deal-

ing with arbitration not covered by the international Act is re-

ferred to as the domestic Act.

For international commercial arbitrations, every common law

province has adopted the UNCITRAL Model Law on International

Commercial Arbitration,3 which provides for very limited court in-

volvement. Most of the common law provinces have also prom-

ulgated modern domestic arbitration legislation based on the

UNCITRAL Model Law. The federal government and Quebec have

each passed arbitration legislation based on the UNCITRAL Model

Law that covers all commercial arbitrations within their jurisdic-

tion. It is thus important when considering whether or not a court

can intervene in an arbitration to determine whether the arbitra-

tion is considered domestic or international under the appropri-

ate legislation.

Pursuant to the UNCITRAL Model Law, an arbitration is inter-

national if one of the following is true:

1) The parties to the arbitration agreement have at the time of

its conclusion their places of business in dierent countries.

2) One of the parties has its place of business outside Canada.

3) A substantial part of the obligations of the commercial rela-

tionship is to be performed outside Canada.

4) The place of the subject matter of the dispute is most closely

connected with a place outside Canada.

5) The parties have agreed that the arbitration is international.4

As a further requirement to come within a province’s inter-

national Act, the arbitration must be considered “commercial.”

The British Columbia international Act specically includes a def-

inition of “commercial” in section 1(6):

3 21 June 1985, UN Doc A/40/17, annex 1, online: www.uncitral.org/pdf/english/

texts/arbitration/ml-arb/06-54671_Ebook.pdf [UNCITRAL Model Law].

4 Ibid, art 1.