Lawyers Patent and Trade-mark Agents Lawyers · Patent and Trade-mark Agents The UNCITRAL Model Law on International Commercial Arbitration: 25 Years The UNCITRAL Model Law in Canada 4 June 2010 Jacques S. Darche

Lawyers · Patent and Trade-mark Agents 2 WHAT IS CANADA?

Lawyers · Patent and Trade-mark Agents 3 Canada : a Federal State

Lawyers · Patent and Trade-mark Agents 4 A Culturally Diverse Country 2 legal systems are applied in Canada: Common Law in most provinces (i.e. British Columbia, Alberta, Ontario) and Civil Law in Quebec. Canada is constitutionally bilingual: English and French. 3 provinces offer court services in English and French (Ontario, Quebec, New Brunswick).

Lawyers · Patent and Trade-mark Agents 5 Canada’s Proactive Role in International Commercial Arbitration In June 1986, Canada adopted the UNCITRAL Model Law on International Commercial Arbitration. It was the First country in the world to do so. Moreover, each and every province (10) and territory (3) adopted the Model Law and adapted it according to their own legal standards.

Lawyers · Patent and Trade-mark Agents 6 Thus, there have been 3 different approaches in the adoption of the Model Law : 1.Attaching the Model Law as a schedule to a short enactment with minor clarifications (i.e. Federal (1986), Ontario (1990), Alberta (1986));

Lawyers · Patent and Trade-mark Agents 7 Commercial Arbitration Act R.S., 1985, c. 17 Article 2 : " Code " means the Commercial Arbitration Code, based on the model law adopted by the United Nations Commission on International Trade Law on June 21, 1985, as set out in the schedule;

Lawyers · Patent and Trade-mark Agents 8 Commercial Arbitration Act R.S., 1985, c. 17 Article 4: (1) This Act shall be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose. (2)In interpreting the Code, recourse may be had to (a) the Report of the United Nations Commission on International Trade Law on the work of its eighteen session, held form June 3 to 21, 1985; and (b) the Analytical Commentary contained in the Report of the Secretary General to the eighteen session of the United Nations Commission on International Trade Law.

Lawyers · Patent and Trade-mark Agents 9 Commercial Arbitration Act R.S., 1985, c. 17 Commercial Arbitration Code - Schedule "(Based on the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law on June 21, 1985) Any additions or substitutions to the Model Law are indicated by the use of italics. Except as otherwise indicated, the material that follows reproduces exactly the Model Law. "

Lawyers · Patent and Trade-mark Agents Reproducing the Model Law in the form of a stand-alone statute with minor additions (i.e. British Columbia (1996));

Lawyers · Patent and Trade-mark Agents 11 3.Adopting the Model Law in Quebec’s Code of Civil Procedure (in 1986).  Model Law: Articles C.C.P.  New York Convention: Articles C.C.P.

Lawyers · Patent and Trade-mark Agents 12 Quebec did more in 1986 than just incorporate the Model Law, it also modified the Civil Code of Quebec to introduce substantive articles on arbitration contracts:  Domestic arbitration (Articles C.c.Q.)  International arbitration (Articles 940.6, C.C.P.)

Lawyers · Patent and Trade-mark Agents 13 Code of Civil Procedure, Art : "Where matters of extraprovincial or international trade are at issue in an arbitration, the interpretation of this Title, where applicable, shall take into consideration: (1) the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law on 21 June 1985; (2) the Report of the United Nations Commission on International Trade Law on the work of its eighteenth session held in Vienna from 3 to 21 June 1985; (3) the Analytical Commentary on the draft text of a model law on international commercial arbitration contained in the report of the Secretary-General to the eighteenth session of the United Nations Commission on International Trade Law."

Lawyers · Patent and Trade-mark Agents 14 The range of the Model Law also depends on the underlining jurisdiction For instance, British Columbia and Ontario modified the Model Law to exclude interprovincial arbitration from its application. Quebec decided that the Model Law would be applicable for every arbitration, whether domestic, extraprovincial or international.

Lawyers · Patent and Trade-mark Agents 15 STAYS OF JUDICIAL PROCEEDINGS

Lawyers · Patent and Trade-mark Agents 16 One of the core objectives of the Model Law was to limit interference by national courts in international commercial arbitration proceedings. This principle is well-recognized in Canada and has recently been reiterated by the Supreme Court of Canada.

Lawyers · Patent and Trade-mark Agents 17 Dell Computer Corp. v. Union des Consommateurs, 2007 SCC 34 (appeal from Quebec’s Court of Appeal) The Court confirmed " that as a general rule, in any case involving an arbitration agreement, a challenge to the arbitrator’s jurisdiction must be resolved by the arbitrator first."

Lawyers · Patent and Trade-mark Agents 18 Despite the application of this principle, the Court also stated that "A court should depart from the rule of systematic referral to arbitration only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law, or on a narrow question of fact which can be decided by a cursory review of documentary evidence." The bench justified its position with 3 arguments: -The Court’s expertise in resolving such questions; -The Court is the forum to which the parties apply first when requesting referral; -The rule that an arbitrator’s decision regarding his or her jurisdiction can be reviewed by a court.

Lawyers · Patent and Trade-mark Agents 19 COMPETENCE- COMPETENCE (Art. 16 Model Law)

Lawyers · Patent and Trade-mark Agents 20 All federal and provincial legislations recognize the principle according to which an arbitrator has the power to decide upon its own jurisdiction (incorporation of art. 16 Model Law). However, when a Canadian court has to decide on a stay of judicial proceedings concerning an arbitration taking place in another country, it has to consider if the principle of competence-competence exists in the jurisdiction of arbitration.

Lawyers · Patent and Trade-mark Agents 21 H&H Marine Engine Services Ltd. v. Volvo Penta of the Americas Inc., 2009 BCSC 1389 The Court decided that "In the absence of an evidentiary or statutory basis for application of the competence-competence principle, the Court should determine whether an arbitration agreement exists before s. 8 of the ICAA (International Commercial Arbitration Act, B.C.) can be invoked."

Lawyers · Patent and Trade-mark Agents 22 RECOGNITION AND ENFORCEMENT (Art. 35 Model Law)

Lawyers · Patent and Trade-mark Agents 23 Limitation periods for enforcement : Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19 (appeal from Alberta’s Court of Appeal) The Court stated that "The conclusion must be that the New York Convention was intended to allow Contracting States to impose local time limits on the recognition and enforcement of foreign arbitral awards if they so wished."

Lawyers · Patent and Trade-mark Agents 24 This conclusion was based on art. III of the New York Convention that states that recognition and enforcement shall be " in accordance with the rules of procedure of the territory where the award is relied upon ". Thus, the Court determined that limitation periods fall under the rubric of "rules of procedure".

Lawyers · Patent and Trade-mark Agents 25 Enforcement while Set-Aside Proceedings are Pending In obiter, the Supreme Court in Yugraneft v. Rexx stated that -the courts of any State party to the convention would be entitled to refuse to grant recognition and enforcement of the award at issue in the case until  the three-month appeal period had expired; or,  if an appeal was launched, until the appeal was concluded.

Lawyers · Patent and Trade-mark Agents 26 Public Order : Smart Systems Technologies Inc. v. Domotique Secant Inc., 2008 QCCA 444 The Court decided that " Decisions that give no reasons are not necessarily in violation of public order. However, since the parties had chosen the UNCITRAL Model Law to govern the arbitration, they had intended for the award to state the reasons upon which it was base. "

Lawyers · Patent and Trade-mark Agents 27 ARBITRATION AGREEMENTS AND CLASS ACTIONS

Lawyers · Patent and Trade-mark Agents 28 In Quebec : Dell Computer Corp. v. Union des Consommateurs, 2007 SCC 34 (appeal from Quebec’s Court of Appeal) Before Dell Computer Corp. v. Union des Consommateurs, a valid arbitration clause in a contract impeded the consumer to file a class action. Indeed, the Court stated that although the class action is of public interest, it is a procedure, and its purpose is not to create a new right. After Dell, Quebec and Ontario’s Consumer Protection Act were enacted to prohibit a mandatory arbitration clause in a consumer contract.

Lawyers · Patent and Trade-mark Agents 29 In British Columbia : MacKinnon v. National Money Mart Co., 2009 BCCA 103 Even if Dell was rendered after an appeal of a Civil law jurisdiction, the Court of Appeal of British Columbia held that it was applicable in its province. The arbitration legislation of Quebec and British Columbia were similar in genesis because both were rooted in the 1958 New York Convention. British Columbia’s Business Practices and Consumer Protection Act was not amended.

Lawyers · Patent and Trade-mark Agents 30 Conclusion There is a significant increase in international arbitration in Canada. Thanks to the UNCITRAL Model Law and the New York Convention, Canada now has a modern, coherent approach to international commercial arbitration law and practice.

Lawyers · Patent and Trade-mark Agents 31 Happy 25th Anniversary!