Report Released by the Toronto Commercial Arbitration Society Proposes a Single new act for Arbitration in Ontario
The final report of the Arbitration Act Reform Committee presents a potential new framework for arbitration in Ontario. The report recommends replacing the current two arbitration statutes in Ontario with a single New Act, the Commercial Arbitration Act, which is based upon the current International Commercial Arbitration Act, 2017 and would apply to both foreign and domestic commercial arbitration. The report appends a draft of the integrated Commercial Arbitration Act, which consists of a revised and expanded version of the International Commercial Arbitration Act, 2017.
On February 12, 2021, the Arbitration Act Reform Committee (the “Committee”) of the Toronto Commercial Arbitration Society released its final report (the “Report”) on a potential new framework for arbitration in Ontario. The Committee’s mandate was to consider changes to the Arbitration Act, 1991, S.O. 1991, c. 17, and the overarching premise of the project was adherence to the New York Convention and fidelity to the UNCITRAL Model Law on International Commercial Arbitration.
The Report recommends replacing the current International Commercial Arbitration Act, 2017, S.O. 2017 (“ICAA”) and the Arbitration Act, 1991 with a single new act, the Commercial Arbitration Act, based on the ICAA, which would apply to both foreign and domestic commercial arbitration. In turn, the Arbitration Act, 1991 would no longer apply to commercial arbitration, but would continue to apply to family, consumer, labour and statutory arbitrations. The Report appends a draft of the integrated Commercial Arbitration Act, which consists of a revised and expanded version of the ICAA.
The Report presents several reasons in support of consolidating the legislative framework into a single act in Ontario.
- Having two acts in Ontario for commercial arbitration has created “perpetual confusion”, as parties and the courts have repeatedly applied the wrong act.
- Not only can the distinction between international and non-international be complex, but it is becoming increasingly meaningless given the prevalence of global companies and their subsidiaries in Ontario.
- The Arbitration Act, 1991 blurs the line between domestic commercial and non-commercial arbitration by applying a common standard to all forms of arbitration, which is not necessarily appropriate when family and employment arbitration may involve unique human rights or power imbalance issues. As a result, the jurisprudence has developed in a manner that affects certain standards for domestic commercial arbitration, but not international commercial arbitration, without adequate or logical justification.
- The ICAA lacks the elements needed to support ad hoc arbitrations, which are common in Ontario, such as provisions on costs, interest, arbitrator immunity, and a procedure for the enforcement of awards.
- The ICAA includes some particularly helpful provisions, including in terms of interim measures, court discretion on the staying of court proceedings in favour of arbitration, and the prohibition on judicial interference in arbitral proceedings.
- The Report notes that a significant distinction between the Arbitration Act, 1991 and the ICAA has been the right to appeal. Under the ICAA, there are no rights of appeal. In contrast, under the Arbitration Act, 1991 parties may opt out of all rights of appeal or may also agree to expand rights of appeal to include appeals on questions of fact or questions of mixed fact and law.
The Committee provided in Appendix D a summary of the key issues that form part of the proposed changes, including a review of the solutions found in other jurisdictions and the Committee’s conclusions and proposed wordings. For example, on the topic of whether the draft Commercial Arbitration Act should contain an opt-in right of appeal, the Report notes the consensus among Committee members that an appeal right should apply to all commercial arbitrations seated in Ontario on a question of law, if the arbitration agreement so provides, without leave and directly to the Ontario Court of Appeal. Appeals as to question of mixed fact and law, or fact alone, should not be allowed.
The arbitral community certainly welcomes the concerted efforts by the Committee members since March 2017 for the improvement of the statutory regime applicable to arbitration in Ontario. Legislatures, courts, arbitrators and counsel across the country should review the Commercial Arbitration Act and consider how it may offer improvements to existing provincial frameworks for domestic and international commercial arbitration, not just in Ontario, but across the country.
Bruno Savoie is an associate in the Dubai office of Mayer Brown LLP and is a member of the firm’s International Arbitration and Construction and Engineering groups.
Hugh Meighen is a partner in the Toronto office of Borden Ladner Gervais LLP specializing in international arbitration.