The New ADRIC Arbitration Rules:
An Updated Approach to Commercial Arbitration in Canada – Part 2
By William G. Horton, C.Arb, Lisa C. Munro, FCIArb, Q.Arb, and Emily McMurtry, ACIArb
The new ADRIC Arbitration Rules offer expedited procedures. They provide post-award recourse, an optional appeal process, and emphasize party autonomy. The rules aim for efficient, fair, and flexible arbitration, reflecting ADRIC’s commitment to user feedback and continuous improvement. This article is Part 2 of a two-part series about the new Arbitration Rules.
I. INTRODUCTION
This is the second of two consecutive articles in ADR Perspectives on ADRIC’s new Arbitration Rules. The first article ran in the last issue of the newsletter. It outlined a number of highlights in ADRIC’s new Arbitration Rules, and we commend that article to you. Combined, the two articles provide the reader with a valuable overview of the features of the new Rules.
II. MORE HIGHLIGHTS OF THE RULES
1. Procedure/Sample Procedural Order
The arbitration must be conducted under Rule 4.7 in accordance with the parties’ agreement, unless the tribunal finds it does not comply with mandatory requirements of applicable law. Absent party agreement, the tribunal has discretion to set the procedure. If the tribunal sets the procedure, the Rules state that the tribunal should apply the following two principles unless it is satisfied that there are good reasons not to do so (Rule 4.7.2):
- Principles relating to evidence-first arbitration, whereby the first substantive submission by any party must include all evidence within that party’s possession or control including any witness statements, on which it intends to rely in advancing its claims or defences, or in resisting the claims or defences of an opposing party; and
- Principles relating to the right of a party to seek and obtain relevant and material Documents and information from an opposing party where the written request is narrow and specific to avoid the “fishing expeditions” that are common in litigation practice.
In addition to a Sample Procedural Order, the Rules contain a detailed checklist for the first procedural meeting setting out most, if not all, issues that may need to be considered in modifying or supplementing the Sample Procedural Order, or perhaps in choosing a different procedure (Appendix R1).
2. Access to Expedited/Simplified Procedures and Med-Arb
Under the Rules, parties have the benefit of access to Expedited/Simplified Procedures (Rule 6.2.1 and Appendix R2) and the ADRIC Med-Arb Rules (Rule 4.20.1). Rule 4.7.1(c) encourages the parties and the tribunal to consider whether the Expedited/Simplified Arbitration Procedures (Appendix R2) can be used because of the size, simplicity or urgency of the dispute. With respect to Med-Arb, Rule 4.20.1 provides that the parties may agree to “continue” the arbitration as a Med-Arb, and unless they agree otherwise, the tried and tested ADRIC Med-Arb Rules apply. This flexible approach gives parties the opportunity to engage in constructive dialogue at any time facilitated by the arbitrator, who will already have a deep understanding of the case and each side’s specific needs and interests.
3. Post-Award Recourse to the Tribunal
The Rules provide procedures and time limits for the parties to return to the tribunal after an award has been issued to seek an amendment, variation, clarification to or correction of awards, rulings, orders, or decisions, or delivery of an additional award (Rule 5.4). The grounds for seeking recourse are expanded beyond those provided by other rules and applicable statutes, which typically limit post-award recourse to mathematical, typographical and clerical errors or other “slips and omissions”.
4. Optional, Limited, and Integrated Right of Appeal
Under the Rules, the default position is that there is no appeal from an award, ruling, order, or decision unless the parties agree otherwise (Rule 5.4.6). It is in keeping with the Uniform Arbitration Act (2016), adopted by the Uniform Law Conference of Canada, that appeals to the court from arbitration awards should be on an “opt-in basis” only, i.e., where the parties have expressly made that choice in their arbitration agreement. As with all the Rules, this is subject to any provisions of applicable law which prevent parties from limiting appeals to the court from arbitration awards. Equally, nothing in the Rules prevents parties from agreeing to pursue appeals in the courts on whatever basis applicable law allows.
Subject to those qualifications, where parties agree, the Rules provide for appeal within the arbitration process on an “extricable question of law that is material to the outcome of the case”. Again, this is consistent with the recommendations of the Uniform Law Conference of Canada, except that the Rules make it explicit that appeals are to be brought on “extricable” questions of law. Canadian jurisprudence is somewhat equivocal on the significance and application of the requirement of “extricability”. The Rules make it clear that the element of extricability of the question of law is important. The assumption is that by choosing an arbitration appeal process the parties are seeking a more focussed right of appeal and an appeal process that does not involve re-arbitrating issues of fact and issues of mixed fact and law that are unique to the case in a different forum.
For those who choose this appeal option, the process is efficient. The appealing party must commence the process within 20 days of delivery of the award and, unless the parties agree otherwise, the appeal proceeds in writing before a panel of three arbitrators. The Rules provide that the appeal tribunal will decide the process to be used in the appeal, but must do so “with the goal of” completing the appeal process within 3 months of the Notice of Appeal.
Overall, the appeals procedure in the Rules strikes a balance between party autonomy, finality, and flexibility through its opt-in appeals process that limits the scope of appealable matters, while preserving the parties’ expectations of privacy and confidentiality at the time they agreed to arbitrate.
III. CONCLUSION
Parties can adopt the Rules as is and without modification, or tailor them to suit their specific needs. Either way, ADRIC remains available to provide efficient administrative support, without the unnecessary process that sometimes characterizes institutional involvement. Ultimately, the Rules provide the flexibility that reflects arbitration’s raison d’être: party autonomy.
ADRIC’s commitment to giving parties flexible and customized processes to achieve full, fair, speedy, and final adjudication will only work if users provide feedback on the Rules. Parties, counsel, and arbitrators are invited to reach out to any member of the Committee that drafted the Rules, provide comments on the website, or contact directly ADRIC Case Services at arb-admin@adric.ca. With this feedback, the Rules will continue to evolve to achieve their purposes.
William G. Horton, C.Arb, was co-chair and discussion leader of the ADRIC Committee that drafted the new Arbitration Rules. He is an independent arbitrator of Canadian and international business disputes.
Lisa C. Munro, FCIArb and Q.Arb, is a partner/arbitrator at Lerners LLP and an arbitrator on the Arbitration Place roster. She is the Editor of Arbitration Matters (www.arbitrationmatters.com), which provides summaries of newly-released arbitration cases in Canada, along with commentary. She also hosts Arbitration Boot Camp, a monthly webinar series that focuses on practical commercial arbitration issues. Lisa was a member of the ADRIC Committee that drafted the new Arbitration Rules.
Emily McMurtry, ACIArb, is a Senior Associate at Dentons Canada LLP with extensive experience as domestic and international arbitration counsel, both ad hoc and under institutional rules. She is also a roster arbitrator with the Fruit and Vegetable Dispute Resolution Corporation, writes regularly on arbitration topics, and is a coach for the University of Ottawa’s Willem C. Vis International Commercial Arbitration Moot team.
