Reform of international arbitration law in Canada

Publication October 2017

Ontario paves the way

Under the impetus of the Uniform Law Conference of Canada (ULCC), Ontario recently became the first province to update its international commercial arbitration regime since the initial wave of arbitration legislation following Canada’s accession in 1986 to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).

The new Uniform Act

The ULCC, a century-old institute composed of provincial and federal government representatives and charged with promoting uniformity of the law across Canada, developed the first version of the Uniform International Commercial Arbitration Act (Uniform Act) in 1986. The Uniform Act was subsequently adopted by Ontario (in 1990) and many other Canadian provinces, occasionally with minor modifications.

Over the last decade, however, the need for modernizing this legislation became increasingly acute. Growing confusion regarding discrepancies between and among provincial and federal international commercial arbitration Acts along with the 2006 amendments to the UNCITRAL Model Law led to the development and adoption of a new Uniform Act in April 2014 (2014 Uniform Act). Until recently, the 2014 Uniform Act had not been implemented in any province.

Ontario updates its international commercial arbitration regime

Building on the ULCC’s 2014 Uniform Act, Ontario updated its international arbitration regime with the adoption of a new International Commercial Arbitration Act (Ontario ICA Act), in force from 22 March 2017. A key feature of the Ontario ICA Act – and one which may come as a surprise to many international arbitration practitioners – is that Ontario has only now formally incorporated the New York Convention into its legislation. The 2017 Ontario ICA Act also clarifies that the New York Convention applies equally to arbitral awards and agreements made before or after the entry into force of the Act. Doubts over the applicability of the New York Convention resulting from the repeal in 1990 of the Foreign Arbitral Awards Act have now been permanently dispelled.

Like the 2014 Uniform Act, the Ontario ICA Act also implements the 2006 amended version of the UNCITRAL Model Law. Key changes include the expansion of the notion of “writing” as a requirement for the validity of arbitration agreements and the clarification of the scope and availability of interim relief from an arbitral tribunal – the Ontario ICA Act now expressly recognizes an arbitral tribunal’s power to order interim measures, including injunctive relief and security for costs, and provides for such orders to be recognized and enforced by the Superior Court of Justice.

Finally, the reform of Ontario’s international arbitration regime also served as an opportunity for Ontario to  address the controversial 2010 Canadian Supreme Court ruling in Yugraneft Corp. v Rexx Management, 2010 SCC 19. In that case, the Supreme Court held that enforcement of foreign arbitral awards was subject to the standard two-year limitation period applicable to any cause of action in Alberta, rather than the ten-year limitation period for enforcing judgments. The Ontario ICA Act now imposes a ten-year limitation period for enforcing arbitral awards. This and the other changes implemented in the new Ontario ICA Act are meant to send an unequivocal signal that international arbitration is not a second-class form of dispute resolution and that it will be afforded utmost protection by courts of law in Ontario.

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