ICC Canada: Enforcement of Arbitral Awards
Alessandra Harkness
This panel, the first offering as part of ICC Canada’s annual conference, was hosted by Amal Bouchenaki (Herbert Smith Freehills LLP, New York ) and featured four panelists: Jurriaan Braat (Managing Director Enforcement & EMEA, Omni Bridgeway), Sivakumaren (Robin) Mardemootoo (Managing Partner (Mauritius), Dentons ), Audrey Boctor (IMK Advocates, Montreal), George J. Pollack (Davies Ward Phillips & Vineberg, Toronto).
George J. Pollack kicked off the discussion by highlighting one of the main issues with enforcing foreign awards in Canada: determining which court (whether provincial or federal) the case should be assigned to. He stated that when a party seeks to enforce an award in Canada, it is essential to ensure that they go to the right court. Next, Audrey Boctor discussed Canada’s robust doctrine of state immunity; this issue is necessarily governed by local law; even if a party has a decision from another court stating that state immunity does not apply, Canadian court must independently decide the issue under Canadian law. When a sovereign claims blanket immunity from suit, even though the Canadian court is not retrying the facts, recognition and enforcement of proceedings are considered to be a judicial demand, giving rise to a distinct adversarial proceeding, so the State Immunity Act may apply. Further, there is a separate immunity from seizure; a state is able to avoid seizure of its assets unless there is a waiver of immunity or an exception under the Act applies.
Jurriaan Braat went on to discuss the more personal and nuanced aspects of how to conduct an arbitration. He detailed that arbitrations start with the parties agreeing to the procedural aspects and then moving to a second pillar, which is focused on personal negotiation and building rapport between the parties. He argued that parties should try to build rapport and identify commonalities between them, even if the negotiations are coming after an arbitral award has been issued, at the enforcement stage. It can be helpful, particularly when dealing with governments, to meet in a neutral location, as this means that participants will be more focused on the negotiations and have a clear mandate for their trip. Further, he discussed how a government may be more willing accept a public apology versus a corporation who may simply want a settlement. In settlement negotiations, the priority shifts to the respondent; a respondent can create that priority by seizing an asset with a high nuisance value, all with the goal of creating attention and inconvenience, in order to bring the parties together to negotiate.
The panel further discussed some workarounds for sovereign immunity. Sivakumaren Mardemootoo discussed the public policy defence as a method to get out of the enforcement of arbitral awards. He argued that there is a lot of uncertainty and unpredictability surrounding the public policy defence in different jurisdictions, and this uncertainty may jeopardize the credibility of arbitral awards. He argued it is problematic that there is no common worldwide definition or practice of public policy. The concept of public policy is ambiguous, subjective, and unpredictable. Moreover, public policy must be flexible, since it is founded on the needs of the community, which can shift over time. This means that there can be significant differences between states, which can create conflicting judgements. Parties must therefore think carefully about where they want to enforce awards.
The last topic considered by the panelists was the impact of enforcement proceedings when the award is confidential. The main issue discussed was whether the ability of a party to enforce an award was undermined by the confidentiality of said award. Pollack articulated that in Ontario there is no default expectation of confidentiality attaching to the arbitration award. However, Boctor mentioned that the opposite approach prevails in Quebec. ADR is confidential by default in Quebec, so the burden lies on the party trying to enforce the award to show that it has to be made public in the interest of justice. Further, Boctor stated that even though the conduct of the parties is not a listed factor for refusing enforcement of awards, the discretionary power held by courts in enforcement proceedings means that parties must conduct themselves so as not to tempt a court to find against them.