WCCAS and VanIAC Program

Alison McDougall*

 

The Western Canada’s Commercial Arbitration Society’s President, Dan McDonald, K.C., FCIArb., began the WCCAS panel at CanArb Week 2022 by sharing the goal of WCCAS: to encourage persons to consider Western Canada as a seat for arbitration, and to continue to ensure that there are experienced and well-trained arbitrators and arbitration council in Western Canada.

The WCCAS panel addressed how parties can maximize the benefits of arbitration, as well as considered alternatives approaches to various procedural issues that are encountered during arbitration. The panelists who participated were:

Ghikas began the panel by speaking about pleadings and how to look for tactical opportunities and ways to save time and money in conducting commercial arbitrations by good planning at the outset of proceedings. He cautioned that he would be speaking from a largely arbitrator perspective, to the point where his remarks may be “totally impractical” from the perspective of counsel. He also stated that his remarks would likely carry more weight in the field of domestic commercial arbitration in Canada than they would in the international arena.

Ghikas laid out three different sets of pleadings that he would be discussing:

  • Initial pleadings: notice of arbitration, request for arbitration
  • Intermediate set of pleadings: court-like pleadings (i.e., statement of claim, counterclaim, etc.)
  • Substantive pleadings: unique to arbitration, sometimes referred to as memorials, or context or statements of case

Beginning with initial pleadings, Ghikas stressed how important it is to remember how much flexibility exists when you deliver your initiating document. VanIAC rules, for example, require that an initial pleading contain a brief statement of the matter in dispute, the ICC Rules require a description of the nature and circumstances of the dispute and of the basis upon which the claims are made, and the ICDR Rules require a description of the claim and of the facts supporting it. The main task in initial pleadings is to describe the dispute in a way that clearly brings it within the scope of the arbitration clause and leaves some flexibility to develop relief concerning the dispute down the road. As Ghikas said, “you’ll find that there’s a lot of room for creativity and you can be as detailed and argumentative, or as cryptic as you choose.”

Moving on to intermediate pleadings, Ghikas recommended deferring document production requests until after each party has first presented their full case, to the extent that evidence is within their possession. You can then use that evidence as the basis for document production requests in order to get more focused document production. Using this framework can save time and money.

Ghikas wrapped up his presentation by speaking briefly about substantive pleadings. Ghikas said that it is counterproductive to submit long, detailed, argumentative witness statements rather than leaving the argument to counsel. A lot of time and money is usually invested into developing these detailed statements and could be alleviated by taking Ghikas’ advice.

         Pappas then spoke about the next phase of arbitration following proceeding, which is the development of a procedure and issuance of procedural order number one. Reminding the audience that parties and tribunals have a very wide discretion over procedure, Pappas focused on two issues:

  1. The extent to which tribunals should defer to the parties with respect to the procedure that will ultimately be developed for the course of the arbitration, and
  2. The degree to which tribunals should adopt more detailed or less detailed procedural orders at the outset of an arbitration

         Addressing his first point, Pappas shared a cautionary tale: the German case of Flex-n-Gate v GEA. After a long and drawn-out arbitration, the award was set aside on procedural grounds. This case identified the material risks associated with passively adopting a party’s chosen procedure.

         Comeau then asked how a tribunal deals with circumstances where the parties come with a fully formed procedure that presents risks of an unenforceable award, so that the tribunal has to balance respecting the parties’ wishes with the possibility of endangering the award.

         Pappas gave a multi-part answer:

  1. The tribunal should not simply sign off on whatever procedure is proposed by the parties and should instead develop its own procedural order.
  2. This procedural order should clearly indicate that the tribunal retains, in its sole discretion, the authority to make changes to the process without consent of the parties. Ideally, the tribunal should ask that the parties expressly agree in writing that the tribunal retains this discretion.
  3. The tribunal should be alive to any potential deviations from the procedural order, and where possible, enforce the terms of the procedural order.
  4. If the tribunal is minded to deviate from its own procedural order, that deviation should be clearly documented in a subsequent procedural order.
  5. The tribunal should instruct the parties not to physically sign the procedural order or any sort of documentation that would suggest that the procedural order is based on an agreement of the parties.

Moving on to his second issue, Pappas addressed whether tribunals should err on the side of a less detailed procedure at the outset of an arbitration to maintain maximum flexibility or set out a more detailed procedure. Pappas stated that, in his own experience, typically arbitration counsel want to know what the “rules of the game are” at the outset of the procedure so there are no misunderstandings, and so that they can best present their case. This can be achieved by leaning towards a more detailed procedure and will result in fewer procedural disputes as the proceedings unfold. Taking this route will result in a slight loss of flexibility, but if the tribunal retains ultimate discretion to adjust as necessary, that loss of flexibility should not negatively affect the proceedings.

Taking over from Pappas, Panel Chair, Comeau, spoke about issues related to the hearing. Comeau began speaking about evidential objections—her main point being that the rules of evidence don’t apply in arbitration. She noted, however, that it’s not “anything goes” either. Comeau believes IBA Rules on the Taking of Evidence in International Arbitration Article 9 is helpful in making those determinations. Article 9.2(g) allows the tribunal to consider all circumstances which may lead to the exclusion of evidence in light of procedural economy, proportionality, fairness, and equality in the case. Comeau believes that Article 9.2(g) is a useful framework for dealing with evidentiary objections.

Following Comeau, the audience had the opportunity to hear from Cohen about costs. Cohen began by looking at two recent decisions out of British Columbia and Ontario that question whether there is a “normal” rule on costs. In British Columbia, the court in Allard v The University of British Columbia concluded that the arbitrator did not err in concluding that there was a normal rule with respect to costs in arbitration, under which the successful party generally gets their full indemnity costs. In Ontario, the court concluded in Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership that there is no such normal rule with respect to costs in arbitration. The lesson here is that case law is inconsistent, and counsel and arbitrators should tread carefully when attempting to rely on case law that supports a "normal" rule on costs.

Cohen then moved on to address third-party funding. She advised that recent decisions on when third-party funding costs are recoverable as part of the costs have shown that third-party costs can in fact be recovered, including in circumstances where the third-party funding is not required as a result of the conduct that is at issue in the dispute. Cohen also noted that if you have obtained third-party funding and you want to recover it, disclosing that early in the proceedings will give you the best possible chance of being able to recover funding costs.

Included in the panel materials was a cost template created by Cohen that participants may find helpful and can adapt to their own needs. Cohen stated that having a template agreed to in advance can avoid counsel feeling obliged to spend time talking about the conduct of the other party and why they ought to be entitled to costs and not the other party (even if they are not successful because of conduct). If you have a template you can also agree that backup documentation or significant descriptions of the claims are unnecessary.

Changing gears from the WCCAS panel, it was time to move on to the Vancouver International Arbitration Centre(VanIAC) presentation. Joe McArthur, FCIArb, C.Arb, VanIAC Chair & Director, and Partner at Blakes, as well as Alexandra Mitretodis, VanIAC Director and Partner at Fasken, advised on the new VanIAC rules which apply to any international arbitration subject to VanIAC administration. These new rules adopt a number of best practices that will be found in rules worldwide, in some of the best arbitral institutions. One of the key highlighted rules was that hearings can now be virtual where the parties have agreed or where the tribunal directs.

McArthur and Mitretodis wrapped up the afternoon by presenting WCCAS’s annual awards. Award recipients are listed below:

 

* JD Student, Queen’s University Faculty of Law; Managing Editor of Marketing, Canadian Journal of Commercial Arbitration.