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Getting the word out

Legal Reports: ADR
|Written By Paul Brent
Getting the word out
Illustration: Dushan Milic

Over the years, Canada has earned its reputation as a destination for international arbitration. Canada was the first country to adopt and implement the United Nations’ UNCITRAL Model Law implementation statutes 25 years ago as well as the first to sign on to the New York Convention, an international treaty covering foreign arbitration awards. The country has also prospered as a place to carry out commercial arbitration due to its proximity to the United States, its bilingual and multicultural status, reputation for fairness and neutrality, common and civil law systems, and a court system supportive of arbitration.

Arbitration practitioners in Canada can take satisfaction in the fact their field of practice seems to be growing and healthy. The number of cases heard in Canada continues to grow each year, arbitration is increasingly being chosen over court actions among parties, and courts have made a number of judgments in support of arbitration. The main centres for international arbitration in Canada are Montreal, Toronto, Calgary, and Vancouver.

Arbitration practitioners also can’t help but regularly read about Canada as about one-third of the cases worldwide that interpret UNCITRAL model law or deal with it come out of this country — a testament to all the jurisdictions that deal with arbitration. According to the UNCITRAL Secretariat, which maintains a database of case law on UNCITRAL texts, of the 316 decisions reported, 112 emanate from Canadian courts.

The Supreme Court of Canada has also made a series of judgments favouring arbitration including Yugraneft Corp. v. Rexx Management Corp.; Union des consommateurs c. Dell Computer Corp.; Desputeaux c. Éditions Chouette (1987) inc.; and Seidel v. TELUS Communications Inc.

Just how well respected Canada is as a location for international arbitration was illustrated in a recent Global Dispute Resolution report conducted by Taylor Wessing. The report ranked Canada third behind Switzerland and Australia in a list of 21 countries as a place for arbitration. Canada, along with the U.K., Australia and Singapore, “were found to be predictable and reliable jurisdictions in which to determine disputes . . . ” the study concluded after its authors surveyed 300 international respondents in mid-2009. Canadian universities are also doing their part to maintain Canada’s place on the world arbitration stage. This year, a team of law students from the University of Ottawa won the 18th annual Willem C. Vis International Commercial Arbitration Moot held in Vienna. The victory marked the second time a Canadian university has won the Vis award, the first being Osgoode Hall Law School in 2004.

There is, however, concern in the arbitration community that Canada could lose its unofficial favoured-nation status for a number of reasons. In a sense, the country has rested on its laurels in the arbitration sphere, failing to enact new legislation dealing with this growing field and neglecting to create special courts to hear arbitration cases, which has resulted in unexpected decisions that garner prominent play internationally. As well, international centres are spending more time and effort to tout themselves as arbitration destinations. Besides the traditional arbitration heavyweight locales of New York, Paris, and London, places such as Hong Kong, Dubai, and Stockholm are touting their international arbitration credentials complete with glitzy marketing materials. “It is a good news, bad news story I guess,” says Barry Leon, a partner at Perley-Robertson Hill & McDougall LLP in Ottawa. “We are leaders in some ways and there is a lot of opportunity that lies ahead but we have got to get our act together.”

Leon, who is also the incoming chairman of the arbitration committee of the Canadian Chamber of Commerce (recently renamed the International Chamber of Commerce), says beyond the disadvantages of not having specialized courts and aggressively pursuing arbitration work, federal and provincial governments have been slow to act. Ottawa now has a push on to sign more bilateral investment treaties dealing with arbitration — designed to attract foreign companies. Canada was also slow to sign on to the World Bank’s International Centre for Settlement of Investment Disputes, which is designed to keep commercial disputes out of the courts. A number of provinces, including Quebec and Alberta, have yet to pass legislation to adopt the convention. “It has put our companies behind, it makes Canada less attractive as a place for foreign investment to some degree and it makes it more difficult for Canadian companies that are investing abroad,” says Leon.

The recognition that more has to be done to ensure that Canada maintains its “market share” with regard to international arbitration has spurred the country’s arbitration community to push for changes. The International Chamber of Commerce and the Canadian Bar Association are calling for the ICSID convention to be adopted across the country. The chamber of commerce’s national committee, the Toronto Commercial Arbitration Society, and the Western Canada Arbitrators RoundTable have also banded together and are urging the federal government to adopt changes to the UNCITRAL Model Law on Arbitration that were introduced in 2006 and are now the focus of adoption and implementation by a number of other countries.

Gerry Ghikas, the Vancouver-based chairman of the international trade and arbitration group of Borden Ladner Gervais LLP and current chairman of the arbitration committee of the Canadian Chamber of Commerce, says the initial reception by government to his group’s request has been encouraging. “It is early days but it is very positive. Certainly the federal government was all over it in terms of being aware of it. The provincial governments were less on top of the issue but very receptive to the idea that we have to make sure that our international arbitration legislation is current and serving the purpose.”

Ghikas, who is heading up a task force pushing for adoption of the changes to the model law, says the issue would be tackled by the Uniform Law Conference of Canada at its regular meeting in August. The ULC has a mandate to harmonize the laws of the provinces and territories of Canada and, where appropriate, federal laws. “I think we now have this issue front and centre at the Uniform Law Conference and my hope is that they will designate it as a project and they and we can work together to start to come up with some draft changes to the legislation.”

In May, France, which, like Canada, was one of the early adopters of UNICTRAL’s Model Law in 1985 and is one of the most pro-arbitration venues internationally, implemented changes to its arbitration legislation intended to incorporate changes to arbitration law and doctrine over the past 30 years and make its law more accessible to non-specialists and practitioners outside of the country. Paris is aggressively marketed as an arbitration destination, touted in a recent brochure as “the home of international arbitration” that for more than a century “has hosted many thousands of international arbitrations, many of which have no links with France.” Other cities such as New York and London are getting the glossy brochure promotional treatment. Miami is touting itself as “an international arbitration centre for the Americas and beyond.”

Keeping pace with such marketing efforts, even if Canadian cities can’t make the advertising budgets of the likes of New York, London, and Paris, needs to be done by the Canadian arbitration centres, says Earl Cherniak, a partner with Lerners LLP and chairman of the Toronto Commercial Arbitration Society. “We haven’t been doing enough to get the word out to the users around the world of commercial arbitration of the advantages of Canada in general and Toronto in particular,” he says. “In terms of our legal system, in terms of the number and experience and seniority and capability of our arbitrators, of our arbitration bar, of the links our arbitration bar has with the commercial court, how Canada and Ontario in particular are arbitration-friendly centres. The important thing for international commercial arbitration is to get the word out.”

  • RE: Getting the word out

    John G
    Nice overview. However, though Canada was the first country to implement the UNCITRAL Model Law on International Commercial Arbitration, as the article says, it was far from the first to implement the New York Convention. The Ccnvention had been around for nearly 30 years when Canada signed on in 1986. Part of the delay was the relative lack of interest in (international) arbitration before the 80s, and part the difficulty of getting implementation in all the provinces and territories, since the Convention did not permit (as newer ones do) piecemeal implementation. To some extent the ICSID Convention faces the latter challenge today.
  • Partner, International Aribtration Group, Perley-Robertson, Hill & McDougall LLP

    Barry Leon
    [quote name="John G"]Nice overview. However, though Canada was the first country to implement the UNCITRAL Model Law on International Commercial Arbitration, as the article says, it was far from the first to implement the New York Convention. The Ccnvention had been around for nearly 30 years when Canada signed on in 1986. Part of the delay was the relative lack of interest in (international) arbitration before the 80s, and part the difficulty of getting implementation in all the provinces and territories, since the Convention did not permit (as newer ones do) piecemeal implementation. To some extent the ICSID Convention faces the latter challenge today."
    John: Agreed. More governments and busineses in Canada need to realize that ICSID ratification would benefit Canada economically (more attractive to invest her) and Canada's international investors. Those dragging their heals should "wake up and smell the coffee", as the saying goes. Barry

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