Executive Summary: Key Legal and Evidentiary Issues

• The dispute centered on whether AIMCo contracted in its own right or solely as an agent for Alberta, impacting Alberta’s status in the arbitration.

• AIMCo’s statutory designation as an agent of the Crown “for all purposes” meant it could only act on behalf of Alberta under the AIMCo Act.

• Alberta’s non-signature on the investment management agreements did not preclude it from being a party due to its principal-agent relationship with AIMCo.

• The application was a procedural, de novo hearing under s. 17(9) of the Arbitration Act and did not address the merits of liability for investment losses.

• The Court rejected the Funds’ request for partial-indemnity costs due to insufficient evidence on the reasonableness of the legal fees claimed.

• Schedule C costs under Column 5 with a 1.25x multiplier for inflation were awarded, totaling $27,512.37 including disbursements.

Facts of the case

LAPP Corporation, SFPP Corporation, and PSPP Corporation—administrators and trustees of three Alberta public pension plans—applied to the Court of King’s Bench to add His Majesty the King in right of Alberta (Alberta) as a party to an arbitration between the pension plans and Alberta Investment Management Corporation (AIMCo) over alleged investment losses of approximately $1,333,500,000.

The pension plans argued that Alberta was a party to the investment management agreements (IMAs) because AIMCo was a statutory agent of the Crown and could only act on behalf of Alberta. Alberta contended that AIMCo contracted in its own right and was the only party to the IMAs.

Decision in 2023 ABKB 566

Justice M.J. Lema held that AIMCo was, by statute, an agent of the Crown “for all purposes” and could “exercise its powers and perform its duties and functions only as an agent of the Crown in right of Alberta” under s. 3(1) of the Alberta Investment Management Corporation Act.

He concluded that AIMCo necessarily entered into the IMAs as Alberta’s agent. Therefore, Alberta was a party to the contracts and bound by their arbitration provisions. The Court ordered that the arbitration proceed with the Funds, AIMCo, and Alberta as parties.

Justice Lema emphasized that Alberta’s absence as a signatory did not negate its legal status as a party, since AIMCo had no statutory authority to act independently. He found no basis in statute or case law supporting Alberta’s position that AIMCo acted “in its own right”.

Relevant policy terms and clauses

Alberta relied on s. 14.2 of the IMAs, which states the agreements are for the exclusive benefit of the parties and disclaim obligations to or benefits for any person other than a party. The Court ruled this clause could not displace Alberta’s contractual status because AIMCo’s statutory role meant it was contracting solely on Alberta’s behalf.

Costs decision in 2025 ABKB 33

Following the success of the Funds’ application, a separate decision was issued on January 20, 2025, addressing costs. The Funds sought costs of $190,576.29, representing half of their actual legal fees ($185,893.48) plus disbursements of $4,682.81. Alternatively, they sought Schedule C costs of $170,905.81, based on Column 5 with a 5x multiplier.

Justice Lema rejected the claim for partial-indemnity costs, citing the Funds’ failure to provide detailed billing records or sufficient justification for the claimed fees. He also found that the matter was procedural, not complex or novel, and that no litigation misconduct occurred.

Alberta proposed costs of $27,512.37 based on Schedule C, Column 5, with a 1.25x multiplier for inflation and disbursements of $1,524.87. This was accepted by the Court as reasonable and proportionate.

Outcome

• The Court ruled Alberta was a party to the IMAs and subject to arbitration due to AIMCo’s statutory role as its agent.

• The arbitration was ordered to proceed with all three parties: the Funds, AIMCo, and Alberta.

• The Funds were awarded Schedule C costs of $27,512.37 rather than partial indemnity or enhanced costs.