Parties agreed to resolve disputes via National Feed and Grain Association’s Arbitration Rules
The Saskatchewan Court of Appeal has upheld the recognition and enforcement of a foreign arbitral award that arose from the appellant’s default on a contract for the respondent’s purchase of 226.8 metric tonnes of canola from him.
The Jan. 5, 2021, contract provided that the appellant in Welter v Parrish & Heimbecker Ltd., 2026 SKCA 62, would deliver the canola to the respondent by Sept. 30, 2021. Under art. 12, the parties would arbitrate any dispute under the National Feed and Grain Association’s Arbitration Rules (NFGA rules).
The appellant failed to deliver the canola by the agreed date. After notifying the appellant of his default, the respondent brought an arbitration complaint before the NFGA under its rules.
A NFGA representative gave the appellant a copy of the NFGA rules and an arbitration services contract and asked him to sign and return the agreement. The appellant failed to respond to the complaint or execute the arbitration services contract, even though he said he would.
On Aug. 19, 2022, the NFGA granted the respondent a default award against the appellant pursuant to its rules.
Before the Saskatchewan Court of King’s Bench, the respondent applied to recognize and enforce the foreign arbitral award as a judgment of the Saskatchewan court under the province’s Enforcement of Foreign Arbitral Awards Act, 1986 (EFAA).
Opposing the application, the appellant alleged that the contract was unconscionable and that recognizing and enforcing the award would go against public policy.
On Feb. 3, 2025, a chambers judge of the Court of King’s Bench allowed the respondent’s application upon rejecting the appellant’s arguments.
On appeal, the appellant argued that the judge made various errors and that the award breached the statutory requirements for recognition and enforcement.
Recognition of award upheld
The Court of Appeal for Saskatchewan dismissed the appeal and ordered the appellant to pay the respondent’s appeal costs of $2,000.
The appeal court ruled that the chambers judge identified and applied the pertinent legal principles to the facts and properly recognized and enforced the award under the EFAA.
Upon addressing the merits of the appellant’s submissions, including his new arguments on appeal, the appeal court held that the judge did not commit any reviewable error in his approach or fail to consider any issues concerning notice or procedural fairness.
First, the appeal court saw no procedural unfairness in the entry of the default award and no reason to question the award’s legitimacy or enforceability.
The appeal court found no error in the judge’s conclusions that the appellant received the appropriate notice of the arbitration proceeding and failed to engage meaningfully in the process to which he consented in his contract with the respondent.
The appeal court noted that the appellant did not apply to vacate the default award under r. 2(E), as specified in the NFGA’s reasons for the award, and did not dispute the award until the respondent’s application for its enforcement.
Second, the appeal court considered the administratively entered default award valid. The appeal court saw no deficiency in the evidence regarding the award’s manner of issuance or its propriety under the NFGA rules.
The appeal court pointed out that the appellant:
- agreed that the NFGA rules applied to the arbitration of his dispute with the respondent
- should have provided the required response to the arbitration complaint, without which the NFGA could administratively render a default award under its rules before even constituting a tribunal
Third, the appeal court found no fundamental uncertainty or ambiguity in the contractual terms between the parties or in their arbitration agreement under the NFGA rules, which only required the signing of an arbitration services contract as a formality to facilitate the arbitral process.
The appeal court noted that the appellant, who consented to the applicability of the NFGA rules, could not later argue that the contract included an unenforceable agreement to agree to future terms through the arbitration services contract.
Fourth, the appeal court saw no lack of neutrality and no bias against the appellant’s interests that would infect the process under the NFGA rules.
Fifth, the appeal court determined that the award complied with the statutory prerequisites for recognition and enforcement.
The appeal court held that the appellant failed to show any reason or exception under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the UNCITRAL Model Law on International Commercial Arbitration, such that the judge should have refrained from enforcing the award.
