Consensual Arbitration in Quebec
By Frédéric Bachand
I. Fundamental Principles
A. Nature and Attributes of Consensual Arbitration
Dell Computer Corporation v Union des consommateurs (Supreme Court of Canada, 2007): arbitration is a legal institution without a forum and without a geographic basis; Art. 940.6 of the Code of Civil Procedure attaches considerable interpretive weight to the Model Law in international arbitration cases.
Condominiums Mont St-Sauveur c Construction Serge Sauvé (Court of Appeal of Quebec, 1990) an arbitral tribunal is a private adjudicative body and is thus separate from the public judicial system.
Laurentienne-vie(La), compagnie d'assurance Inc c Empire (L'), compagnie d'assurance-vie (Court of Appeal of Quebec, 2000): resort to arbitration is a fundamental right and constitutes an expression of the parties' contractual freedom.
Sport Maska Inc. Zittrer (Supreme Court of Canada, 1988): notion of arbitration and distinction between arbitration and expert opinion.
Conseil d'arbitrage des comptes des avocats du Barreau du Québec c. Marquis (Court of Appeal of Quebec, 2011): the arbitration of accounts provided for in article 88 of the Professional Code is a consenual arbitration, not a statutory arbitration.
Construction Réal Landry inc. c. Rae (Court of Appeal of Quebec, 2011): an award rendered by a tribunal constituted pursuant to the Regulation Respecting the Guarantee Plan for New Residential Buildings may be set aside if it contains an unreasonable error within the meaning of the Dunsmuir case.
Turgeon c. Groupe Platinum Construction 2011 Inc. (Superior Court of Quebec, 2012): In a judgment holding that a tribunal constituted pursuant to the Regulation Respecting the Guarantee Plan for New Residential Buildings is a consensual tribunal, the Court refuses to homologate an award on the ground that the tribunal had lost jurisdiction after the plaintiff had discontinued its claim.
B. Sources and Principles of Interpretation
Condominiums Mont St-Sauveur c Construction Serge Sauvé (Court of Appeal of Quebec, 1990): the reform of 1986 has metamorphosed Quebec consensual arbitration law.
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): Quebec rules relating to consensual arbitration must be interpreted in light of the legislature's desire to promote this extra-judicial means of dispute resolution.
Coderre c. Coderre (Court of Appeal of Quebec, 2008): Even in domestic cases Courts can look to the UNCITRAL Model Law on International Commercial Arbitration to interpret the provisions of the Code of Civil Procedure.
Rhéaume c. Société d'investissements L'Excellence Inc.(Court of Appeal of Quebec, 2010): consideration of international and foreign sources in a domestic arbitration.
GreCon Dimter Inc. v. J.R. Normand Inc. (Supreme Court of Canada, 2005): Quebec arbitration law "must necessarily be harmonized" with the New York Convention and the interpretation given thereto by courts of other jurisdictions.
Holding Tusculum B.V. v. S.A. Louis Dreyfus & Cie (Superior Court of Quebec, 2006): in the context of an application seeking the annulment of an international award, the Court rules that expert evidence purporting to opine on international arbitration laws and customs was admissible.
C. Federalism
Compania Maritima Villa Niva S.A. v. Northern Sales Co. (Court of Appeal of Quebec, 1991):extent of the Federal Parliament's legislative jurisdiction over consensual arbitration.
II. Arbitration Agreement
A. Validity From a Contractual Standpoint
Zodiak International Productions Inc. v. Polish People's Republic (Supreme Court of Canada, 1983): to be valid under Quebec law, an undertaking to arbitrate has to be evidenced in writing and has to mention explicitly that the arbitration process envisaged is mandatory, final and binding.
Investissement Charlevoix inc. c. Gestion Pierre Gingras inc. (Court of Appeal of Quebec, 2010): an arbitration clause which does not expressly mention the final and binding nature of the award may nevertheless constitute a "perfect" undertaking to arbitrate.
Achilles (USA) c. Plastics Dura Plastics (1977) Ltée/Ltd. (Court of Appeal of Quebec, 2006): seized of a motion seeking to refer to arbitration an action relating to an international commercial dispute, the Court of Appeal finds that there is no reason to apply to an arbitration clause found in the general terms and conditions of a distance sales contract more stringent rules with respect to knowledge and ratification than those applicable to other contractual terms; consent to arbitration is not subject to special or distinctive form requirements.
9110-9595 Québec Inc. c. Bergeron (Court of Appeal of Quebec, 2007): the Court finds invalid an arbitration clause inserted in a contract of adhesion and refering to arbitration rules that were not brought to the attention of the adhering party at the time of formation of the contract.
Dell Computer Corporation v Union des consommateurs (Supreme Court of Canada, 2007): the arbitration clause set out in terms and conditions found on Dell's website was part of the contract concluded by the consumers, despite that only a hyperlink pointing to those terms and conditions—rather than the full text thereof—was brought to the consumers' attention whey they placed their orders.
B. Arbitrability of Disputes
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): there are few limits to the arbitrability of disputes and statutory provisions will only be interpreted as excluding arbitration if they contain explicit language to that effect; the scope of the arbitration agreement and the arbitrators' mission have to be interpreted in a broad and liberal manner.
Dell Computer Corporation v Union des consommateurs (Supreme Court of Canada, 2007): Art. 3149 of the Civil Code of Quebec has no impact on the effectiveness of the arbitration clause where the legal situation of the parties has no foreign element; absent clear legislation to the contrary, arbitration clauses inserted in consumer contracts should be enforced like other arbitration clauses; absent clear legislation to the contrary, the right to commence a class action is not a public order right and can thus be waived, even through a pre-dispute arbitration clause; Sec. 11.1 of the Consumer Protection Act, which prohibits any stipulation obliging a consumer to refer a dispute to arbitration, does not apply retroactively.
Acier Leroux c. Tremblay (Court of Appeal of Quebec, 2004): oppression claims based on Sec. 241 of the Canada Business Corporation Act are arbitrable.
Investissement Charlevoix Inc. c. Gestion Pierre Gingras Inc. (Court of Appeal of Quebec, 2010): disputes concerning the winding-up of companies are inarbitrable, not because they constitute matters of public order within the meaning of Art. 2639 of the Civil Code of Quebec, but rather because the jurisdiction conferred on the Superior Court by the Winding-Up Act is exclusive
Dans l'affaire de la faillite de: Experts en traitement de l'information (E.T.I.) Montreal Inc. (Court of Appeal of Quebec, 2005): Sec 183(1.1) of the Bankruptcy and Insolvency Act and the principle tending to confer to a single forum an exclusive jurisdiction to deal with all matters connected to a bankruptcy do not affect the bindingness of an arbitration clause inserted in a contract concluded by the trustee to the bankruptcy.
Carboni c. Financière Banque nationale (Superior Court of Quebec, 2004):disputes relating to the Securities Act are arbitrable.
Le Guillou c Filiatrault (Superior Court of Quebec, 2007): Sec. 11.1 of the Consumer Protection Act is applicable to a dispute which arose after its entry into force, including where the dispute relates to a consumer contract concluded before its entry into force.
H.A. Grétry Inc. c. 9065-3627 Québec Inc. (Court of Appeal of Quebec, 2009): the annulment of a notarial act through improbation is a matter "of public order" within the meaning of Art. 2639 of the Civil Code of Quebec and is thus inarbitrable.
C. Referral of Court Action to Arbitration
Dell Computer Corporation v Union des consommateurs (Supreme Court of Canada, 2007): because jurisdictional objections should generally be first dealt with by the arbitral tribunal, a judge seized of a motion seeking to refer an action to arbitration should normally refrain from reviewing the arbitration agreement's effectiveness.
GreCon Dimter Inc. v. J.R. Normand Inc. (Supreme Court of Canada, 2005): the Court reverses the Guns N' Roses case and confirms the bindingness of international arbitration agreements invoked in the context of incidental warranty proceedings.
Dominion Bridge c. Knai (Court of Appeal of Quebec, 1997): a party may implicitly waive its right to resort to arbitration by taking certain steps in judicial proceedings.
Poupart c. Société Nationale Compagnie d'assurance (Court of Appeal of Quebec, 2006): confirming the referral of an action to arbitration, the Court concludes that by taking part in the arbitration, the plaintiff had waived the right to invoke the nullity of the arbitration clause on the grounds that it was an external clause (Art. 1435 of the Civil Code of Quebec) and/or an abusive clause (Art. 1437 of the Civil Code of Quebec).
Corporation Inno-Centre du Québec c. Média Opti Rythmix (Court of Quebec, 2012): a defendant may rely on a med-arb clause to seek the referral of an action to arbitration despite that no mediation has occurred between the parties.
D. Interpretation of Arbitration Agreement
Laurentienne-vie(La), compagnie d'assurance Inc c Empire (L'), compagnie d'assurance-vie (Court of Appeal of Quebec, 2000): an arbitration agreement has to be interpreted in a broad and liberal manner.
Purkinje c. Famic Technologies Inc. (Court of Appeal of Quebec, 2009): while confirming a decision of the Superior Court dismissing a motion seeking the annulment of an arbitral award, the Court of Appeal renders a decision which is very favourable to the autonomy of the arbitral process and which reiterates, inter alia, that the scope of arbitration agreements must be interpreted in a liberal manner.
E. Transmission of the Arbitration Agreement
PS Here, LLC c. Fortalis Anstalt (Court of Appeal of Quebec, 2009):an undertaking to arbitrate is an accessory to the claim, which entails that such an undertaking is applicable to the assignee of the claim.
F. Effect of the Arbitration Agreement in a Multi-Party Context
Concordia Project Management Ltd. c. Décarel Inc. (Court of Appeal of Quebec, 1996):in certain circumstances, the shareholders and the managers of a company bound by an arbitration agreement may also be referred to arbitration.
Société de cogénération de St-Félicien, société en commandite/St-Felicien Cogeneration Limited Partnership c. Industries Falmec Inc. (Court of Appeal of Quebec, 2005): the Court gives effect to an arbitration clause invoked against an incidental action in warranty but reiterates that judges have a discretionary power to refuse to give effect to -- or to extend the scope of -- arbitration agreements in a multiparty context.
III. Arbitral Tribunal
Desbois c Industries A.C. Davie Inc. (Court of Appeal of Quebec, 1990): the requirements of independence and impartiality imposed on all arbitrators are of public order.
Zittrer c. Sport Maska Inc. (Court of Appeal of Quebec, 1985): like any judge, the arbitrator cannot be held liable for the consequences of the acts he or she carries out while accomplishing his or her duties, unless such acts fall outside the jurisdiction of the arbitrator and were done in bad faith.
IV. Arbitral Procedure
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): parties may agree in advance to resort to an arbitral process which excludes testimonial evidence.
Purkinje c. Famic Technologies Inc. (Court of Appeal of Quebec, 2009): while confirming a decision of the Superior Court dismissing a motion seeking the annulment of an arbitral award, the Court of Appeal renders a decision which is very favourable to the autonomy of the arbitral process and which confirms that the management of the evidence and the procedure is to be left to the parties and the arbitral tribunal.
Compagnie Nationale Air France c. MBaye (Court of Appeal of Quebec, 2003): the adoption by the parties of pre-existing arbitration rules renders inoperative all non-mandatory provisions of Title 1 of Book VII of the Code of Civil Procedure, namely all the provisions that are not specifically mentioned in Art. 940.
Rhéaume c. Société d'investissements L'Excellence Inc. (Court of Appeal of Quebec, 2010): scope of the arbitrators' duty to maintain the secrecy of their deliberations and absence under Quebec law of any inherent duty of confidentiality attaching to the arbitral process.
Nearctic Nickel Mines Inc. c. Canadian Royalties Inc. (Court of Appeal of Quebec, 2012): an arbitral tribunal may make orders of specific performance that do not amount to injunctions; an arbitral tribunal may grant provisional measures even where the parties’ agreement is silent on the issue.
Lachapelle Pontiac Buick GMC ltée c. General Motors du Canada ltée (Superior Court of Quebec, 2010): the Court refuses to give effect to a CAMVAP arbitration clause after having concluded, inter alia, that consensual arbitral tribunals do not have the power to grant injunctive relief.
Dubois & Frères ltée c. General Motors du Canada ltée (Superior Court of Quebec, 2010): the Court refers the action to arbitration after having concluded that the arbitral tribunal has the power to render interlocutory injunctions, as the parties' contract so provides; this power is exclusive, the parties having waived the possibility of court intervention based on Art. 940.4 of the Code of Civil Procedure.
V. Court Intervention Prior to and During the Arbitral Proceedings
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): an arbitral tribunal is not subject to the superintending and reforming power of the Quebec Superior Court.
Compagnie Nationale Air France c. MBaye (Court of Appeal of Quebec, 2003): courts can only intervene during the arbitral proceeding in cases provided for in Title 1 of Book VII of the Code of Civil Procedure.
Microtec Sécuri-T Inc. c. Centre d'arbitrage commercial national et international du Québec (Court of Appeal of Quebec, 2003):decisions rendered by an arbitral institution cannot be challenged in court while arbitration proceedings are ongoing.
Dens Tech – Dens KG c. Netdent-Technologies Inc. (Court of Appeal of Quebec, 2008): in an international commercial arbitration case, the Court of Appeal grants a motion to dismiss a motion seeking a declaratory judgment to the effect that a notice of arbitration was null.
Endorecherche inc. c. Université Laval (Superior Court of Quebec, 2010): while reiterating that the courts' intervention during an arbitration ought to be limited, the Court of Appeal suggests that an order of the arbitral tribunal relating to the communication of documents is an award subject to annulment proceedings.
Joli-Coeur c. Joli-Coeur Lacasse Avocats, s.e.n.c.r.l. (Court of Appeal of Quebec, 2011): the provisional measures alluded to in Art. 940.4 of the Code of Civil Procedure include not only the measures provided for in Title 1 of Book V (judicial sequestration, seizures before judgment, injunctions), but also safeguard orders that can be ordered pursuant to Art. 46.
Re/Max Platine inc. c. Groupe Sutton-Actuel inc. (Court of Appeal of Quebec, 2008): Art. 943.1 of the Code of Civil Procedure allows courts to review a decision in which an arbitral tribunal denied jurisdiction.
Lac d'amiante du Canada Ltée c. Lac d'amiante du Québec Ltée (Court of Appeal of Quebec, 1999):a judge may grant an injunction enjoining a party to put an end to a foreign arbitral proceeding.
Jefagro Technologies inc. c. Vetagro, s.p.a. (Superior Court of Quebec, 2012): in a case relating to an international commercial dispute, the Court finds that it has no jurisdiction to issue a provisional injunction in support of an arbitration seated in a foreign jurisdiction.
VI. Amiable Composition
Coderre c. Coderre (Court of Appeal of Quebec, 1980): in a thoroughly reasoned decision in which it shows a willingness to consider the UNCITRAL Model Law in a purely domestic context, the Court of Appeal rules that an amiable compositeur must resolve the dispute in accordance with the provisions on the contract in which the arbitration clause is inserted, unless the parties have explicitly agreed otherwise.
VII. Arbitral Award
A. Notion of Arbitral Award
The Gazette c Blondin (Court of Appeal of Quebec, 2003):notions of arbitral award and procedural orders.
Endorecherche inc. c. Université Laval (Superior Court of Quebec, 2010): while reiterating that the courts' intervention during an arbitration ought to be limited, the Court of Appeal's decision suggests that an order of the arbitral tribunal relating to the communication of documents is an award subject to annulment proceedings.
B. Object of the Courts' Review of Arbitral Awards
H.A. Gétry Inc. c. 9065-3627 Québec Inc. (Court of Appeal of Quebec, 2009): the homologation of an arbitral award concerns its operative part, not the reasons contained therein.
C. No Review of the Merits of Arbitral Awards
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): reviewing the merits of arbitral award is prohibited as a matter of principle.
The Gazette c Blondin (Court of Appeal of Quebec, 2003): prohibition on judicial review of the merits of an arbitral award; exhaustive nature of the grounds of judicial review set out in Art. 946.4 of the Code of Civil Procedure.
Gingras c. Entreprises FGC Inc. (Court of Appeal of Quebec, 2006): while denying leave to appeal from a decision of the Superior Court dismissing a motion seeking the judicial review of an arbitral award, the Court states that the patently unreasonable application of law or precedents by the tribunal is not a ground upon which an award can be annulled.
D. Review of Award's Compliance with the Provisions of the Contract
Nearctic Nickel Mines Inc. c. Canadian Royalties Inc. (Court of Appeal of Quebec, 2012): the Court of Appeal suggests that an arbitral award may be annulled if the tribunal deliberately ignored the provisions of the contract, interpreted such provisions in an unreasonable manner or failed to follow the rules governing the interpretation of contracts.
E. Review of the Award's Compliance With Public Order
Desputeaux v Éditions Chouette (1987) Inc. (Supreme Court of Canada, 2003): an error in interpreting a mandatory statutory provision would not provide a basis for annulling the award as a violation of public order, unless the outcome of the arbitration was in conflict with fundamental principles of public order.
Laurentienne-vie(La), compagnie d'assurance Inc c Empire (L'), compagnie d'assurance-vie (Court of Appeal of Quebec, 2000):the fact that the arbitral tribunal did not follow Court of Appeal precedents on the interpretation to be given to public order provisions does not necessarily entail that the award is contrary to public order.
Smart Systems Technologies Inc. c. Domotique Secant Inc. (Court of Appeal of Quebec, 2008): (i) Art. 950 of the C.C.P. refers to public order as understood in international relations; (ii) it would be contrary to such public order to homologate in Quebec an award which--contrary to the parties' intention--is unreasoned.
F. Review of the Process's Compliance With Applicable Rules of Arbitral Procedure
Rhéaume c. Société d'investissements L'Excellence Inc. (Court of Appeal of Quebec, 2010): not all violation of the applicable rules of procedure will vitiate the award.
G. Jura Novit Curia
Superior Energy Management, a Division of Superior Plus Inc. c. Manson Insulation Inc (Superior Court of Quebec, 2011): an arbitral tribunal—being in full control of legal issues—may decide the case on the basis of a different legal reasoning than those invoked by the parties, provided that such reasoning finds support in the evidence in the record.
H. Reasoning of the Award
Superior Energy Management, a Division of Superior Plus Inc. c. Manson Insulation Inc (Superior Court of Quebec, 2003): an arbitral tribunal is not required to address in its award each item of evidence, or is it required to address in its award all arguments made by the parties.
I. Other Procedural Aspects of the Judicial Review of Awards
Smart Systems Technologies Inc. c. Domotique Secant Inc. (Court of Appeal of Quebec, 2008): a party may object to homologation in Quebec even if it has failed to challenge the legality of the award before the courts of the seat of arbitration.
Turenne c. Carignan (Court of Appeal of Quebec, 2012): a party who fails to seek the annulment of an arbitral award within the mandatory time limit of three months provided for in Art. 947.4 of the Code of Civil Procedure cannot subsequently invoke Art. 946.4 to resist the homologation of that same award.
Compagnie d'assurance Standard Life c. Fagan (Court of Appeal of Quebec, 2004):(appeal withdrawn after Supreme Court of Canada granted leave to appeal) in order to ensure the finality of arbitral awards, the three-month period within which an application to set aside the award may be made is mandatory.
Transport Michel Vaillancourt inc. c. Cormier (Superior Court of Quebec, 2006): the prescription applicable to a motion seeking the homologation of an arbitral award is ten years.
Les Viandes du Breton Inc. c. Ville de Notre-Dame-du-Lac (Court of Appeal of Quebec, 2006); Syndicat canadien des communications, de l'énergie et du papier (SCEP), section locale 145 c. Gazette (The), une division de Southam Inc. (Court of Appeal of Quebec, 2006): leave is always required to appeal (i) a judgment ruling on a motion seeking the homologation of an arbitral award, or (ii) a judgment ruling on a motion seeking the annulment of an award containing orders directed at a party or conclusions regarding the parties' rights, because both are judgments "rendered in matters concerning execution" within the meaning of sub-section (3) of the second paragraph of Art. 26 of the Code of Civil Procedure; a judgment ruling on a motion seeking the annulment of an arbitral award that dismissed the claim—and that thus does not contain orders directed at a party or conclusions regarding the parties' rights—is a "final judgment" within the meaning of Art. 26 and can therefore be appealed without leave if the value of the object of the dispute submitted to arbitration was at least $50,000.