The Enforcement of International Commercial Arbitration Agreements in Canada

Abstract

PRIOR TO 1980, lawyers with experience and understanding of the law and culture of international commercial arbitration were few and far between, usually found only in London, Paris, Geneva and New York. In Canada, there was a handful distributed between Toronto, Montreal, Calgary and Vancouver. This led to poorly-drafted agreements to arbitrate and uninformed arguments in support of enforcing such agreements before Canadian judges. These judges were similarly handicapped. This article will attempt to review what has led up to what I call the ‘big bang’ in arbitration in Canada, its effect, some problematic areas, and suggestions how we might deal with them, along with a few examples of how some of our common law trading partners manage their recognition of international commercial arbitration agreements. As part of a flurry of legislation dealing with commercial law in the late nineteenth century, the English Arbitration Act 18891 was passed into law. It did away with the requirement to obtain a rule in the courts to enforce an arbitration agreement and substituted the principle that a private agreement to arbitrate was irrevocable, without the need for any order of the court. Further, the agreement was deemed to operate as a court order and to include such provisions as assuming a single arbitrator, providing for umpires, giving arbitrators the power to summon witnesses and examine them on oath, giving the arbitrators power to award costs, and making awards final. However, the courts took it upon themselves to supervise closely this private dispute resolution mechanism agreed by the parties. Canadian jurisdictions followed the English legislation either by passing enactments mirroring the 1889 Act, or indirectly through legislation adopting English statute law where no inconsistent domestic enactment existed. There was no federal arbitration legislation until 1986, and Quebec continued to refuse to recognize agreements …