British Columbia is now the second Canadian province to modernize its international arbitration legislation by adopting the 2006 amendments to the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). On May 17, 2018 British Columbia amended its International Commercial Arbitration Act, RBC 1996, c.233 (“ICAA”) via the International Commercial Arbitration Amendment Act. As we reported last year, Ontario updated its International Commercial Arbitration Act in March 2017 (cf. GAN: Ontario introduces new international arbitration legislation).
The amendments enhance British Columbia’s standing as an arbitration-friendly jurisdiction, and aim to position British Columbia, and Vancouver in particular, as an arbitration destination for commercial disputes. The province is one of 25 jurisdictions worldwide to have updated its legislation. Whereas Ontario attached the Model Law as a schedule to the ICCA, British Columbia incorporated the 2006 Model Law amendments along with other developments into the legislation, highlighted below. When selecting a Canadian seat of arbitration it is important to take note of the differences in international commercial arbitration legislation among the various provinces.
Key Features of the Amended ICAA
A broader definition of “arbitration agreement”
Under the ICAA, an arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means. Also, an agreement to arbitrate may be recorded by electronic communication as long as it can be subsequently accessed.
A higher threshold to challenge an arbitrator
The new legislation will make it more difficult to challenge an arbitrator. An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to the arbitrator’s independence or impartiality, or the arbitrator does not possess the qualifications agreed to by the parties, which is language taken from the Model Law. However, the ICAA adds that “there are justifiable doubts as to the arbitrator’s independence or impartiality only if there is a real danger of bias on the part of the arbitrator in conducting the arbitration”. This is a higher threshold than the traditional test for bias under Canadian law, which is whether a reasonable apprehension of bias exists.
An arbitration that is private and confidential by default
Arbitrations seated in British Columbia will be private and confidential unless agreed otherwise by the parties. This includes the arbitration agreement, the proceedings, evidence, and documents and information relating to the arbitration that is not otherwise in the public domain.
A tribunal’s powers to grant interim measures and preliminary orders are broad and well articulated
A tribunal has broad powers under the ICAA to grant interim measures and preliminary orders. The ICAA details the powers and conditions to grant such orders as well as recognition and enforcement of interim measures. The ICAA also sets out a specific regime for preliminary orders.
Under the ICAA, an interim measure is any temporary measure that maintains or restores the status quo, prevents imminent harm or prejudice to the arbitral process, preserves assets or evidence, or provides security for costs in connection with the proceedings. A tribunal can also issue preliminary orders directing a party not to frustrate the purpose of the interim measure requested.
Third party funding won’t hinder recognition and enforcement of an award
With respect to recognizing and enforcing an international arbitration award, the ICAA confirms that third party funding for an arbitration is not contrary to the public policy in British Columbia. That provision should prevent any argument that an award should not be enforced because a party used third party funding in the arbitration.
Parties may be represented in an arbitration by foreign counsel
The ICAA confirms that a party may be represented in arbitral proceedings by any person of that party’s choice, including (but not limited to) a legal practitioner from another state.