Originally from Arbitration Law of Canada: Practice and Procedure, Fourth Edition

PREVIEW

2.1          INTRODUCTION

The legislation governing arbitration in Canada is found almost exclusively in the specific arbitration legislation of the provinces, territories and federal government. Those statutes all provide that the courts have no jurisdiction respecting arbitration unless specifically set out in the respective statutes. Further the Supreme Court of Canada has made it clear that general legislation does not apply to private arbitrations unless the legislation specifically says so.  As an example, legislation permitting courts to grant certain remedies does not mean an arbitrator is excluded from granting the same remedy. Arbitration is essentially a private process with the parties deciding what powers to grant the arbitrator. Limits on an arbitrator’s jurisdiction must be specifically stated in the legislation.  Further, legislation and rules dealing with court procedure have no application to private arbitration proceedings unless specifically mandated by the legislation or the parties.

The former arbitration legislation in common law Canada was based on the English Arbitration Act, 1889 and made no distinction between domestic or international arbitrations. The transformation to the modern legislative regime in Canada started at the United Nations in the late 1950s.

2.1.1. The International Regimes

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention),  was adopted at a United Nations diplomatic conference on June 10, 1958 and entered into force on June 7, 1959. The New York Convention is arguably the most successful international treaty ever promulgated by the United Nations and is considered the foundational instrument for international arbitration. As of this writing, there are 165 Contracting States.  The New York Convention has two purposes: It requires a State in which a legal action is brought to refer the parties to arbitration if there is a valid arbitration agreement and second, subject to very limited exceptions, it requires a State to enforce a foreign arbitral award as a judgment of the State’s courts. 

In 1985, Canada’s federal government implemented the New York Convention through the United Nations Foreign Arbitral Awards Convention Act.  Thereafter, the provinces passed legislation to implement the New York Convention as detailed below.

Another key instrument in the field of international arbitration is the Model Law on International Commercial Arbitration  (known as the Model Law), adopted by the United Nations Commission on International Trade Law (UNCITRAL) on June 21, 1985. The creation of the Model Law came from the desire to foster certainty in international business and to recognize arbitration as a forum for the settlement of international commercial disputes distinct from any domestic court system.  The Model Law limits court involvement to an absolute minimum and provides for no right of appeal from an arbitral award. The Model Law is not binding in and of itself, but serves as a template for a State wishing to pass modern arbitration legislation.