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

PREVIEW

4.1     RULES REGARDING COMMENCEMENT

Prior to commencing an arbitration, consideration must be given to what procedural rules apply. If the arbitration is to take place in Canada, then absent an agreement between the parties, the applicable domestic or international Act will apply. Before the arbitration commences, it is important to determine whether it is governed by a province’s domestic or international Act. The law of the contract does not determine the procedural rules or procedural law of the arbitration. The procedural law is the arbitration law at the place or seat of the arbitration. Local court rules have no application to the procedure of the arbitration unless the parties have expressly agreed or the arbitration legislation of the province so mandates. If the parties have agreed to a set of procedural rules or have chosen an institution to administer the arbitration then those rules will apply, subject to any mandatory arbitration law at the place of arbitration.

One must follow whatever rules are applicable for the proper commencement of the arbitration. In the case Bell Canada v. The Plan Group,  the arbitration agreement provided that the notice of arbitration was to be filed in accordance with the rules of the ADR Institute of Ontario. A further clause provided that failure to file a notice of arbitration within 12 months after the occurrences complained of would constitute an irrevocable waiver of that claim. The claimant served its notice of arbitration on the respondent but failed to file a copy with the Institute in a timely manner. The Ontario Court Appeal held that the arbitration had not been commenced within 12 months as the requirement of filing the notice with the Institute under its rules had not been complied with. The failure to comply with the requirement of filing the notice of arbitration at all with the ADR Institute was a matter of substance and not merely an irregularity that could be cured.

The question to ask is, is the defect so serious that it renders a notice to arbitrate a nullity? In South Coast British Columbia Transportation Authority v. BMT Fleet Technology Ltd. , the claimant had issued one notice of arbitration through the British Columbia International Commercial Arbitration Centre that named four separate Respondents, each of which had a separate and distinct arbitration agreement with the Claimant. The Court held that there had to be four separate arbitrations, but the defect in the notice was procedural and not substantive. The form of the notice, while irregular, was effective to commence four separate arbitration proceedings.

4.1.1   Commencement under the Domestic Acts

Under the Domestic Acts, there is no specified form to commence an arbitration. For example, section 23 of the Ontario domestic Act provides:

(1)   An arbitration may be commenced in any way recognized by law, including the following:

       (a)   A party to an arbitration agreement serves on the other parties notice to appoint or to participate in the appointment of an arbitrator under the agreement;
       (b)   If the arbitration agreement gives a person who is not a party power to appoint an arbitrator, one party serves notice to exercise that power on the person and serves a copy of the notice on the other parties;         (c)   A party serves on the other parties a notice demanding arbitration under the agreement.

The British Columbia domestic Act makes the point that if the parties to an arbitration agreement have agreed how arbitral proceedings are to be commenced, arbitral proceedings must be commenced in accordance with that agreement.