Conduct of Arbitral Proceedings - Chapter 6 - Arbitration Law of Canada: Practice and Procedure - Fourth Edition
An arbitration must adhere to the fundamental principles that the parties are treated fairly and equally, and that each party be given an opportunity to present their case. These principles are the foundation of all arbitral proceedings in Canada. In Ridout & Maybee LLP v. Johnston, the court stated:
The obligation of an arbitrator under sub-section 19(1) of the Act to treat the parties “equally and fairly” in an arbitration is a requirement directed towards procedural fairness in the conduct of the arbitration. “In essence, s. 19 incorporates the principles of natural justice.”
6.1 RULES OF PROCEDURE
The strength of the arbitral process is the ability to tailor the procedure to the dispute at hand. One size does not and should not fit all. A skilled arbitrator can, by the use of pre-hearing meetings and orders regarding procedure, help the parties devise a process that cuts to the core of the dispute, but maintains the essential elements of fairness and due process.
Unless the parties have agreed otherwise, the arbitral tribunal determines the procedure to be followed in the arbitration, so long as it is in accordance with the mandatory provisions of the relevant Domestic Act or Model Law at the place of arbitration. For example, The Quebec Code of Civil Procedure provides: “Arbitrators conduct the arbitration according to the procedure they determine; they are required, however, to see that the adversarial principle and the principle of proportionality are observed.”
Under some of the Domestic Acts, if an arbitral tribunal is composed of more than one arbitrator, the tribunal may delegate the determination of questions of procedure to the chair.
Under the Model Law, the parties are free to agree on any procedure to be followed by the arbitral tribunal in conducting the proceedings subject to the basic rules of fairness, equality and an opportunity to be heard. Failing such agreement, the arbitral tribunal may, subject to the Model Law, conduct the arbitration in such a manner “as it considers appropriate.” Under the Model Law, if all members of the tribunal agree, procedural rulings may be delegated to the presiding arbitrator.
The arbitral tribunal may decide, or the parties may agree on a process that has little or no resemblance to the procedure that would be used in a local court. For example, it is open to the parties to agree to have an inquisitorial arbitration as one has in a civil law system rather than an adversarial proceeding, or it may blend the two. An oral hearing may be completely dispensed with. A province’s rules of court have no application unless imported by the agreement of the parties or imposed by legislation. The Supreme Court of Canada has stated on more than one occasion that arbitration is a private justice system, parallel to, but not part of the State’s judicial system.
While some counsel may feel that the lack of specific rules are a negative factor in commercial arbitration, it does provide a unique opportunity for an experienced trial attorney to practice their advocacy skills in a manner constrained only by fundamental rules of natural justice and fairness. As has been said, “true strategists must not lament uncertainty, but embrace it as the well-spring of their art.”
Properly approached, arbitration permits advocacy in whatever manner counsel believes will be most effective. The problem is today’s litigators have been trained in whatever rules and procedures are used in their local court and believe these are just fine. They expect these procedures and the “way we do things here” should be transferred to the arbitral process in their entirety. They fail to appreciate that arbitration is a process whereby the needs of the commercial client who has a problem due to the behavior of another party is solved by having an acceptable third party decide what is the best way for doing so.