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

PREVIEW

7.1      INTRODUCTION

All of the Domestic and International Acts start with the basic proposition that no court is to intervene in matters governed by the respective Act, except as the Act provides.  In other words, you must find a specific provision within the governing legislation permitting the court’s involvement in the arbitral process.  The clear mandatory language displaces the old common law concept that the courts had an overriding or inherent supervisory jurisdiction over arbitral tribunals. The court should treat the parties to arbitration as strangers to the judicial system who have opted for a different method of resolving their dispute. The court will become involved in the arbitral process only to the extent applicable legislation permits.

Some commentators have suggested that in the international context there should be next to no court involvement at the place of arbitration. Rather, the only relevant court is the court at the place of enforcement. There and only there does it make sense for a court to determine if the arbitration award is suitable for enforcement by the State.  For example, the setting aside of an Award at the place of arbitration does not mean a court at the place of enforcement will not enforce the award. The reason for the set aside at the place of arbitration must accord with the law of the place of enforcement.

The common law has evolved to recognize that arbitration is a private contractual dispute settlement system, parallel to, but not part of the State’s judicial system.  Arbitration is a standalone private contractual process in which court involvement should only occur where specified in applicable arbitration legislation. If two parties can agree to privately settle a dispute, without reference to any court, they can agree to allow a third party to settle it for them.

While many in the arbitration field speak of court “intervention,” the courts in Canada, for the most part, have come to recognize that commercial arbitration has evolved to become an important but separate dispute resolution mechanism. Today it is more appropriate to speak in terms of court “involvement,” where necessary, to facilitate the arbitral process. Courts and arbitral tribunals have both come to recognize the need for and the contribution of the other. Together the courts and arbitral tribunals provide a sophisticated regime for the resolution of commercial disputes in Canada.

The courts in Canada have four general roles in the arbitration process:

1.     Requiring parties to honour their obligations under arbitration agreements, regardless of the place of arbitration.

2.     Supervising the conduct of the arbitration and the arbitrators, but only to the extent permitted by legislation, and only if the place of arbitration is within the jurisdiction of the court.

3.     Where requested, providing assistance in the conduct of the arbitration, usually, but not necessarily when the place of arbitration is within the jurisdiction of the court,  and

       4.     Enforcing arbitral awards regardless of where they were made.

Fundamental to the understanding of how a court approaches “involvement” or “intervention” in an arbitration is an analysis of how arbitration fits within the state’s legal system. At one end of the spectrum is the historical view that the court has exclusive jurisdiction to determine the law, and the appropriate conduct of the arbitration. In other words, arbitration is fully integrated as part of the state’s legal system. At the other end of the spectrum is the view that arbitration is a private process agreed to by the parties and as such the court has no reason to interfere with either the process or the determination of the law. Particularly in international arbitrations, the view is that there should be little state interest in supervising what is essentially a private matter between two commercial parties who have just happened to have chosen a particular province or territory as a place to hold a hearing. Any issue about the propriety of the arbitration should be dealt with at the place of enforcement.