On September 1, 2020, a new Arbitration Act came into force in British Columbia. This new statue more closely aligns B.C.’s domestic arbitration legislation with the International Commercial Arbitration Act and the standards outlined in the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. It contains new provisions on applicable arbitration procedures, provides additional powers to arbitrators and generally modernizes arbitration practice in B.C., making our province a more arbitration-friendly jurisdiction.
What is arbitration?
Arbitration is a process by which parties to a dispute agree – either before or after the dispute arises – to have that dispute determined privately by an independent arbitrator (or sometimes a panel of multiple arbitrators). The general intention is that an arbitrator’s decision will be final and binding such that arbitration provides an alternative to having disputes resolved by a court.
To what does the new Arbitration Act apply?
The Act applies to all B.C. arbitrations commenced after September 1, 2020 that are not expressly excluded. Among the exclusions are arbitrations to which the International Commercial Arbitration Act applies, arbitrations of family law disputes as defined in the Family Law Act and arbitrations under a prescribed agreement entered into by the government of B.C. or Canada and the government of another jurisdiction within or outside Canada.
What has changed?
The new statute makes widespread changes to arbitration practice in B.C. Among others, those changes include the following:
- Commencement of Arbitration: The previous statute did not provide a clear procedure for commencing proceedings, leaving the matter to external rules of arbitration centres. The new Act provides a clear procedure for the commencement of arbitrations, which procedures are to be followed unless otherwise specified in the arbitration agreement.
- Disputes about Appointment of Arbitrator: Where the old Act was silent on the matter, the new Act delegates to the Vancouver International Arbitration Centre the authority to resolve disputes about appointing the arbitrator and/or the arbitrator’s fees.
- Interim Relief: The new Act provides a clear procedure for obtaining and enforcing interim awards, including interim relief sought without notice. The former Act provided the same authority to grant interim awards, but did not provide a procedure for obtaining it, making the new Act an improvement in terms of clarity and predictability.
- Limitation Dates: The new Act helpfully makes it clear that the same limitation periods applicable to commencing a court proceeding also apply to the commencement of arbitration proceedings, a matter on which its predecessor was silent, thereby leading to some debate about the applicability of those limitation periods.
- Timeliness and Delay: The new Act directly addresses the issue of timeliness, imposing a new duty on arbitrators and parties to achieve a just, speedy and economical determination of the issues, which new duty ought to serve to minimize delays in reaching a result.
- Evidence of Witnesses: The former Act contained no provisions as to the form of witness evidence. The new Act, presumably striving for timeliness and efficiency, requires that the direct evidence of witnesses is to be given in writing unless otherwise agreed by the parties or directed by the arbitrator. (Witnesses may still be cross-examined orally on that evidence.)
- Confidentiality: Unlike its predecessor (which was silent on the matter), the new Act expressly prohibits the disclosure of confidential information related to the arbitration, including the arbitral award.
- Arbitrator’s Powers: Under the old Act, arbitrators were required to adjudicate disputes solely on the basis of legal principles and were not on equitable grounds unless the parties agreed otherwise. The new Act requires arbitrators to consider equitable rights and defences in addition to legal ones. The new Act also expressly empowers the arbitrator to determine the law applicable to a dispute where the parties have not agreed on the law of a particular jurisdiction.
- Limited Judicial Intervention: The new Act provides that a court must not intervene in an arbitration proceeding except as expressly provided for by that statute. It further provides that an arbitral arbitral award must not be questioned, reviewed or restrained in any other proceeding (including under the Judicial Review Procedure Act) except as expressly permitted by the Act. While the latter prohibition was also found in the prior Act, the former is a new provision.
- Appeals: The new Act provides that parties may agree to opt out of any rights of appeal in their arbitration agreement, which is a drastic change from the prior statute which made no such provision. Should the parties not agree to opt out, appeals from arbitral awards are now made to the Court of Appeal rather than to Supreme Court as before. Leave to appeal must now be sought within 30 days of the arbitral award, rather than within the 60-day period provided for by the former Act.
- Enforcement of Extraprovincial Arbitral Awards: The former statute did not provide a process by which arbitral awards made outside B.C. could be recognized and enforced. Instead, parties had to rely on a two-step enforcement process under the Court Order Enforcement Act. Under the new statute, parties may now apply to the Supreme Court of British Columbia for recognition of arbitral awards made in other Canadian jurisdictions for the purposes of enforcing them in B.C.
Although arbitration proceedings are meant to be more efficient than court actions, they still involve determinations of rights and they can be tricky without the right legal advice, especially with a new governing statute now in force. If you need guidance on a matter that is headed for arbitration – or any other dispute – our skilled litigators can help. Get in touch with myself, Marta or any other one of our litigators anytime.