1. The Anatomy of a Commercial Arbitration
An Arbitration from Start to Finish
Presented by: J. Brian Casey, Jennifer Ross‐Carrière and Michael D. Schafler
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2. Polling Question 1
• Who has acted as counsel in a commercial arbitration? Yes/No
• If “yes”, was it:
1. domestic;
2. international; or
3. both?
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3. Polling Question 2
• Of those who have participated in an arbitration, rank the
overall experience compared to litigation
• 1 = least favourable
• 2 = somewhat favourable
• 3 = equal
• 4 = moderately favourable
• 5 = most favourable
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4. Polling Question 3
• How would you describe your general knowledge of the
arbitral process?
• 1 = none
• 2 = limited knowledge
• 3 = somewhat knowledgeable
• 4 = moderate knowledge
• 5 = very knowledgeable
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5. The Arbitration Agreement
• Arbitration is consensual
• Arbitration requires an enforceable agreement pursuant to which the
parties agree to submit to arbitration
• Many types of arbitration clauses (see handout for examples)
– What is chosen is crucial
• Consider using model arbitration clauses
– International Chamber of Commerce (see handout for additional model clauses)
“All disputes arising out of or in connection with the present contract shall be
finally settled under the Rules of Arbitration of the International Chamber of
Commerce by one or more arbitrators appointed in accordance with the said
Rules.”
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6. Polling Question 4
• In your view, does Arbitration Agreement #1 (see handout p.
2) require an institutional ICC arbitration or some other
process? ICC/other
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7. Institutional Arbitration
• Arbitration administered by a permanent and impartial body,
either domestic or international, that has its own rules of
procedure
• Provides
– a set of rules and procedures
– access to pool of arbitrators
– administrative support
– supervision of proceedings
• Can be particularly helpful for international dispute resolution
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8. Ad Hoc Arbitration
• Arbitration conducted without the assistance of an
administering institution
• Parties have the flexibility (and burden) of creating their own
rules and procedures
• An ad hoc arbitration may have some institutional presence
– Parties may select an administering institution’s rules or have the
institution serve as appointing authority of the tribunal
– Sometimes referred to as “hybrid” arbitration
– Some arbitration rules are not amenable to being adopted by parties
intending to administer their arbitration privately
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9. Institutional vs. Ad hoc
Institutional Ad hoc
Advantages Advantages
• Rules are well known • Develop tailored rules
• Viability and reliability of institution • Parties retain influence in appointing
• Minimizes procedural difficulties by arbitrator
providing a procedural framework • Model Law Rules may be more acceptable
• Trained staff than those of the institutions
• Appointment Services • Institutional costs saved
Disadvantages Disadvantages
• Associated costs • Significant time and research to drafting
• Institution dictates timeframes • Lose credibility/reliability of institution
• Rules may not fit specific needs • Requires cooperation; disagreement can
• Institution plays larger role in selection of create hurdles
arbitrators
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10. Polling Question 5
• Do you think an arbitrator selected by a party will demonstrate
bias toward that party?
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11. Statutory Framework
• Arbitration Act, 1991, S.O. 1991, c. 17
– Applies to any arbitration, unless
• Excluded by other law
• The dispute is international
– Governs all aspects of arbitration
– Some mandatory provisions that permit court intervention
• International Commercial Arbitration Act, R.S.O. 1990, c. I.9
– Adopts UNCITRAL Model Law in Ontario; some modifications
– Applies to international arbitrations
• Carve out for all parties with places of business in Ontario
• Requires substantial connection outside Ontario
– Limits court involvement to an absolute minimum
• All provinces have a domestic arbitration act and an act adopting the
Model Law
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12. Jurisdiction
• An arbitral tribunal has the jurisdiction to determine the scope of its own
jurisdiction (the competence‐competence principle)
• Ontario Arbitration Act, s. 17(2):
– Tribunal may rule on its own jurisdiction to conduct the arbitration and may… rule on
objections with respect to the existence or validity of the arbitration agreement
• Model Law, Article 16:
– Tribunal may rule on its own jurisdiction, including any objections with respect to the
existence or validity of the arbitration agreement…
• Recent SCC decision in Seidel v. TELUS Communications Inc. 2011 SCC 15
affirms that the competence‐competence principle has general application
in Canada
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13. Judicial Assistance
• Court and law of the arbitral seat
– Example: US Co. and Canada Co. would seek the assistance of the Illinois courts,
applying the Illinois International Commercial Arbitration Act (even though
Ontario law governs the interpretation of the agreement)
• Areas of assistance
– Jurisdictional challenges between tribunals and national courts
– Staying court proceedings where a party refuses to arbitrate
– Determining questions of law
– Assistance in relation to constitution of a tribunal
– Issuing provisional measures in aid of the arbitration
– Ordering evidence taking or discovery
– Judicial review of procedural rulings of the tribunal
– Judicial review of arbitral awards in annulment actions
– Enforcement of orders and directions made by the tribunal
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14. The Arbitration – Preliminary Steps
• Commence the Arbitration
– Follow procedure set out in the applicable agreement, rules and legislation
(which can include appointment of an arbitrator or serving request for referral
to arbitration)
• Preliminary Meetings
– Discuss procedural matters
– Can decide important issues to streamline hearing
– Arbitrator can raise issues for resolution not raised by parties
– Outline claims, defences, etc.
– Propose schedule/timeline
– Discuss issues relating to discovery and experts
• Pleadings
– Claimant states the facts supporting its claim, the points at issue and the relief
or remedy sought
– Respondent states its defence in respect of these particulars
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15. The Arbitration – Pre‐hearing discovery
• Can be structured to meet particular needs
• May be subject to dispute between parties
– Claimant may want full production and discovery, may prefer U.S.
Rules of Civil Procedure (most extensive)
– Respondent may want limited discovery rights
• Under domestic acts, the tribunal may give directions to
– Submit to examination on oath/affirmation
– Produce records and documents in possession or power
– Inspect documents of a third party
• Model Law does not address discovery
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16. The Hearing
• Opening statements
• Calling of witnesses and submission of evidence
– Consider rules of evidence to apply and how evidence will be adduced
• Affidavit evidence?
• Witness statements?
• Examination in chief?
• Cross‐examination?
– Greater flexibility for admission of evidence; hearsay evidence is permissible
• Third party witnesses
– In domestic arbitrations, the tribunal may require a third party to give
evidence
– Model Law provides that the tribunal, or a party on consent, may request the
court’s assistance
• Experts hired by parties or appointed by tribunal
• Argument
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17. The Award, Appeals and Judicial Review
• Awards are final and binding
• Costs can be awarded
• Domestic acts provide for limited appeal rights with leave of the court
• May apply to have order set aside where
– party entered into the arbitration agreement while under a legal incapacity
– arbitration agreement is invalid or has ceased to exist
– award deals with a dispute that arbitration agreement does not cover
– composition of the tribunal was not in accordance with the agreement
– subject‐matter is not capable of being the subject of arbitration under the
applicable law
– applicant was not treated equally and fairly,
– arbitrator has committed a corrupt or fraudulent act or there is a reasonable
apprehension of bias; or
– the award was obtained by fraud
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18. Enforcement of Arbitral Award
Suppose Canada Co. wins and US Co. refuses to pay…
• While binding, an award does not permit enforcement by the usual means
of garnishment, sequestration, and seizure and sale
• Must apply to have award enforced (under domestic acts and Model Law)
• Once a judgment has been granted enforcing the award, the enforcement
powers of the court are the same as with any other court judgment
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19. Thank you.

20. The preceding presentation contains examples of the kinds of
issues companies dealing with arbitration could face. If you are
faced with one of these issues, please retain professional assistance
as each situation is unique.