Canada: A Prime Situs to Arbitrate International Commercial Dispute


When looking for a location for arbitration for international commercial disputes, one of the major criteria should be a location that conveys a feeling of impartiality amongst all the parties involved. This should facilitate the agreement to engage in the process by mitigating this roadblock. What is needed is a location within a country whose legal framework is designed to facilitate the arbitration procedure. Such a country is Canada. With a long history of neutrality, multiculturalism and diversity, Canada is also a party to the United nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Because of this, Canada enjoys reciprocated rights of enforcement of arbitral awards with any other jurisdiction in a member state which is a party to this convention. As of October 1, 2009, this accounted for 142 of the 192 member states of the United nations.

The provincial and territorial governments, as well as the Canadian Federal government, have adopted international arbitration laws based on the 1985 model the United Nation’s Commission on International Trade Law drafted. Because of this, the various Canadian international arbitration laws reflect this model law with minor variations. Also, Canadian courts give strong deference to international arbitration agreements by staying court proceedings and enforcing rewards.

Arbitration is initiated by an agreement between parties in writing. In Canada, one party may compel another party into arbitration if it is within their initial or subsequent contract to do so. If there exists one or more clauses of an agreement to arbitrate in a broader or more comprehensive document, the clause to arbitrate will survive the termination of the main contract. Judi Slot 
The tenor of the United Nation’s Commission on International Trade Law’s 1985 Model Law is such as to limit court intervention in international commercial arbitration. A Canadian court must pass any case onto arbitration when any of the international commercial arbitration legislative acts apply; unless it finds that an arbitration agreement is null and void, defunct or non-performable.

Whether or not a dispute comes under the jurisdiction of an arbitration agreement, is often a source of conflict in itself. In Canada, the arbitral tribunal has the authority to determine whether it is authorized to resolve the dispute. However, such determinations are reviewable, and a party may go directly to a court to challenge an arbitration tribunal’s jurisdiction.

Parties may enter into arbitration at any time, whether there is a former agreement to do so or not. Once an agreement has been initiated, it is not uncommon for a pre-hearing conference to occur between the parties in dispute. This pre-hearing is required by some of the rules of the various international arbitration institutes. During this hearing, the service of documents, the scope of pleadings, how uncontested facts will be managed, rights to privacy, the exchange of witness lists, and the other facets of the hearing will be discussed and decided. If interim relief or protective measures are needed, these may also be a part of the pre-hearing.

An oral hearing is not required under the Canadian international commercial legislation and may be performed by the submission of documents, orally, or a combination of the two. The main focus is to impartiality, practicality and expediency.

An award is usually given in writing and will include the reasons for the finding under the international commercial arbitration legislation. A settlement by the parties during the course of arbitration will be recorded as an award.

If the parties expressly agree to an appeal of the arbitrator’s decision, then there is an opportunity for review. However, this is not generally the case. Article 34 of the 1985 UNCITRAL Model Law states that an award may be set aside explicitly for these reasons:

• The arbitration agreement is invalid within the jurisdiction is the heard or if a party is has some inability to plead their case.

• Improper notice of the appointment of the arbitrator, the hearing or the prevention of a party from the presentation of their case.

• The award is given for reasons outside the scope of the arbitration agreement.

• A discrepancy of the arbitral tribunal or the proceedings from the arbitration agreement or the Model Law.

• The law of the jurisdiction where the hearing is held states that the subject-matter of the dispute is not with the realm of arbitration.

• There is some conflict with the award and the statutes of the jurisdiction.

• In order to set aside an award, application must be made within three months of the date the party receives the award within the awarding jurisdiction.

With an outstanding legal framework, Canada offers further incentives as a prime situs for international arbitration. Located between the Eastern countries and Europe, this centralized location is convenient to many areas as a meeting point. As the world’s second largest country by area, a location can be found either closer to the East or the West to further facilitate this feature. Canada is a modern country with easy access to any of its major centers of commerce. As a multilingual nation, its people and facilities are accustomed to accommodating and eliminating barriers.

Canada, with its excellent framework for international commercial arbitration, is an attractive location for this process. With the international intertwining of today’s business, the need for such a site is becoming more applicable. In order to facilitate the arbitration process, it makes sense to utilize a venue geared toward providing all the avenues necessary to ensure an impartial and binding result with a minimum of difficulties.

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