CANADA Law and Practice Contributed by: Craig A B Ferris, Michael J Donaldson and Scott Lucyk, Lawson Lundell LLP
The ICDR Rules, amended and effective from 1 March 2021, no longer restrict an arbitral tribunal governed by the ICDR Rules from awarding punitive, exemplary or similar damages. 10.3 Recovering Interest and Legal Costs An arbitrator’s powers to award pre- or post-award interest are not expressly addressed in the Model Law. Canadian courts have determined that the awarding of pre- or post-award interest is a matter of substantive law. The arbitrator’s mandate to resolve the parties’ dispute encompasses the power to award interest. The institutional rules also address the awarding of interest (Article 35 (e) of the VanIAC Rules and Article 34 (4) of the ICDR Rules). The Model Law does not address costs. However, the BC Act specifically provides in Section 31 (8) that, subject to the parties’ agreement, the arbitral tribu - nal may award costs, which include legal fees and expenses, the fees and expenses of the arbitrators and expert witnesses, administrative fees and other expenses related to the arbitration ( Allard v The Uni- versity of British Columbia , 2021 BCSC 60). The institutional rules may also permit an arbitral tribu - nal to award costs (eg, Article 38 of the VanIAC Rules and Article 34 of the ICDR-Canada Rules). Canada’s international commercial arbitration statutes permit a party to an arbitration to apply to the courts to have the award set aside on specific grounds. An application to set aside an arbitral award is not the same as an “appeal” of the judgment in a commercial case. When the decision of a trial judge in a com - mercial case is appealed in Canada, the grounds on which it may be reviewed are not limited or restricted. For a discussion about the setting aside of a domestic arbitral award on similar grounds and the distinction with a civil appeal, see Alectra Utilities Corporation v 11. Review of an Award 11.1 Grounds for Appeal
Solar Power Network Inc , 2019 ONCA 254, leave ref’d [2019] SCCA No 202 (SCC). Article 34 of the Model Law limits the grounds on which an arbitral award may be set aside. In particular, Article 34 of the Model Law provides that an arbitral award may be set aside if the applying party proves: • contractual incapacity; • invalidity under the law to which the parties have subjected it; • lack of notice of the arbitral appointment or pro - ceedings or inability to present the party’s case; • jurisdictional grounds (ie, the award deals with or decides matters beyond the scope of the submis - sion to arbitration); or • the composition of the arbitral tribunal or proce - dure was not in accordance with the parties’ agree - ment. Article 34 (2)(b) further permits the court to set aside an arbitral award if the court finds that the subject matter of the dispute is not capable of settlement by arbitration under the relevant law or if the arbitral award conflicts with public policy. 11.2 Excluding/Expanding the Scope of Appeal An application to set aside an arbitral award is not the same as an appeal and is limited to the grounds set out in Article 34 of the Model Law (or its statutory equivalent). Parties to an arbitration cannot agree to exclude or expand the scope of the application to set aside the award. 11.3 Standard of Judicial Review The traditional approach of Canadian courts has been to show deference to arbitral awards; when review - ing them, the courts apply the deferential standard of “reasonableness”, subject to a narrow set of excep - tions. For example, the least deferential “correctness” standard has been applied where the question is one of jurisdiction (ie, whether an arbitral decision was on matters beyond the scope of the submission to arbitration), following the 2011 decision of the Ontario Court of Appeal in Cargill ( United Mexican States v
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