CANADA Law and Practice Contributed by: John Pirie, Matthew Latella, David Gadsden and Christina Doria, Baker McKenzie
The applicable set of rules to recognise and enforce an arbitral award in Canada depends on whether the award is domestic or foreign. In addition, each prov - ince’s rules on enforcement vary slightly, so particular attention must be paid to the subtle variations across the country. Most Canadian provinces are subject to domestic and international arbitration legislation, each of which gov - erns the enforcement of domestic and international arbitral awards. In common law provinces (all but Que - bec, which has a code-based civil law system), an arbitration is international if: • it was held outside Canada; • the parties have their places of business in different countries; or • a substantial part of the obligations under the con - tract was performed outside Canada. In Quebec, an arbitration is foreign if the seat of the arbitration lies outside Quebec. The recognition and enforcement of foreign arbitral awards is governed by the applicable international arbitration acts adopted by the provinces. Canada has passed the United Nations Foreign Awards Con - vention Act, RSC, c 16 (2nd Supp), implementing the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”). Canada adopted the reser - vation to limit recognition to arbitral awards that are “commercial”. Every province has passed its own for - eign enforcement legislation, implementing the New York Convention. Canada has also passed the Commercial Arbitration Act RSC 1985, c 17 (2nd Supp), which adopts the UNCITRAL Model Law on International Commercial Arbitration (1985) (the “Model Law”). The common law provinces have also adopted the Model Law, with Ontario, British Columbia and Prince Edward Island adopting the Model Law’s 2006 amendments. Canada is a party to and has implemented the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 18
March 1965 (entered into force on 14 October 1966) (ICSID). As described in more detail in 4.2 Variations in Approach to Enforcement of Arbitral Awards , final awards obtained by tribunals with jurisdiction over the arbitral proceeding will be enforced subject to very narrow defences. 4.2 Variations in Approach to Enforcement of Arbitral Awards As discussed in 4.1 Legal Issues Concerning Enforcement of Arbitral Awards , the biggest distinc - tion is between domestic and international awards. However, in both cases, courts defer to the arbitration tribunal and will enforce the award, subject to limited grounds to refuse recognition and enforcement. In all cases, the enforcing court has no power to deal with the merits of the underlying arbitration. Generally speaking, and under the domestic Arbitra - tion Act 1991, SO 1991, c 17, the court “shall” grant judgment enforcing the award made in the province unless: • the award is not final and the period to commence an appeal or an application to set the award aside has not passed; • there is a pending appeal, an application to set aside the award, or an application to declare the award invalid; • the award has been set aside or the arbitration is the subject of a declaration of invalidity; or • the award is a family arbitration award. In order to recognise and enforce an arbitral award from another Canadian province in Ontario, the same test applies, with the added requirement that the sub - ject matter of the award must be capable of being the subject of arbitration under Ontario law. While all Canadian provinces’ courts readily enforce awards from their own or other Canadian provinces, there are differences in the procedures and tests, which need to be considered, depending on where enforcement of the award is sought. ICSID awards will typically be recognised as binding. The monetary obligations of the award will be enforce -
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