New Arbitration Act of British Columbia

Introduction

The arbitrations in British Columbia (B.C.) are governed by the Arbitration Act which determines disputes through a private adversarial process without using the court. Arbitration takes place when parties are either compelled by the statute or they willingly agree by contract to make submissions. After the complete process, the decision is given by the Arbitrator which is binding on both the parties. Mediation and Arbitration are different concerning the settlement of disputes as a decision given by a mediator is not a binding decision for the parties.

The New Arbitration Act, S.B.C 2020 has come into force on September 1, 2020, to enhance the regime of domestic arbitration. This modernized approach has repealed and replaced the old Arbitration Act, R.S.B.C 1996, c 55. Uniform Law Conference of Canada which was held on December 1, 2016, adopted the Uniform Model Arbitration Act (2016) and paved the way to have equable arbitration laws. The New Act adopted and followed the same intending to align with International Arbitration Legislation of British Columbia.

Excludes Family Law

For the disputes related to family law, the New Act is no longer applicable. Instead, the disputes related to family law arbitration will be dealt with under the division of Part 2 which is added to the Family Law Act. However, applicability of International Commercial Arbitration Act will prevail over the New Act.

Outset of Proceedings

The New Act elucidates the ways of commencement of Arbitration proceedings. The commencement can be done by one party after delivering notice to another party; demanding arbitration. The party sending the notice can either appoint the arbitrator or can request the other party to participate in arbitrator’s appointment.

Expands duties of Arbitrator

Under the New Act, the powers of arbitrators are expanded as compared to the Old Act. Now without any restriction, the arbitrator has the power to decide evidentiary matters. The powers of the Arbitrator has now widened even to work regarding the procedures of the proceedings. Unless specified in the agreement of arbitration, the applicable laws can be chosen by the Arbitrator. The Old Act emphasised on the usage of legal principles only but now equitable rights or available defences can be considered by the Arbitrator under the law that is selected by them. The Arbitrator must treat the parties fairly by allowing them to present their case. This duty is entrusted to ensure speedy arbitration without any wilful delay.

Enabled Transparency

The act comprises of key changes and provisions to escalate the proceedings. It includes the change in the appeal process and setting limits on judicial intervention. Some changes are done in a way to clearly express the powers of the arbitral tribunal and the extent to which procedural mechanism is codified. It is believed that these changes will surely bring transparency and clarity among those who are involved in arbitral proceedings.

The proliferation of Powers of the Tribunal

The powers of the tribunal have been expanded under the New Act. The Old Act applied the British Columbia International Commercial Arbitration Centre Rules which are now abolished. The arbitral tribunal now has the power to issue subpoenas when it requires the evidence to be produced by the person.

According to the Old Act, matters were adjudicated by the tribunal regarding the law. Now the tribunals as per the applicable laws need to decide the disputes which include available rights or defences (Section 25). Appointment can be done for a tribunal expert and a party can be ordered to provide information access for inspection under the newly enacted law.

The Old Act did not clarify the general duties but the New Act has clearly stated the duties of the Arbitral Tribunal to have pace in proceedings based on merits. Also, in case of any query concerning the jurisdiction that needs to be followed, the tribunal can determine and decide on its own. The tribunal now has the power to work upon the scope and validity of agreements related to arbitration and cam also furnish procedural guidance which the party must be aware of to appeal to the Supreme Court.

Default Regime and Limitation Period for Procedural Issues

The new act concerning requirements has formulated the witness evidence framework which does not have any existence in the old act. It has updated the procedural mechanism making it clearer to deal with matters of arbitral proceedings. The proceedings can be commenced for an Arbitration agreement even if there is no procedure specified thereof. In context of limitation, the limitation period which applies to proceedings of the court can be followed and applied for arbitral proceeding, enabling the arbitral tribunal to come up with rulings.

Enforcing Comprehensive Consolidation Regime and Interim Measures

Now the issues which are related to confidentiality and disclosure of direct evidence can be avoided by the parties as there are limited opportunities to involve in procedural disputes. The role of the court to consolidate arbitral proceedings is established in the New Act modelled from the International Commercial Arbitration Act, R.S.B.C. 1996, c.233. Consent needs to be there of the concerned party to display the procedures which are a part of witness evidence. Under section 28 it is directed that evidence needs to be recorded in written form.

By an application to the BC Supreme Court, the interim measures can be enforced. However, the court has the power to refuse them. The interim measures can be obtained as Preliminary orders under section 37 and 38.

Modernization of Appeal Process

To achieve Arbitral Award with speedy results the process for appeal has been modernized. The BC Court can now directly deal with the matters relating to jurisdiction under which the appeal falls or to any question of law. The court has the power to agree, suggest amendments or quash any arbitral award or completely revoke award to the tribunal. This power to set aside an arbitral award to be done based on terms which are not covered for an Arbitral Award and when the arbitral award is being inoperative. These include partiality done by the Arbitrator or any doubts related to his impartiality.

Under the old Act, the limitation period within which an appeal can be made by the party was 60 days. Now the limitation period is 30 days from the date the award is made (Section 60). The same limitation period is to be considered for application to set aside awards.

Establishment of VANIAC

On September 1, 2020, along with the New Act, the new Vancouver International Arbitration Centre (VANIAC) Rules has also come into force to supplement it. The VANIAC Rules will provide the procedural structure that needs to accompany the responsibilities of “Designated Appointing Authority”.

Designated Appointing Authority

A remarkable change is made with the formation of “Designated Appointing Authority”. This has helped to reach the BC Supreme Court (section 14) in cases where the appointment is not made by the designated appointing authority. The old act did not have such provision and the only recourse available was the application to the court. There are other functions also of the designated appointing authority, particularly to resolve issues that are related to fees and expenses of the tribunal (Section 55). The terms for the imposition of the arbitral award can also be directed on non-fulfilment of payment of expenses and fees (Section 52).

Under the regulatory act, designation entity will be appointed as Designated Appointing Authority. This designated appointing authority will be the B.C International Commercial Arbitration Centre and which is now to be known as the Vancouver International Arbitration Centre by the application of VANIAC Rules.

Conclusion

For appeals of the arbitration award, the parties have the option to opt-out on the question of law. This flexibility was not permitted under the Old Act. Certain decisions given by the Supreme Court especially the ones involving procedural matters cannot be appealed further. The award can be set aside based on available grounds under the UNCITRAL Model and International Commercial Arbitration Act. Under Section 58, there was no process earlier to enforce the arbitral awards for other Canadian jurisdictions but the new act has special provisions for it which requires an application to be made to B.C. Supreme Court. The new act strives to maintain the confidentiality of the arbitration proceedings as section 63 of the act states that the proceedings are to be done privately and no disclosure should be done by the parties concerning any evidence, information and documents which are connected with the arbitration. This also includes non-disclosure of the arbitral award which is not otherwise in the public domain.

The previous arbitrations which have commenced will continue according to the old act, the Arbitration Act, R.S.B.C. 1979 and the New Act is applicable only on arbitrations commencing on or after September 1, 2020, as per Section 70 (1). The Old Act excludes its applicability wherever the International Commercial Arbitration Act applies. Even for arbitration of Family Law Dispute, the act is not applicable. This new reform enables BC to resolve the disputes of commercial nature through arbitration in a way to enable Canada to have the mechanism of arbitration-friendly jurisdiction.