B.C.’s New Arbitration Act: Part Two

On March 5, 2020, the B.C. legislature passed Bill 7 into law. The bill replaces the Arbitration Act, RSBC 1996, c 55 (the “Old Act”) with a new Arbitration Act (the “New Act”), and makes consequential amendments to the Family Law Act, the Family Maintenance Enforcement Act, and the International Commercial Arbitration Act. The New Act will be brought into force by regulation on a date yet to be determined.

Part One of this blog highlighted a few procedural changes to arbitration brought about by the New Act, including how arbitral proceedings are commenced and how arbitral awards may be set aside or appealed. Part Two will discuss other features of the New Act: the emphasis on “place of arbitration”; the expansion of provisions relating to interim measures, specific performance, costs, and confidentiality; and the creation of the designated appointing authority.

1. Emphasis on the “place of arbitration”

The Old Act generally applied to an arbitration agreement relating to a commercial agreement, arbitration under an enactment that referred to the Old Act, and any other arbitration agreement. The New Act applies if the “place of arbitration” is B.C.

B.C. is deemed to be the “place of arbitration” if:

  1. the agreement that is the subject of the arbitration names B.C. as such or states that B.C. law applies;
  2. a person empowered by the agreement names B.C. as the place of arbitration; or
  3. the agreement does none of the above but the parties have their places of business in B.C.

2. The designated appointing authority

The New Act creates a prominent role for the “designated appointing authority” (the “DAA”). The DAA’s powers and responsibilities include:

  1. appointing an arbitrator if the parties fail to do so;
  2. directing the arbitrator to deliver an award despite the arbitrator not having received full payment of its fees; and
  3. making a summary determination of the amount of fees and expenses payable to the arbitrator.

A determination by the DAA cannot be questioned, reviewed, or restrained except as permitted by the New Act.

An entity will be designated by regulation to act as the DAA. The B.C. Government’s press release on the New Act indicates that the B.C. International Commercial Arbitration Centre, soon to be known as the Vancouver International Arbitration Centre, will be so designated.

3. Interim Measures

The Old Act provided very little direction on interim measures in the course of arbitration beyond providing that the arbitrator could make interim awards. By contrast, Part 6 of the New Act deals with interim measures in detail.

Part 6 gives the arbitrator the power to order interim measures. An interim measure, which includes an interim award, is any temporary measure by which the arbitrator orders a party to:

  1. maintain or restore the status quo pending a determination;
  2. refrain from action that is likely to cause harm or prejudice to the arbitral process;
  3. provide a means of preserving assets;
  4. preserve evidence that may be relevant and material; or
  5. provide appropriate security for costs.

The arbitrator may require the party seeking the interim measure to provide security. It may also modify, suspend, or terminate an interim measure that has been granted. A party who is granted an order is liable to pay costs and damages if it is later determined that the measure should not have been granted.

In terms of recognition and enforcement, the B.C. Supreme Court generally must enforce interim measures ordered by an arbitrator. The court may refuse to enforce a measure in limited circumstances, including where there are issues of procedural fairness, where the court finds the measure incompatible with its powers, or where enforcement would be contrary to public policy.

The court can also issue its own interim measures in relation to arbitral proceedings.

4. Specific Performance

The New Act preserves and expands the arbitrator’s power to make an order for specific performance of the parties’ agreement. The Old Act provided that the arbitrator could order specific performance in the context of an agreement for the sale of goods. Under the New Act, by contrast, the arbitrator may grant “orders of specific performance, injunctions, declarations, or other equitable remedies available.” While this section has not yet been interpreted, it suggests that the arbitrator could make an order for specific performance regardless of the type of agreement that is the subject of the arbitration.

5. Costs

Under the New Act, the arbitrator retains the power to determine whether a party is entitled to costs, the amount of costs payable, and how the costs are to be paid. However, the New Act adds that, in determining costs, the arbitrator may consider a party’s refusal to accept an offer to settle. The arbitrator must not be made aware of any offer to settle until an award has been issued that determines the dispute (except for costs).

6. Confidentiality

Finally, the New Act contains a provision to protect the parties’ information. All meetings and hearings must be held in private. With limited exceptions, the parties and the arbitrator must not disclose any proceedings, evidence, documents, or information connected to the arbitration, or any information about the arbitral award.

If you have any questions or concerns about the New Act, Loren Mallett or another member of our Business Law team would be happy to assist you.

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