British Columbia’s new Arbitration Act and the VANIAC

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Following its first substantial revision in decades, British Columbia’s new Arbitration Act, SBC 2020, c 2 (the Act) came into force on September 1, 2020. The changes made under the Act will have an immediate impact in the new dynamic, and result in further differences between domestic arbitration statutes within Canada. As a part of this overall update to arbitration in British Columbia, the British Columbia International Commercial Arbitration Centre (BCICAC) has also changed its name and as of September 1, 2020 is now operating as the Vancouver International Arbitration Centre or VANIAC.

In the following paragraphs, we discuss a few of the impacts of the changes in the Act. Because the Act applies to all proceedings commenced in British Columbia on or after September 1, even if the arbitration clause at issue expressly referred to earlier domestic commercial legislation, parties looking to initiate an arbitration will want to discuss with counsel how these changes impact their specific circumstances. The same is true for parties looking to add (or re-examine) arbitration clauses in commercial agreements.

Appointment of arbitrators

Where parties cannot agree on the appointment of the Tribunal, and they have not agreed to use any other appointing authority, domestic arbitration statutes in Canada typically require that the Court appoints the arbitrator(s). Without delving into the strengths or weaknesses of this approach, one issue is the potential for delay. Particularly where a party wanting to proceed with an arbitration is unable to because of difficulties in getting into court to get the Tribunal appointed.

Under the Act, parties may agree on a procedure for appointing the Tribunal. If they do not have an agreement to use another appointing authority, and cannot agree on the appointment for a sole arbitrator, or the timelines for parties/arbitrators to appoint a three-member panel are not met, the party looking to advance the matter applies to the “designated appointing authority”. If the designated appointing authority fails to act within seven days of the request, then an application can be made to the Supreme Court. There is no appeal from an appointment made by the designated appointing authority or the Supreme Court.

This innovative development could lead to faster decisions on appointments. It could also result in a more robust appointment system where that appointing authority maintains an active list of neutrals with varying areas of expertise appropriate to a range of disputes. In this vein, there is also great potential for the appointing authority to lead the way in terms of diversity in appointments of neutrals because they can maintain a broad list of potential arbitrators.
On June 29, 2020, an Order in Counsel directed that the VANIAC is to act as the designated appointing authority under the Act.

Arbitration procedure

Under the former statute, unless the parties agreed otherwise a domestic commercial arbitration would be conducted under the domestic commercial arbitration rules of the BCICAC. This is not carried through to the new Act. There are also a few general updates, such as:

  • More detailed provisions on consolidation of arbitral proceedings under section 9
  • Details on the duty of an expert at section 35 that mirror the duty of expert witnesses set out by the Supreme Court Civil Rules, BC Reg 168/2009
  • A specific process for preliminary or interim measures at section 38
  • Confirmation at section 63 that unless agreed otherwise all arbitral proceedings are to be held in private, and unless agreed otherwise (or in certain specific circumstances), all materials exchanged in the arbitration that are not in the public domain are confidential
  • Express reference at section 25 that permits a Tribunal to consider equitable rights or defences

Takeaways

While some of the updates in the Act take into account developments in arbitration over the last several years, the Act also introduces novel changes to arbitration in Canada. These changes will impact how arbitration clauses are drafted and arbitral procedures going forward. Parties to arbitration agreements governed by the Act will want to be aware of all of the changes involved so that they can best navigate their disputes in the new dynamic.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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