Ontario's new International Commercial Arbitration Act, 2017

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On March 22, 2017, key aspects of Ontario’s arbitration legislation were significantly revised when Bill 27, Burden Reduction Act, 2017 received Royal Assent from the Lieutenant Governor. According to its own introductory note, Bill 27 is part of a government initiative to reduce the regulatory burden on business and to achieve a cost savings for government.

International Commercial Arbitration Act, 2017

Under Bill 27, the International Commercial Arbitration Act, R.S.O. 1990, c. I.9 (ICAA) was repealed and replaced with the International Commercial Arbitration Act, 2017 (ICAA, 2017). While there are a number of changes in the new legislation, two key features of the modernized ICAA, 2017 include:

  1. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted by the United Nations Conference on International Commercial Arbitration in New York on 10 June 1958 (the New York Convention), which is already incorporated into international commercial arbitration legislation in various other Canadian jurisdictions, is now scheduled to the ICAA, 2017. The New York Convention applies “in relation to arbitral awards or arbitration agreements in respect of differences arising out of commercial legal relationships”, “whether made before or after the coming into force of the ICAA, 2017.” For the purpose of seeking recognition and enforcement of an arbitral award pursuant to the New York Convention under the ICAA, 2017, an application is to be made to the Ontario Superior Court of Justice.
  2. The Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985, as amended by the United Nations Commission on International Trade Law on 7 July 2006 (2006 Model Law) now “applies to international commercial arbitration agreements and awards made in international commercial arbitrations, whether made before or after the coming into force of this Act.” This makes Ontario the first jurisdiction in Canada to adopt the amendments found in the 2006 Model Law as opposed to the earlier 1985 Model Law. The 2006 Model Law includes revisions to Article 7 that address the form of arbitration agreement and are intended by UNCITRAL to reflect “evolving practice in international trade and technological developments.” More significantly, Article 17 on interim measures has been extensively revised in the 2006 Model Law. A definition of interim measures is provided, and the arbitral tribunal’s ability to issue interim measures is detailed. Article 17 also provides for the enforcement of interim measures ordered by an arbitral tribunal, irrespective of the country in which the interim measure was issued, on application to the court. Unless agreed otherwise by the parties, preliminary orders may also be obtained from the arbitral tribunal without notice as a means to preserve a status quo until such time as an interim measure is obtained. Further, the court also has the same power to issue an interim measure in relation to arbitration proceedings as it has in relation to court proceedings.

Also notable in the ICAA, 2017 is the change to the limitation period in which to commence a proceeding to enforce an arbitral award. This limitation period has now been aligned under both the ICAA, 2017 and the Arbitration Act, 1991, S.O. 1991, c. 17. Previously, the ICAA provided for a two year limitation period, and the Arbitration Act, 1991 did not specifically provide for a limitation period that would differ from the applicable limitation period under the Limitations Act, 2002, S.O. 2002, c. 24, Sch B. Following these recent amendments, both the international and domestic arbitration acts now provide for a 10 year limitation period. Complementary amendments were similarly made through Bill 27 to the Limitations Act, 2002.

Takeaways

These changes provide consistency between Ontario legislation and that in other Canadian jurisdictions, through the scheduling of the New York Convention to the ICAA, 2017, and consistency within Ontario through the alignment of certain limitation periods. This will amplify Ontario’s status as an arbitration-friendly jurisdiction. However, the ICAA, 2017 also adds to key differences in international commercial arbitration legislation between Ontario and other Canadian jurisdictions, and highlights the need for companies entering into arbitration agreements to carefully consider where they are choosing to seat an international commercial arbitration within Canada.

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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