Posts Tagged ‘alternative dispute resolution’

Herb Silber, Q.C.
Wednesday, October 8th, 2014    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

Sattva Capital Corp v. Creston Moly Corp, 2014 SCC 53 (Sattva)

In the past I have posed the question as to whether Arbitration can be more cost effective and efficient than a court process. The recent Supreme Court of Canada decision, Sattva, provides a complete compendium on the right to appeal a decision of an arbitrator. The upshot of that case is to clarify (if it had been required) that the right to appeal an arbitrator’s decision, particularly when the subject matter of the arbitration is the interpretation of a contract, is very limited- even more so than an appeal from a decision of an inferior court. The result is that it presents another benefit to the insertion of an arbitration clause in an agreement for those parties who wish to ensure that, in the event of a dispute, the outcome of a decision by the arbitrator is likely to be final, thus limiting the cost and enhancing the efficiency of this alternative dispute mechanism. Sattva represents the latest pronouncement of the Supreme Court of Canada’s philosophical adherence to providing parties access to justice by limiting the ability to appeal an arbitrator’s decision, thus ensuring that the more financially robust party will not be able to “tilt the playing field.”

Briefly, the facts in Sattva involved a contractual dispute over a finder’s fee that Sattva alleged was owing to it. In particular, under their contract, Sattva was to be paid a fee of US $1.5 million in shares. The issue that the arbitrator was asked to consider was the date the shares were to be valued. Nine million shares hung in the balance based on the alternative dates each of the parties contended for.

The Court first dealt with principles of contract interpretation and concluded that as most contracts involved a consideration of mixed fact and the law, the right to appeal under S. 31 of the Arbitration Act, SBC 2004, which is limited to questions of law, would rarely be able to be resorted to. The result of this is that in arbitrations involving an interpretation of a contract, which is most often the case, the arbitrator’s decision is likely to be final.

 

Additionally, the Court weighed in on the test to be applied by a court reviewing an arbitral decision, if it has the jurisdiction to do so. The Court’s approach was to re-iterate the importance it places on giving great latitude or deference to the arbitrator in his decision making process. This stems from recognition of the importance of maintaining the integrity of the arbitral process. As the Court noted at paragraph 89 of Sattva, arbitration often is chosen “…to obtain a fast and final resolution…” Later at paragraph 105, the Court observed that “… it may be presumed that [because the parties choose their decision maker] such decision makers are either chosen based upon their expertise in their area which is the subject matter of the dispute or are otherwise qualified in a manner acceptable to the parties.” For these reasons, the Court identified that the test for overturning an arbitral decision should be akin to that of overturning a decision by an administrative tribunal-reasonableness. This presents a high bar to overturn an arbitral decision.

The Sattva case represents, in my opinion, a high water mark in the promotion of an efficient and cost effective process that the parties can look to if they choose to have any disputes that may arise in their commercial relationship governed by arbitration.

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Herb Silber, Q.C.
Tuesday, March 18th, 2014    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

This is the third and final installment in the series on the topic of how arbitrations can be made more cost effective and efficient. The previous two articles considered strategies that could be deployed at the time the arbitration clause is negotiated and inserted in an agreement and at the time the dispute arises.

The biggest difference in the strategies during the arbitration itself is that this is the forum in which the Arbitration Panel has the most active role. At this stage the parties will have agreed, or will have been guided by the Arbitration Panel, as to the shape of the process and rules that will inform the Arbitration, so it leaves the greatest scope for the Arbitration Panel to exercise their discretion to assist in making the arbitration both cost effective and efficient. The Panel can, by their skill and creativity be part of a solution, or conversely, be part of the problem. The overarching principle that arbitrations are governed by can be found in Rule 19 (or a variation thereof) of the Rules of the BC International Domestic Arbitration Centre (BCICAC) which states:

  1. Subject to these Rules, the arbitration tribunal may conduct the arbitration in the manner it considers appropriate but each party shall be treated fairly and shall be given full opportunity to present its case.
  2. The arbitration tribunal shall strive to achieve a just, speedy and economical determination of the proceeding on its merits.

 

It is important for both Counsel and the Arbitration Panel to always be mindful of this rule when they are considering how the Arbitration will be conducted, both prior to the Hearing and at the Hearing. Rule 19 provides a balance between equity and efficiency, so that while each party must be treated fairly, they must also recognize that the arbitration process does not guarantee perfect justice.

Rule 19 gives the Arbitration Panel the discretion in the procedure to use in adopting its decisions. As an example, there is Authority to support the proposition that the Courts should not review an interlocutory ruling (not being an “award”). However, given that Arbitration is built on a consensual process, the experienced Arbitration Panel, should always try to encourage the parties to come to or build a consensus as to how the arbitration should proceed. The ability to do this separates the good arbitrators, who will be sought out, from others who do not have this mindset or skill.

Some ideas that should be considered by the Arbitration Panel, with the participation of the parties, would include the use of written submissions wherever possible, including having the Hearing done by way of a written hearing. This could be particularly useful if the facts are really not in dispute and could certainly result in a saving of time and costs. Other ways to make the Arbitration more cost effective may be to carefully consider, what if any cross examination may be needed and should there be time limits on it. Where expert witnesses are retained by both parties, should they meet and try to provide a “joint report identifying those matters which are not in dispute and those which are in dispute.”[1]

The ideas presented in the previous paragraphs are but a few that could be considered by the Arbitration Panel, working in conjunction with the parties to ensure that the Arbitration is cost effective and efficient, while still maintaining the important touchstone of “fairness”.

[1] Rule 27(3) BCICAC Rules

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Herb Silber, Q.C.
Wednesday, October 10th, 2012    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

Many jurisdictions have mandatory mediation schemes of one type or another. Some are by a legislative scheme as is the case in British Columbia, [1] where any party can trigger the process to begin.  Other jurisdictions, particularly in various states in the U.S., have a judicial process that gives discretion to order mediation. While a “mandatory mediation” may sound counter intuitive given that our understanding is that at its core mediation is intended to be a consensual process, my experience is that it is surprising what the dynamic of having the parties commit time, personnel and resources can achieve. Often times this may be the first time the parties have been a room together, either ever or certainly since the dispute arose. Whether they think they do or not, they have a psychological investment in seeking success.  As such, while they may have met involuntarily, that does not necessarily mean that a voluntary agreement cannot be reached. It must be noted of course that no jurisdiction I am aware of requires the parties to come up with an agreement, only that they participate in arguably a good faith fashion to do so. At the very least the process can be useful to narrow the issues between the parties even if a full scale resolution is not achievable.

The one question sometimes arise is how to deal with a recalcitrant party who refuses to participate in the process. Various options may be available depending on the source of the mandatory mediation process. As an example, under the legislative model used in British Columbia, the defaulting party may ultimately find that their claim is dismissed or their defence is struck if they persistently refuse to engage in the mediation and the steps leading to it. Elsewhere where a judge is responsible for ordering the mediation, failure to comply with the Court’s Order could lead to a contempt citation. While these are draconian methods, the real objective of the mediator ought to be to ascertain why the party or parties, depending on the scheme employed, are objecting to the process and attempt to override through persuasion these concerns.

 


[1] Notice to Mediate

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Herb Silber, Q.C.
Friday, November 5th, 2010    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

Herb Silber is a graduate of the Harvard School of Negotiation Mediation Program

Mediation is a form of alternative dispute resolution which aims to assist disputing parties in reaching an agreement through the use of a trained third party facilitator.  The process differs from arbitration in that resolution at mediation must be brought about by achieving a voluntary consensus between the parties. On the other hand, in an arbitration, although the decision to engage in the process may or may not be voluntary, the result is a legally binding decision.

Mediators therefore play a unique function in that they must be skilled in bringing about a consensus between the disputing parties.   There are a number of roles that an effective mediator will have to assume during the course of a mediation.  These include:
* Facilitation.
* Translation of the parties’ positions.
* Transmissions of facts that the parties may be unaware of.
* Making sure that the parties focus on their interests rather than getting bogged down on their positions.
* Working with the parties to discover or create options.
* Where required, bringing a “dose of reality” to the parties.

In coming postings on this blog, I will examine and provide more information on each of the elements of the mediator’s role as I have set out above.   I hope that my analysis will be of assistance to parties contemplating alternatives to resolving their disputes through traditional adjucative processes.

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