Bill 11 – 2018: International Commercial Arbitration Amendment Act, 2018

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

SECTION 1: [International Commercial Arbitration Act, preamble] repeals the preamble to the Act.

1 The preamble to the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233, is repealed.

SECTION 2: [International Commercial Arbitration Act, section 1] is consequential to the addition of sections 17.08 to 17.10 to the Act by this Bill.

2 Section 1 (2) is amended by striking out "9, 35" and substituting "9, 17.08, 17.09, 17.10, 35".

SECTION 3: [International Commercial Arbitration Act, section 2] repeals the definitions of "arbitral award" and "B.C. Arbitration Centre".

(b) in the definition of "arbitration" by striking out "the B.C. Arbitration Centre or any other permanent" and substituting "a permanent", and

SECTION 4: [International Commercial Arbitration Act, section 2] is consequential to the repeal of the definition of "B.C. Arbitration Centre" by this Bill.

4 Section 2 (2) is amended by striking out "the B.C. Arbitration Centre or any other institution" and substituting "an institution".

SECTION 5: [International Commercial Arbitration Act, section 6]

provides that a court or arbitral tribunal, in interpreting the Act, must have regard to certain matters and may have regard to other specified matters;
provides that matters governed by the Act that are not expressly settled by its terms are to be settled in conformity with the general principles on which the Act is based.

International origin and general principles

(a) must have regard to the international origins of the Act, the need to promote uniformity in its application and the observance of good faith, and

(i) the Reports of the United Nations Commission on International Trade Law on the work of its eighteenth (1985) and thirty-ninth (2006) sessions (UN Docs A/40/17 and A/61/17);

(ii) the International Commercial Arbitration Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration (UN Doc A/CN.9/264);

(iii) the Commentary of the United Nations Commission on International Trade Law concerning the UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006 (UN Sales No. E.08.V.4).

(2) Questions concerning matters governed by this Act that are not expressly settled in this Act are to be settled in conformity with the general principles on which this Act is based.

SECTION 6: [International Commercial Arbitration Act, section 7], for the purposes of the section,

adds definitions, and
establishes criteria for determining if an arbitration agreement is in writing, including criteria in relation to electronic communications.

"arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes that have arisen or that may arise between the parties in respect of a defined legal relationship, whether contractual or not;

"data message" means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy;

"electronic communication" means any communication that the parties make by means of data messages.

(4) An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means.

(5) The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained in the electronic communication is accessible so as to be useable for subsequent reference.

(6) An arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.

(7) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement in writing if the reference is such as to make that arbitration clause part of the contract.

SECTION 7: [International Commercial Arbitration Act, section 8] clarifies when a party to an arbitration agreement may apply to a court to stay legal proceedings commenced against a party to the arbitration agreement.

7 Section 8 (1) is amended by striking out "service of any pleadings or taking any other step in the proceedings" and substituting "submitting the party's first statement on the substance of the dispute".

SECTION 8: [International Commercial Arbitration Act, section 11] clarifies a reference.

8 Section 11 (2) is amended by striking out "the arbitral tribunal" and substituting "an arbitral tribunal".

SECTION 9: [International Commercial Arbitration Act, section 12], for the purposes of subsection (3) (a) of the section, provides that an arbitrator may be challenged only if there is a real danger of bias on the part of the arbitrator in conducting the arbitration.

(3.1) For the purposes of subsection (3) (a), there are justifiable doubts as to the arbitrator's independence or impartiality only if there is a real danger of bias on the part of the arbitrator in conducting the arbitration.

SECTION 10: [International Commercial Arbitration Act, section 16] clarifies references.

(a) in subsection (5) by striking out "subsections (2) and (3)" and substituting "subsection (2) or (3)", and

(b) in subsection (6) by striking out "that it has jurisdiction" and substituting "on a plea referred to in subsection (2) or (3)".

SECTION 11: [International Commercial Arbitration Act, sections 17 to 17.10]

amends the Act to replace the current section authorizing the issuance of interim measures with a new Part 4.1 adopting provisions relating to the issuance of interim measures and preliminary orders set out in the 2006 UNCITRAL Model Law on International Commercial Arbitration;
authorizes arbitral tribunals to grant interim measures and sets out conditions for granting interim measures;
authorizes arbitral tribunals to grant preliminary orders and sets out conditions for granting preliminary orders;
adds requirements relating to preliminary orders;
provides for the modification, suspension or termination of interim measures and preliminary orders;
adds provisions relating to the requirement of a party to provide security, the disclosure of circumstances or changes in circumstances and liability for costs and damages;
adds provisions relating to the recognition and enforcement of interim measures;
provides for the powers of the court in relation to interim measures.

Power of arbitral tribunal to order interim measures

17 (1) Unless otherwise agreed by the parties and subject to section 17.01, the arbitral tribunal may, at the request of a party, grant an interim measure.

(2) In this Act, "interim measure" means any temporary measure, whether in the form of an arbitral award or in another form, by which, at any time before the issuance of the arbitral award by which the dispute is finally decided, the arbitral tribunal orders a party to

(b) take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself,

(d) preserve evidence that may be relevant and material to the resolution of the dispute, or

(e) provide appropriate security for costs in connection with arbitral proceedings.

Conditions for granting interim measures

17.01 (1) The party requesting an interim measure referred to in section 17 (2) (a), (c) or (e) must satisfy the arbitral tribunal that

(a) harm not adequately reparable by an award of damages or other monetary award is likely to result if the measure is not ordered,

(b) the harm referred to in paragraph (a) substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted, and

(2) A determination of an arbitral tribunal under subsection (1) (c) does not affect the discretion of the arbitral tribunal in making any subsequent determination.

(3) The requirements in subsection (1) apply, only to the extent the arbitral tribunal considers appropriate, to a request for an interim measure referred to in section 17 (2) (b) or (d).

Applications for preliminary orders and conditions for
granting preliminary orders

17.02 (1) Unless otherwise agreed by the parties, a party may, without notice to any other party, make a request for an interim measure together with an application for a preliminary order directing a party not to frustrate the purpose of the interim measure requested.

(2) Subject to subsection (3), the arbitral tribunal may grant a preliminary order if the arbitral tribunal considers that prior disclosure of the request for the interim measure to the party against whom it is directed risks frustrating the purpose of the interim measure.

(3) Section 17.01 applies to an application for a preliminary order and, for that purpose, the harm to be assessed under section 17.01 (1) (a) and (b) is the harm likely to result from the order being granted or not.

Specific regime for preliminary orders

17.03 (1) Immediately after the arbitral tribunal makes a determination in respect of an application for a preliminary order, the arbitral tribunal must give notice to all the parties of the following:

(d) all other communications, including by indicating the content of any oral communication, between any party and the arbitral tribunal in relation to a matter referred to in paragraph (a), (b) or (c).

(2) At the same time, the arbitral tribunal must give an opportunity to any party against whom a preliminary order is directed to present the party's case at the earliest practicable time.

(3) The arbitral tribunal must decide promptly on any objection to a preliminary order.

(4) A preliminary order expires 20 days after the date on which it was issued by the arbitral tribunal.

(5) After the party against whom a preliminary order is directed has been given notice and an opportunity to present its case, the arbitral tribunal may issue an interim measure adopting or modifying the preliminary order.

Modification, suspension or termination of
interim measures and preliminary orders

17.04 On application of any party or, in exceptional circumstances and with prior notice to the parties, on the arbitral tribunal's own initiative, an arbitral tribunal may modify, suspend or terminate an interim measure or a preliminary order it has granted.

Provision of security

17.05 (1) The arbitral tribunal may require the party requesting an interim measure to provide appropriate security in connection with the measure.

(2) The arbitral tribunal must require the party applying for a preliminary order to provide security in connection with the order unless the arbitral tribunal considers it inappropriate or unnecessary to do so.

Disclosure

17.06 (1) The arbitral tribunal may require any party promptly to disclose any material change in the circumstances on the basis of which an interim measure was requested or granted.

(2) The party applying for a preliminary order must disclose to the arbitral tribunal all circumstances that are likely to be relevant to the arbitral tribunal's determination whether to grant or maintain the order.

(3) The disclosure obligation under subsection (2) continues until the party against whom the preliminary order has been requested has had an opportunity to present its case.

(4) After the party against whom a preliminary order has been requested has had an opportunity to present its case, the arbitral tribunal may require any party promptly to disclose any material change in the circumstances on the basis of which the preliminary order was requested or granted.

Costs and damages

17.07 (1) The party requesting an interim measure or applying for a preliminary order is liable for any costs and damages caused by the interim measure or the preliminary order to any party if the arbitral tribunal later determines that, in the circumstances, the measure or the order should not have been granted.

(2) The arbitral tribunal may award the costs and damages referred to in subsection (1) at any time during the arbitral proceedings.

Recognition and enforcement

17.08 (1) Subject to section 17.09, an interim measure issued by an arbitral tribunal must be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced on application to the competent court irrespective of the state in which the interim measure was issued.

(2) The party who is seeking or has obtained recognition or enforcement of an interim measure must promptly inform the court of any modification, suspension or termination of that interim measure.

(3) The court of the state where recognition or enforcement is sought may, if that court considers it proper, order the requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with respect to security or where such a decision is necessary to protect the rights of third parties.

Grounds for refusing recognition or enforcement

(a) at the request of the party against whom the interim measure is directed if the court is satisfied that

(i) such refusal is warranted on the grounds referred to in section 36 (1) (a) (i), (ii), (iii) or (iv),

(ii) a decision of the arbitral tribunal with respect to the provision of security in connection with the interim measure has not been complied with, or

(iii) the interim measure has been suspended or terminated by the arbitral tribunal or, where so empowered, by a court of the state in which the arbitration takes place or under the law of which that interim measure was granted, or

(i) the interim measure is incompatible with the powers conferred upon the court, unless the court decides to reformulate the interim measure to the extent necessary to adapt the interim measure to its own powers and procedures for the purposes of enforcing that interim measure and without modifying its substance, or

(ii) any of the grounds referred to in section 36 (1) (b) (i) or (ii) apply to the recognition or enforcement of the interim measure.

(2) A determination made by the court on a ground referred to in subsection (1) is effective only for the purposes of the application to recognize or enforce the interim measure.

(3) The court where recognition or enforcement is sought may not, in making a determination on a ground referred to in subsection (1), undertake a review of the substance of the interim measure.

Court-ordered interim measures

17.10 (1) A court has the same powers to issue an interim measure in relation to arbitral proceedings, irrespective of whether the place of those proceedings is in British Columbia, as that court has in relation to court proceedings.

(2) The court must exercise the powers referred to in subsection (1) in accordance with its own procedures in consideration of the specific features of international arbitration.

(3) When requested to grant an interim measure, the court may, if it considers it proper, refer the request to an arbitral tribunal.

SECTION 12: [International Commercial Arbitration Act, section 18] clarifies a reference.

SECTION 13: [International Commercial Arbitration Act, section 21.01]

provides that a party may be represented in arbitral proceedings by any person of that party's choice;
provides for an exemption from section 15 of the Legal Profession Act for persons acting in, advising on or assisting with arbitral proceedings.

Representation in arbitral proceedings

21.01 (1) A party may be represented in arbitral proceedings by any person of that party's choice, including, but not limited to, a legal practitioner from another state.

(iii) prepares statements, documents or other materials in connection with arbitral proceedings.

SECTION 14: [International Commercial Arbitration Act, section 24] repeals section 24 (5), the substance of which is moved to section 36.01 (1) of the Act, as added by this Bill.

SECTION 15: [International Commercial Arbitration Act, section 27]

repeals section 27 (1) and replaces it with section 27;
repeals section 27 (2) and (3), the substance of which is moved to section 27.01 of the Act, as added by this Bill.

Court assistance in taking evidence

27 The arbitral tribunal, or a party with the approval of the arbitral tribunal, may request from the Supreme Court assistance in taking evidence, and the court may execute the request within its competence and according to its rules on taking evidence.

SECTION 16: [International Commercial Arbitration Act, section 27.01] replaces section 27 (2) and (3) with section 27.01 of the Act, as added by this Bill, which

authorizes the court to make orders in relation to the consolidation of 2 or more arbitral proceedings, and
provides for conditions for the making of orders under the section and the matters the court may have regard to in making orders.

Enforcement of consolidation agreements

27.01 (1) If all parties to 2 or more arbitral proceedings have agreed to consolidate those proceedings, a party, with notice to the other parties, may apply to the Supreme Court for an order that the proceedings be consolidated as agreed to by the parties.

(2) Subsection (1) does not limit the parties' ability to consolidate arbitral proceedings without a court order.

(3) If all parties to the arbitral proceedings have agreed to consolidate the proceedings but have not agreed, by adopting procedural rules or otherwise,

(a) to the designation of parties as claimants or respondents or a method for making those designations, or

the court may, on application under subsection (1) but subject to subsection (4), make an order deciding either or both of those matters.

(4) If the arbitral proceedings are under different arbitration agreements, the court must not make an order under this section unless, by their arbitration agreements or otherwise, the parties have agreed

(a) to the same place of arbitration or a method for determining a single place of arbitration for the consolidated proceedings in British Columbia,

(b) to the same procedural rules or a method for determining a single set of procedural rules for the conduct of the consolidated proceedings, and

(i) to have the consolidated proceedings administered by the same arbitral institution, or

(ii) to have the consolidated proceedings not be administered by any arbitral institution.

(5) In making an order under this section, the court may have regard to any circumstances it considers relevant, including

(a) whether one or more arbitrators have been appointed in one or more of the arbitral proceedings,

SECTION 17: [International Commercial Arbitration Act, section 28] clarifies a reference.

17 Section 28 (4) is amended by striking out "must" and substituting "may" and by adding "only" after "amiable compositeur".

SECTION 18: [International Commercial Arbitration Act, section 31]

authorizes arbitral tribunals to make a partial arbitral award that finally determines any matter with respect to which it may make a final arbitral award;
clarifies a reference;
is consequential to the repeal of the definition of "B.C. Arbitration Centre" and the addition of Part 4.1 of the Act by this Bill.

(a) in subsection (6) by striking out "an interim arbitral award on" and substituting "a partial arbitral award that finally determines",

(b) in subsection (8) by striking out "making an order for" and substituting "awarding", and

(c) in subsection (8) (a) (iii) by striking out "the B.C. Arbitration Centre or any other institution" and substituting "an institution".

SECTION 19: [International Commercial Arbitration Act, section 36]

for the purposes of subsection (1) (b) (ii) of the section, provides that third party funding is not contrary to public policy in British Columbia;
adds a definition for the purposes of the section.

(3) For the purposes of subsection (1) (b) (ii), third party funding for an arbitration is not contrary to the public policy in British Columbia.

(4) In subsection (3), "third party funding", in relation to an arbitration, means funding for the arbitration that is provided

(a) to a party to the arbitration agreement by a person who is not a party to that agreement, and

(b) in consideration of the person who provides the funding receiving a financial benefit if the funded party is successful in the arbitration.

SECTION 20: [International Commercial Arbitration Act, heading to Part 9] adds a heading to create Part 9.

SECTION 21: [International Commercial Arbitration Act, sections 36.01 and 36.02]

replaces section 24 (5) with section 36.01 (1) of the Act, as added by this Bill, which provides that, unless the parties agree otherwise, all hearings and meetings in arbitral proceedings must be held in private;
subject to specified exceptions, provides that, unless the parties agree otherwise, the parties and the arbitral tribunal must not disclose any proceedings, evidence, documents and information in connection with the arbitration that are not otherwise in the public domain and must not disclose an arbitral award;
provides limited immunity to an arbitrator for anything done or omitted to be done in connection with an arbitration.

Privacy and confidentiality

36.01 (1) Unless otherwise agreed by the parties, all hearings and meetings in arbitral proceedings must be held in private.

(2) Unless otherwise agreed by the parties, the parties and the arbitral tribunal must not disclose any of the following:

(a) proceedings, evidence, documents and information in connection with the arbitration that are not otherwise in the public domain;

(b) required to protect or pursue a legal right, including for the purposes of preparing and presenting a claim or defence in the arbitral proceedings or enforcing or challenging an arbitral award, or

Immunity

36.02 An arbitrator is not liable for anything done or omitted in connection with an arbitration unless the act or omission is in bad faith or the arbitrator has engaged in intentional wrongdoing.

SECTION 22: [International Commercial Arbitration Act, section 37] repeals the section that provided for regulation-making powers of the Lieutenant Governor in Council under the Act.

Commencement

Explanatory Notes