International Commercial Arbitration Act Amendments to Make B.C. Even More Arbitration-Friendly

On April 9, 2018, the Government of British Columbia introduced Bill 11, International Commercial Arbitration Amendment Act, to amend the International Commercial Arbitration Act (ICAA), which has been in effect since 1996. The amended ICAA will include new provisions that are designed to align the legislative regime in British Columbia with current international best practices and to make B.C. a more desirable venue for arbitration. Most of the amendments to the ICAA arise from the implementation of the 2006 amendments to the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL Model Law).

KEY CHANGES IN THE ICAA

Interim Measures and Preliminary Orders

Under the current ICAA, arbitration tribunals are permitted to grant interim measures. However, the scope of the tribunal's powers to grant interim measures and the mechanisms available to enforce them require clarification as there has been little consensus about the scope of the tribunal's powers and how interim measures can be enforced by Canadian courts.

The amended ICAA will bestow arbitration tribunals with broad powers to grant interim measures and preliminary orders, define the scope of interim measures, and provide a mechanism for the enforcement of interim measures in the event of non-compliance by a party.

Interim measures under the amended ICAA will include any temporary measure that maintains or restores the status quo, prevents prejudice to the arbitration process, preserves assets or evidence (such as through a freezing order), or provides security for costs in connection with the arbitration. The amended ICAA will also enable the tribunal to issue preliminary orders directing parties not to frustrate the purpose of an interim measure. British Columbia courts will be required to recognize and enforce such interim measures unless one of the enumerated grounds for refusing recognition or enforcement is met.

Third Party Funding

The amended ICAA will expressly state that third party funding for arbitration proceedings is not contrary to public policy in British Columbia. This is a legislative reflection of the growing acceptance of third party funding arrangements in dispute resolution proceedings under Canadian law.

Confidentiality

The amended ICAA will provide that unless the parties to an arbitration otherwise agree, all arbitration hearings and meetings must be held in private and any non-public information, documents, evidence and the arbitration award may not be disclosed by the parties or the arbitration tribunal. The current ICAA does not contain any confidentiality requirements, despite the fact that most parties perceive confidentiality as a primary benefit of arbitration.

Test for Arbitrator Bias

The amendments to the ICAA will make it more difficult to successfully challenge an arbitrator's independence or impartiality. In accordance with the UNCITRAL Model Law, the amended ICAA will provide that if an arbitrator is challenged on the ground that there are "justifiable doubts" as to his or her impartiality or independence, there must be "a real danger of bias" for the challenge to be successful. The traditional common law test for bias under Canadian law is whether there exists a reasonable apprehension of bias on the part of the arbitrator, which is a lower threshold than that proposed in the amended ICAA. 

Arbitration Agreement Definition

In the amended ICAA, the definition of "arbitration agreement" will be expanded to encompass agreements to arbitrate, which are made orally or by conduct, provided that they are recorded in writing, and will permit arbitration agreements to be recorded by electronic communication as long as that the electronic communication may be subsequently accessed.

CONCLUSION

By introducing these proposed amendments to the ICAA, the Government of British Columbia hopes to bring B.C.'s arbitration regime in line with other internationally renowned arbitration-friendly jurisdictions for international commercial and investment treaty disputes. Enacting this legislation may also strengthen Vancouver's upcoming bid on the 2022 International Council for Commercial Arbitration Congress, a prestigious global arbitration conference.

For further information, please contact:

Joe McArthur                            604-631-3383
Rebecca Spigelman                  604-631-3303

or any other member of our Arbitration group.