Guidance from the Court on Appointing an Arbitrator: Van Doorn v Loopstra Nixon, 2023 ONSC 1782
Why This Case Matters
In Van Doorn v Loopstra Nixon, 2023 ONSC 1782, the Court was tasked with appointing an arbitrator to adjudicate a law firm partnership dispute, in a case where the subject arbitration agreement was silent on the process for appointing an arbitrator. The parties both put forward qualified candidates, however, Justice Brown ultimately selected the candidate with the most direct experience adjudicating partnership disputes.
This decision demonstrates the importance that a Court will place on the relative experience of a proposed arbitrator when selecting an arbitrator or arbitral tribunal. It also serves as a reminder to parties to ensure their arbitration agreement provides a clear procedure for the appointment of an arbitrator, otherwise court intervention may be required.
The applicant, Derek Van Doorn, moved for the Court to appoint an arbitrator to adjudicate a dispute between the law firm of Loopstra Nixon LLP and himself, a former partner of the firm. Section 10 (1) (a) of the Ontario Arbitration Act states that the Court may appoint an arbitrator in the event that the governing arbitration agreement “provides no procedure for appointing the arbitral tribunal”.
In this case, the arbitration clause in the Partnership Agreement did not provide any such method for appointing an arbitrator. Instead, it stated that any disputes arising out of the Partnership Agreement “shall be referred to arbitration in accordance with and subject to the provisions of the Arbitration Act”.
The Proposed Arbitrators
Both parties put forward experienced candidates, with a breadth of experience in commercial disputes. The applicant’s proposed arbitrator, formerly a judge of the Ontario Superior Court of Justice, had adjudicated a trial involving a law firm partnership dispute.
The respondent had proposed two experienced arbitrators, though neither had any experience arbitrating partnership disputes in the context of law firms.
The Court’s Appointment of an Arbitrator
The Arbitration Act does not outline specific criteria for the Court to consider in selecting an arbitrator. The Court turned to the jurisprudence for guidance, which provides that it is to consider “who would be best suited for the role of arbitrator given the nature of the questions that arise for determination and the factual matrix in which the issue arises”.
Justice Brown emphasized the importance of experience, noting that relative experience adjudicating disputes is often a decisive consideration.A desirable candidate is someone who is in the best position to “hit the ground running” without needing to familiarize themselves with the subject matter of the dispute.
Justice Brown accordingly selected the Honourable Mr. Newbould, as he had 20 years of combined adjudicative experience, including experience adjudicating law firm partnership disputes both as an arbitrator and a judge. While the respondent argued that their proposed candidates were better suited to act as arbitrators because they had more recent experience as law firm partners, Justice Brown did not find this argument persuasive. In the Court’s view, it was more significant for the candidate to have actual experience adjudicating disputes of a similar nature.
The decision is significant for two reasons. First, it serves as a reminder that parties ought to include a process for the appointment of an arbitrator when drafting arbitration clauses. In addition, parties have the option of including the necessary qualifications of any proposed arbitrator as part of the arbitration agreement.
Second, and more significantly, the decision reiterates the importance of experience when the Court is asked to select an arbitrator for parties. Justice Brown’s analysis suggests that parties should propose candidates that not only have experience adjudicating disputes, but also have experience adjudicating disputes that involve similar factual and legal issues.