Ontario’s International Commercial Arbitration Act Gets a Makeover
On March 22, 2017, the Ontario government enacted the International Commercial Arbitration Act, 2017 (“ICAA 2017”) as part of broader legislation to reduce regulatory burdens on businesses and achieve costs savings for government. ICAA 2017 replaces a previous version of the law enacted in 2006 (“ICAA 2006”).
This blog article summarizes the key changes in ICAA 2017. While these changes only do not significantly change Ontario's international arbitration regime, parties drafting arbitration agreements or participating in arbitrations should certainly be aware of them. In general, ICAA 2017 makes seating arbitrations in Ontario even more practical and desirable for arbitrating parties.
- Ontario formally adopts the New York Convention
In ICAA 2017, Ontario formally adopted the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) and attaches it as “Schedule 1”. The New York Convention requires courts of the 156 contracting states to give effect to arbitration agreements and to recognize and enforce arbitral awards made in other contracting states.
Canada became a contracting state to the New York Convention in 1986 and adopted it into federal law the same year. Although most have operated as though the New York Convention applies in Ontario, it had never been formally adopted into Ontario’s provincial law. ICAA 2017 eliminates any doubt that the New York Convention applies to arbitration agreements and awards made in Ontario.
- The form of arbitration agreements is modernized and expanded
In addition to making arbitration agreements in writing, ICAA 2017 allows parties to conclude arbitration agreements “orally, by conduct, or by other means”. The concept of “in writing” is also modernized to include electronic communications, including “data messages” and “electronic mail”.
This amendment forms part of the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”). While ICAA 2006 appended the UNCITRAL Model Law, 1985 as a schedule, ICAA 2017 has appended the UNCITRAL Model Law, 2006, which includes updated provisions on the definition and form of arbitration agreements, as “Schedule 2”.
- Arbitral tribunals may grant interim measures and preliminary orders
Also by virtue of appending UNCITRAL Model Law, 2006, ICAA 2017 allows arbitral tribunals to grant interim measures and preliminary orders. An interim measure is where, at the parties’ request, an arbitrator makes a temporary ruling, such as preventing action that would harm the arbitral process (i.e. an injunction) or preserves assets or evidence (i.e. freezing order). The arbitrator can then grant a preliminary order so as not to frustrate the purpose of the interim measure requested. ICAA 2017 includes the conditions for granting such measures and orders, as well as provisions on disclosure and costs in these circumstances.
- The limitation period for enforcement is extended to 10 years
ICAA 2017 extends the limitation period for the enforcement of an arbitral award to 10 years after the date the award is rendered. This change has the effect of amending Ontario’s Limitations Act, 2002, which provides for a basic limitation period of two years in most circumstances.
The Ontario government has made an equivalent amendment to the province’s domestic arbitration law, the Arbitration Act, 1991.