In recent years, a significant number of individuals and organizations across the country have turned to private arbitration as a preferred method of dispute resolution (we wrote about why in our post here).
On September 1, 2020, the British Columbia Government repealed the previous Arbitration Act, RSBC 1996, c. 55 (the “Former Act”) and replaced it with the Arbitration Act, SBC 2020 c. 2 (the “New Act”). The New Act seeks to modernize BC’s arbitration regime and bring it in line with international standards.
Below are some key difference between the Former Act and the New Act. In general, the New Act provides further details and more clarity about arbitration procedures in BC.
The Former Act was unclear on how to commence proceedings when there was no existing arbitration agreement between the parties. Under the New Act, this process has been clarified. If the parties have agreed on how to initiate proceedings, the parties can commence arbitration in that manner. If no clear procedures have been agreed to, a party can send a notice demanding arbitration or a notice to request the other party’s participation in appointing an arbitrator. A party can also send a notice that an arbitrator has been appointed if that is authorized under the agreement.
The Vancouver International Arbitration Centre
The Vancouver International Arbitration Centre (VIAC) is the Designated Appointing Authority under the New Act, replacing the BC International Arbitration Centre. The VIAC has authority to address disputes that arise in arbitration such as the appointment of an arbitrator or the determination of arbitrator fees. Under the Former Act, these types of disputes were dealt with by application to the BC Supreme Court.
Powers and Duties of Arbitrator and Parties
The New Act broadens the powers of arbitrators and requires them to consider equitable rights and defenses, as well as the applicable law, when deciding disputes. The Former Act only required arbitrators to consider legal principles. Under the New Act, arbitrators also have broader powers to decide evidentiary issues such as admissibility, relevance, weight, and materiality.
The New Act provides clear procedures for obtaining interim measures in an arbitration proceeding. Interim measures include orders for preservation of assets or evidence, or ordering security for costs. Interim measures ordered by an arbitrator can be enforced by the BC Supreme Court and are binding on the parties, unless there are procedural concerns. Parties can also seek Interim Measures without notice. These measures are called Preliminary Orders and will not be enforced by the Supreme Court. Parties may apply for modification, suspension or termination of interim measures and preliminary orders
Under the New Act, all direct evidence must be presented in written form unless another form has been agreed to by the parties or directed by the arbitrator. The Former Act had no specific form requirements for witness evidence. Any viva voce evidence is restricted to cross-examination of the witness.
Tribunal Appointed Expert
The New Act authorizes arbitrators to appoint experts to report to the arbitral tribunal and the parties unless the parties have agreed otherwise. The expert has a duty to assist the tribunal and cannot act as an advocate for any of the parties. The arbitrator can also order the parties to provide the expert with information and access.
The New Act provides more autonomy to arbitral tribunals. The New Act limits courts from intervening in arbitration matters unless permitted to intervene under the Act. The New Act also limits the extent to which arbitral proceedings, awards, and determinations by the VIAC can be reviewed or restrained.
The New Act significantly alters the appeals process in place under the Former Act. Under the New Act, parties can appeal arbitration awards by seeking leave from the BC Court of Appeal within 30 days of the award. Under the Former Act, appeals could be made within 60 days to the BC Supreme Court.
The Supreme Court continues to have residual powers to set aside arbitration awards, but can only do so based on specific grounds listed in the New Act. These include issues about: an inoperative arbitration agreement, an award dealing with a dispute not within the terms of the arbitration agreement and justifiable doubts regarding the arbitrator’s impartiality. If the BC Supreme Court sets aside an arbitral award, parties may appeal with leave to the Court of Appeal.
The New Act also allows parties to opt out of their right to appeal by an express provision in their arbitration agreement.
More detailed than its predecessor, the New Act provides clarity, efficiency, and flexibility to arbitration proceedings. The Act allows parties to resolve disputes in a timely manner and take full advantage of the benefits of arbitration.
Given the significant changes in the New Act, parties should be cautious in drafting arbitration agreements in the future and note which provisions can be opted out of and which provisions are mandatory. In particular, the changes in the appeal process require significant consideration and parties should consider whether the right of appeal should be opted out of in their agreements.
Please see here for the New Act.
Written by Joseph Romanoski with assistance from Articling Student, Lauren Gnanasihamany