On September 1, 2020, amendments to the current B.C. Arbitration Act, R.S.B.C. 1996, c. 55 (the “Previous Act”) come into effect by way of the Arbitration Act, SBC 2020 c. 2 (the “New Arbitration Act”). The stated intent of the New Arbitration Act as it was introduced on its first reading, is to modernize B.C.’s domestic arbitration regime and achieve greater harmony with arbitration procedures set out in the International Commercial Arbitration Act and the Uniform Commercial Arbitration Act (2016) adopted by the Uniform Law Conference of Canada on December 1, 2016.
In order to achieve this goal, a number of revisions have been made to certain key provisions of the Previous Act, and new provisions have been added to clarify the process for arbitrations in B.C., including:
- renaming of the British Columbia International Arbitration Centre to be the Vancouver International Arbitration Centre (“VIAC”). The VIAC rules of procedures have also been updated. The updated rules can be found here. They have been revised to be consistent with the revisions effected by the New Arbitration Act;
- provisions confirming that arbitral proceedings may be commenced either pursuant to the terms of agreement between the parties, or by sending the specified form of arbitral notice. Under the Previous Act, the procedures for commencing arbitral proceedings where the parties had not otherwise agreed is not clear;
- provisions confirming that the provincial laws regarding limitation periods for commencing court proceedings apply to the commencement of arbitral proceedings, as determined by the discretion of the arbitrator. (An area in which the Previous Act is silent on);
- provisions delegating power to the VIAC to resolve secondary disputes arising in connection with the arbitration, including disputes about appointing the arbitrator and the arbitrator’s fees
- provisions confirming that arbitrators appointed pursuant to the New Arbitration Act must consider equitable rights and defences in addition to legal principles, and that arbitrators must consider equitable rights and defences in addition to legal principles when presiding over an arbitration;
- revisions to the ability of witnesses to give direct evidence. Under the New Arbitration Act, all direct witness evidence is to be submitted in written form (unless the parties otherwise agree or the arbitrator directs). Viva voce evidence is now restricted to cross-examination of witnesses;
- provisions confirming that an arbitrator may appoint experts to report to the tribunal and the parties to the arbitration. These provisions also provide that the arbitrator may order a party to provide the appointed expert with information and access to records, goods, or other property for inspection.
- provisions confirming procedures for obtaining and enforcing “interim measures” defined as meaning interim orders requiring a party to preserve assets and evidence, maintain the status quo pending determination of the dispute, security for costs, and 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. These interim measures may be sought without notice.
The regime for seeking interim measures includes provisions that establish that:
- there will be a rebuttable presumption that the party seeking the interim measures will provide security in connection with the interim order sought;
- the party seeking the interim measure will be liable for all damages and costs caused by the interim measures if the arbiter later determines that, in the circumstances, the interim order should not have been granted; and
- that there will be ongoing disclosure obligations in the event of material changes in the circumstances on which the interim measures were sought;
provisions clarifying appeal rights, including provisions that:
- establish that the parties may opt out of any right to appeal an arbitral award;
- establish the right of appeal to the B.C. Court of Appeal.
The test for leave to appeal to the B.C. Court of Appeal has not been amended by the New Arbitration Act and remains a high bar. The party seeking leave must show that there is a question of law that is “sufficiently important” to the final result and that has “arguable merit, though the B.C. Court of Appeal grants discretion to deny leave (or to confirm, amend or set aside the arbitral award, or to remit the award to the arbitrator for reconsideration);
confirm that the B.C. Supreme Court retains the jurisdiction it had under the Previous Act to set aside arbitral awards on the basis of certain enumerated grounds related to procedural unfairness (for example, where the arbitration agreement is void, the arbitral award deals with a dispute not within the terms of the arbitration agreement, or, where a party was not given a reasonable opportunity to present its case);
- provisions expressly prohibiting the disclosure of confidential information. Under the New Arbitration Act, unless the parties agree otherwise, proceedings will be conducted in private and kept confidential (prohibiting the parties and arbitrator from disclosing information about the proceedings, evidence, documents and award); and
- provisions confirming that the parties may apply to the B.C. Supreme Court to recognize and enforce arbitral awards made in another Canadian jurisdiction.
Parties that are considering including arbitration clauses in their agreements and parties that are considering commencing arbitrations should carefully review the changes under the New Arbitration Act.