Canada / 06 March 2003 / Canada, Supreme Court of British Columbia / Eddie Javor v. Luke Francoeur / L022829
| Country | Canada |
| Court | Canada, Supreme Court of British Columbia |
| Date | 06 March 2003 |
| Parties | Eddie Javor v. Luke Francoeur |
| Case number | L022829 |
| Applicable NYC Provisions | II | II(2) | III | IV | IV(1) | IV(1)(b) | V | V(2) | V(2)(a) | V(2)(b) |
| Source |
2003 BCSC 350 | online: CanLII |
| Languages | English |
| Summary | The Claimant, Javor, entered into an agreement with Fusion-Crete Products Inc. (“Fusion-Crete”) containing a clause providing for arbitration pursuant to the Rules of the American Arbitration Association. During the course of the arbitration, the arbitrator made a finding that the Respondent, Francoeur, was the alter-ego of Fusion-Crete and ordered the addition of Francoeur as a party to the proceedings and eventually held Francoeur personally liable for damages awarded against Fusion-Crete. Javor sought enforcement before the Supreme Court of British Columbia. Francoeur opposed enforcement on the grounds that (i) the British Columbia Foreign Arbitral Awards Act (“FAAA”), which has as its Schedule and implements the NYC, and the International Commercial Arbitration Act (“ICAA”), which implements the UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”), did not apply to “non-parties” to the agreement; (ii) the arbitral procedure was not in accordance with the parties’ agreement; (iii) the subject-matter of the dispute was not capable of settlement by arbitration under the laws of British Columbia and the award should therefore not be enforced pursuant to Article V(2)(a) FAAA (which mirrors Article V(2)(a) NYC) and the ICAA; and (iv) the recognition of the award was contrary to public policy pursuant to Article V(2)(b) of the FAAA (which mirrors Article V(2)(b) NYC) and the ICAA. The Supreme Court of British Columbia denied the application to enforce the award. It considered that Javor was required to show that the arbitration award it sought to enforce fell clearly within the provisions of the FAAA or the ICAA. Referring to Articles II, III, IV and V of the FAAA (which mirror Articles II, III, IV and V NYC), and Sections 2(1) and 7(1) of the ICCA, the Court noted the overall similarity between the two statutes, and that they were identically worded in several instances. The Court considered that the existence of an arbitration agreement is the common foundation upon which each of the statutes rests, and that their obvious goal was to allow enforcement of an award against a party signatory to the agreement. On this basis, the Court concluded that it is the intention of both the FAAA and the ICAA to limit enforcement of awards to the parties to the arbitration agreement, and that because Francoeur was not a named party or signatory to the agreement, an award for costs could not be enforced against him. The Court rejected Javor’s argument that the lack of the definition of a “party” in the FAAA entailed that awards could be enforced against persons procedurally added as parties during arbitration. It noted that Article II(2) of the FAAA (which mirrors Article II(2) NYC) referred to an arbitration agreement “signed by the parties” and that the requirement under Article IV(1)(b) FAAA (which mirrors Article IV(1)(b) NYC) to supply an original or certified copy of the arbitration agreement appeared to be directed to the ability of the court to verify the signatory parties and the existence of an arbitration clause within that agreement. The Court accepted Francoeur’s defence to enforcement based on Article V(1)(d) of the FAAA (which mirrors Article V(1)(d) NYC), considering that the agreement of the parties did not provide for the involvement of Francoeur in the arbitration and therefore the procedure employed by the arbitrator was inconsistent with the arbitration agreement. The Court also exercised its discretion to accept Francoeur’s defense to enforcement based on Article V(2)(a) of the FAAA (which mirrors Article V(2)(a) NYC), considering that because Francoeur was not a proper party to the arbitration clause, pursuant to British Columbia law the claim against him for personal liability could not properly have been a subject of the arbitration, but would rather be a matter for judicial determination. Finally, the Court declined to reach a decision concerning Francoeur’s objection that the enforcement of the award would violate public policy pursuant to Article V(2)(b) of the FAAA (which mirrors Article V(2)(b) NYC), considering that it had not been able to gauge sufficiently the strength of the evidence that led the arbitrator to find that Francoeur was the alter ego of Fusion-Crete. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
