Canada / 11 March 2008 / Canada, Cour d’appel du Québec / Smart Systems Technologies Inc. v. Domotique Secant Inc.
| Country | Canada |
| Court | Canada, Cour d’appel du Québec |
| Date | 11 March 2008 |
| Parties | Smart Systems Technologies Inc. v. Domotique Secant Inc. |
| Source |
2008 QCCA 444 | online: CanLII |
| Languages | English |
| Summary | Dominique Secant Inc. (“Secant”) and Smart Systems Technologies Inc. (“Smart Systems”) entered into a contract which contained a clause providing for arbitration in accordance with the 1985 UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”). Disputes arose in 2000 and 2001 and an arbitral award was rendered in New Mexico in favour of Smart Systems, who then applied to a U.S. District Court for an order confirming the award, which it obtained. Secant sought annulment of the award before the Cour supérieure du Québec (Quebec Superior Court). Smart Systems filed a plea and cross-demand for the homologation of both the award and a judgment ratifying the award. However, after the award was confirmed by the U.S. District Court, Smart Systems amended its plea and cross-demand in order to withdraw its request for homologation. The Cour supérieure denied recognition and enforcement because the arbitration award failed to state reasons. Smart Systems then sought the homologation of the award before the Cour d’Appel du Québec (Quebec Court of Appeal). Secant opposed the homologation, arguing, inter alia, that (i) by referring to the UNCITRAL Model Law, the parties had agreed that the arbitrators would render an award that included the reasons for their decision; (ii) the award was beyond the scope of the arbitration agreement; (iii) the award was so imprecise that it could not be enforced; (iv) one of the arbitrators had improperly communicated with Smart Systems on several occasions; and (v) the award was contrary to public policy. The Cour d’appel du Québec denied recognition and enforcement based on the provisions of the Code de procédure civil (“CPC”). The Cour d’Appel agreed with Smart Systems that public policy, as referred to in Article 949 CPC (which mirrors Article V(2)(a)(b) NYC), should be applied with reference to international practice. Therefore, despite the fact that Quebec law required an award to state reasons, the failure to do so is not ipso facto a violation of international public policy. The Cour d’appel considered that the parties, however, had agreed that the award would state reasons through the applicable arbitration rules. It thus concluded that the lack of reasons was contrary to public policy. Additionally, the Cour d’appel considered that even aside from issues of public policy, it would seem manifest that the request could be denied based on Article 950(4) CCP (which mirror Article V(1)(c) NYC), because the arbitrators had cancelled ab initio the parties’ contract when this was not required of them and had awarded punitive damages beyond their jurisdiction. Enforcement could also be denied based on Article 950(5) CPC (which mirrors Article V(1)(d) NYC), because the arbitrator chosen by the appellant had communicated with the appellant while the arbitrators were deliberating. Finally, the Cour d’appel rejected Smart Systems’ contention that Secant could no longer oppose recognition and enforcement because it had failed to appear in the confirmation proceedings before U.S. District Court, where it could have raised this objection. The Cour d’appel held that since Article 948 CPC allowed recognition and enforcement of an award without considering if the award had been confirmed or not, the Court had the power to deny recognition and enforcement even if the award had already been confirmed in another jurisdiction. |
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Attachment (2)
 Official Translation Adobe Acrobat PDF | Original Language Adobe Acrobat PDF |
