Case information

Civil procedure — Arbitration award — Arbitrator — Abuse of procedure and dismissal of proceedings — Res judicata — Whether courts may dismiss and declare extracontractual claim submitted to courts for first time on basis of authority of res judicata without examining triple identity and requirement of doctrine of res judicata — Whether courts may raise on their own initiative and rule ultra petita on authority of res judicata — Effect of art. 8 of UNCITRAL Model Law on International Commercial Arbitration and its counterpart art. 622 of Code of Civil Procedure (C.C.P.) in context of international commercial arbitration — Whether art. 625(1) of C.C.P. is limited to circumstances set out in its second paragraph — Whether declaration of abuse and monetary award for abuse of procedure under art. 54 of C.C.P. may be made on prospective basis — Whether courts may proceed with consolidation of proceedings ultra petita and without parties’ knowledge — Whether courts may award additional indemnity (art. 1619 of Civil Code of Québec (C.C.Q.)) ultra petita — Whether application for intervention of court during international commercial arbitration that is moot before court makes its ruling, or that is dismissed at preliminary stage, constitutes bar or absolute presumption to application for annulment of arbitration award on basis of authority of res judicata — Whether application for annulment of arbitration award for at least one ground recognized as valid and sufficient by case law can constitute objectively wrongful fault amounting to abuse of procedure within meaning of art. 51 C.C.P. — Whether judge can completely alter nature of proceeding to conclude that action is clearly unfounded without examining law applicable to action as instituted — Whether arbitrator’s failure to rule on recusation request made to them before making arbitration award putting end to arbitration proceedings is contrary to public order or constitutes valid ground for annulment of arbitration award —Whether application of art. 2895 C.C.Q. is subject to discretion of courts — Whether application pursuant to art. 56 C.C.P. requires formal service with summons to director, whether director must be designated as party to application for dismissal for abuse of procedure and whether order to pay is automatic when there is only one director or distinction needs to be made or criteria need to be respected to issue such order —Code of Civil Procedure, CQLR, c. C 25.01, art. 51.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant B Smart Technologies Inc. (B Smart) filed numerous proceedings before the courts in connection with an arbitration award made in the context of a dispute with the respondent, Norstan Communication Inc. (Norstan), for commissions that it claims are owing to it and that were not paid by Norstan. The contract binding the parties contained an arbitration clause pursuant to which the parties were to resolve by way of arbitration any dispute concerning the contract in accordance with the rules of the American Arbitration Association (AAA). An arbitrator was assigned in March 2019, and arbitration proceeded smoothly in the months that followed until the arbitrator rendered certain decisions regarding the disclosure of evidence. B Smart apparently then started to try to have the arbitrator disqualified from the case by raising a lack of impartiality and irregularity in their appointment. In October 2020, the arbitrator informed the parties that the arbitration would be suspended because the arbitration fees had not been paid by B Smart, which was given formal notice to pay them by November 16, 2020, in accordance with rule R 57(e) of the AAA rules. After several extensions provided at the request of B Smart, the arbitrator finally rendered, on September 1, 2021, procedural decision No. 13, which ended the arbitration because of B Smart’s failure to pay and in accordance with rule R 57(f) of the AAA rules. In November 2020, B Smart filed a first action in the Superior Court against the AAA, the arbitrator and Norstan, as impleaded party, in order to obtain the revocation of the arbitrator assigned and to prevent the inevitable end of the arbitration because of its own failure to pay the arbitration fees. On May 3, 2022, the Honourable Mark Phillips J.S.C. dismissed that action in its entirety. B Smart appealed the “Phillips” judgment, and the Court of Appeal allowed the application to dismiss the appeal filed by the AAA and the arbitrator, on the ground that the appeal had no reasonable chance of success. On September 24, 2021, B Smart initially filed an application before the Court of Québec, which was ultimately referred to the Superior Court. In its generality, that application sought to obtain the annulment of the arbitration clause and the authorization to assert its claim before the Quebec authorities and failing that, an order compelling the parties to appoint a new arbitrator. Allegations the same as those raised in the case that led to the “Phillips” judgment against the arbitrator, the AAA and Norstan were again raised. B Smart also filed another application on November 29, 2021, before the Superior Court in order to challenge, once again, the arbitration award, despite the “Phillips” judgment. The same allegations of bias, non compliance with the AAA rules and unreasonableness of the arbitration clause, raised in the context of the other files, were again raised. The Superior Court allowed in part the applications for dismissal and for a declaration of abuse and dismissed and declared abusive B Smart’s originating applications. The Court of Appeal denied leave to appeal.