There are two different statutes that govern the recognition and enforcement of arbitral awards in Ontario depending on whether the arbitral award is domestic or foreign. Ontario’s Arbitration Act 1991 (“OAA”) governs domestic arbitral awards, while Ontario’s International Commercial Arbitration Act 2017 (“OICAA”) governs foreign awards. In addition, the Ontario Rules of Civil Procedure 1990 (“ORCP”) governs many procedural aspects of Ontario court proceedings, including the recognition and enforcement of arbitral awards.
There are some exceptions with respect to domestic arbitral awards. S. 2(1)(a) indicates that the OAA does not apply if its application is excluded by law. For example, s. 59.1 of the Ontario Family Law Act 1990 indicates that family arbitrations, and arbitration agreements in that area are governed by both the Family Law Act, and the OAA.
Part I of the OICCA directly imports the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted by the United Nations Conference on International Commercial Arbitration in New York on 10 June 1958 (“NYC”) into Ontario law, and Part II of the OICAA wholly implements the Model Law. As such, all provisions of the NYC, and the Model Law apply in Ontario with respect to the recognition and enforcement of foreign arbitral awards.
Canada is a party to the NYC, and it entered into force on 10 August 1986.
Canada did not make a reciprocity reservation under Art. I(3) of the NYC. However, Canada did make a commercial reservation pursuant to Art. I(3) of the NYC that applies to all Canadian jurisdictions, except for the Province of Québec.
Jurisdiction & procedure before court
Provincial superior courts and the Federal Court all have jurisdiction over applications for recognition and enforcement of arbitral awards.
The Federal Court’s jurisdiction only arises in matters where specific federal legislation applies. As provincial superior courts have inherent jurisdiction, they can hear cases pertaining to all areas of law, including applications for recognition and enforcement of arbitral awards, except where their authority is limited by statute.
In the context of Ontario, applications for the recognition and enforcement of both domestic and foreign arbitral awards are made to the Superior Court of Justice.
Pursuant to s. 50(1) of the OAA, a person can make an application to enforce an arbitral award made in Ontario, or elsewhere in Canada, to the Superior Court of Justice. In addition, applications for enforcement in the domestic context shall be made on notice against whom enforcement is sought. Family arbitration awards are an exception, and enforcement of such awards is governed by Ontario’s Family Law Act.
Pursuant to s. 3 of the OICAA, an application is to be made to the Superior Court of Justice for the recognition and enforcement of foreign arbitral awards.
There are almost no requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards in Canada.
In the Chevron Corp. v. Yaiguaje, 2015 SCC 42,  3 S.C.R. 69 case, the Supreme Court of Canada confirmed that a dispute, or judgment debtor does not need to have a “real and substantial connection” to the enforcing Canadian court, and that the applicant does not need to identify assets within the jurisdiction of the court. As Canada is a common law nation, the principle of stare decisis applies, and the above ruling is in turn applicable to all courts at the federal and provincial level.
The one requirement that does exist within the Canadian context is that of limitation periods. In Ontario, pursuant to s. 52(3) of the OAA, and s. 10 of the OICAA, the limitation period for applications for the enforcement (and recognition in the foreign context) of arbitral awards is 10 years.
In Ontario, the court fee to apply for recognition and enforcement of both domestic and foreign arbitral awards is $243.00 (approx. USD 185.00). This is a flat fee, and it is the same fee that is to be paid when submitting other documents to the court, such as a statement of claim, or notice of application. These fees are outlined in Ontario Regulation 293/92, which sets out the court fees pertaining to the Superior Court of Justice and Court of Appeal.
In Ontario, there is no specific regime governing the allocation of costs of an enforcement proceeding. S. 131 of the Courts of Justice Act 1990 (“OCJA”) gives Ontario courts discretion in allocating the costs of a court proceeding. Rule 57.01 of the ORCP outlines the general factors that a court may consider in awarding costs in civil litigation matters. These factors include: the complexity of the proceeding, the conduct of a party that tended to shorten or to lengthen unnecessarily the duration of the proceeding, and the apportionment of liability. In addition, Pursuant to Rule 57.01(2) of the ORCP, even if a party is successful, the court is not prevented from awarding costs against that party.
In Ontario, the proceedings are adversarial, and the ORCP governs the process. The opposing party must be served with certain materials prior to the commencement of the proceedings. The applicant must generally serve the notice of application at least 10 days prior to the hearing of the application, and the respondent must serve a notice of appearance in response (ORCP Rule 38.06 and 38.07).
Formal and practical requirements
As previously discussed, the OICAA directly imports the Model Law and the NYC into Ontario law. As such, documentation requirements in Ontario mimic both the UNCITRAL Model Law and the NYC. Pursuant to Article IV of the NYC, documentation requirements for the recognition of an arbitral award are as follows: 1) The duly authenticated original award or a duly certified copy thereof; and 2) the original arbitration agreement, or a duly certified copy thereof.
S. 50(2) of the OAA speaks to the documentation requirements for the recognition of domestic arbitral awards. The only requirement is the original award, or a certified copy of it.
Pursuant to s. 125(1) of the OCJA, the official languages of the courts in Ontario are English and French. Pursuant to s. 126(1) of the OCJA, the following documents may be written in French: 1) Pleadings or other documents filed by a party; and 2) A process issued in or giving rise to the proceeding. The court will provide translations of documents mentioned in s. 126(1) of the OCJA in either English, or French at the request of a party. Pursuant to s. 125(2)(b) of the OCJA, all other documents must be filed in the English language, or in their original language (including French) with an English translation that is certified by an affidavit of the translator. A similar official language translation requirement is also reflected in Article IV of the NYC.
As previously mentioned, Ontario courts can operate in both English and French. As such, documents and parties from other English and French speaking jurisdictions will mostly have access to court-provided translation, and interpreting services in Ontario.
Rule 15 of the ORCP outlines the requirements (or lack thereof) for representation by a lawyer in Ontario courts. Generally speaking, parties can represent themselves without a lawyer in Ontario courts. However, one of the exceptions to this rule is that of corporations. Pursuant to Rule 15.01(2), a party to a proceeding that is a corporation shall be represented by a lawyer, except if they have leave of the court. In addition, the ORCP defines a lawyer as a person authorized under the Law Society Act 1990 to practise law in Ontario. As such, an Ontario lawyer, or potentially a Canadian lawyer admitted to practice law in a different province (Rule 15.07), can represent a party in such a proceeding in Ontario courts. Foreign lawyers thus cannot represent parties in Ontario court proceedings.
Service of documents is governed by Rule 16 of the ORCP in Ontario. Pursuant to Rule 16.01(1), service of originating documents (including applications to enforce an arbitral award) are to be served personally, and are deemed to be effective on the same day of service. All other documents can be served through various other means, such as mail or courier. If a document is mailed, it is deemed to be effective 5 days after the document was mailed. Once a document is served, proof of service must be provided to the court. Proof of service is usually ascertained through an affidavit of service, where the server affirms that they have in fact served the documents.
In Ontario, ex juris service (the service of documents to a party in a region outside of the jurisdiction of the court) is governed by Rule 17 of the ORCP. Ex juris service of an originating process is permitted without a court order in all circumstances that are specifically outlined in Rule 17.02. Practically speaking, leave from the court will not be required if the service relates to a claim (e.g., the recognition and/or enforcement of an arbitral award) regarding judgments of courts outside Ontario, or claims that have a tangible connection to Ontario (e.g., contracts that were made in Ontario).
Canada is also a party to the Hague Service Convention 1965. Rule 17.05 of the ORCP incorporates the Hague Service Convention into Ontario law, and service should be conducted in accordance with the Convention if it is to be done in a contracting state.
As previously described, the enforcement of domestic arbitral awards is governed by the OAA, while the enforcement of foreign arbitral awards is governed by the OICAA (including the Model Law and the NYC by reference). There are very few and minor differences between the procedure involved in the enforcement of both domestic and foreign arbitral awards because of the general applicability of the ORCP.
One of the differences is the documentation requirements as described above. Pursuant to s. 50(2) of the OAA, only the original, or a certified copy of the award is required for enforcement proceedings of domestic awards. The OICAA has more documentation requirements. It requires (in accordance with Art. IV of the NYC): 1) the duly authenticated original award or a duly certified copy thereof; and 2) the original arbitration agreement, or a duly certified copy thereof.
In Ontario, courts can recognize and enforce partial and interim awards.
With respect to domestic arbitral awards, s. 50 of the OAA governs the enforcement of awards made in Ontario, and in Canada more broadly. No distinction is made between a partial, interim, or final award in the OAA. Therefore, as long as a decision that is made is an “award,” it will be treated just the same as a final award, and the courts can then enforce such an award, pursuant to s. 50 of the OAA.
As previously noted, the OICAA incorporated the Model Law into Ontario law. Art. 35 and 36 of the Model Law regarding the recognition and enforcement of arbitral awards does not make a distinction between partial, interim, and final awards. As such, Ontario courts can recognize and enforce arbitral awards based on the provisions detailed in Art. 35 and 36 of the Model Law, which equally apply to partial and interim awards.
The grounds on which a domestic arbitral award may be refused recognition in Ontario can be found in ss. 50(3) and (4) of the OAA.
For awards that are made in Ontario:
- the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed.
- there is a pending appeal, application to set the award aside or application for a declaration of invalidity.
- the award has been set aside or the arbitration is the subject of a declaration of invalidity.
- the award is a family arbitration award.
For awards that are made elsewhere in Canada:
- the period for commencing an appeal or an application to set the award aside provided by the laws of the province or territory where the award was made has not yet elapsed.
- there is a pending appeal, application to set the award aside or application for a declaration of invalidity in the province or territory where the award was made.
- the award has been set aside in the province or territory where it was made or the arbitration is the subject of a declaration of invalidity granted there.
- the subject-matter of the award is not capable of being the subject of arbitration under Ontario law.
- the award is a family arbitration award.
The grounds on which a foreign arbitral award may be refused recognition in Ontario can be found in Art. V of the NYC, and similarly in Art. 36 of the Model Law. Both provisions apply to Ontario through the OICAA.
The courts in Ontario (and in other Canadian provinces) take a restrictive approach when interpreting and construing the above-mentioned public policy violation defense. There are two persuasive cases which provide some insight into the high bar that is set with respect to the public policy violation defense.
The courts in the case of Schreter v. Gasmac Inc. [ (1992), 1992 CanLII 7671 (ON SC), 7 O.R. (3d) 608 (Gen. Div)], confirmed a restrictive approach. The court indicated that the public policy violation defense should only be used in cases that offend Ontario’s “local principles of justice and fairness in a fundamental way,” or in cases where the arbitral tribunal was ignorant or corrupt.
In the case of Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A., 1999 CanLII 14819 (ON SC), the court confirmed the approach from Schreter, and indicated that in order for the public policy violation defense to succeed, “the applicants must establish that the awards are contrary to the essential morality of Ontario.”
As can be seen, Ontario courts look at public policy from the perspective of the enforcing state and take its public policy into account when interpreting and construing the public policy violation defense. The above cases demonstrate the narrow approach that Ontario courts take in construing the defense.
Effects, remedies & procedural requests
A decision recognizing an arbitral award in Ontario is deemed to be the same as an order of the court. As such, the parties have access to the same remedies that would exist for court judgements.
The ORCP governs the enforcement of court orders in Ontario. There are a number of factors to consider in determining enforcement steps once a judgment is rendered in Ontario. In addition, a judgment may also require leave to be appealed. This also depends on several factors.
Generally speaking, a party has 15 days to request leave to appeal. Although an Ontario court judgment has immediate effect, pursuant to Rule 63 of the ORCP, the delivery of a notice to appeal stays any provision of an order for the payment of money until it is resolved.
As such, although arbitral awards are immediately enforceable, any enforcement actions will generally be stayed until the appeal process is resolved for both domestic and foreign arbitral awards.
Decisions of the Superior Court of Justice regarding the recognition and/or enforcement of both domestic and foreign arbitral awards are generally appealable to either the Divisional Court (a branch of the Superior Court of Justice), or to the Court of Appeal for Ontario. Whether leave to appeal is required depends on the factors and requirements outlined in the OCJA and the ORCP. Factors include the value of the judgment, or whether the order was made with the consent of the parties. If leave is granted, or not required, then the matter can be appealed to the relevant court.
The above explanation regarding available remedies for decisions recognizing an arbitral award equally applies to decisions refusing to recognize arbitral awards in Ontario.
Set-off claims are not specifically addressed in the relevant legislation for enforcement proceedings.
A case of note regarding set-off claims is that of Abittan v Wilcox, 2020 ONSC 6836 (CanLII), where a domestic arbitral award was enforced pursuant to the OAA. In this case, the award-debtor had a set-off argument rejected by the court. Although the award-debtor had claims against the award-creditor, the court found that the mandatory basis of s. 50(3) of the OAA (where it is the duty of the court to enforce an award, except in limited circumstances) cannot be derogated from in favor of a set-off claim, even if well-founded. Thus, in the domestic arbitration context, the Abittan case has demonstrated that the prevailing position under Ontario law appears to be that set-off claims may not be possible. However, due to the limited availability of judgments regarding this subject matter, time will only tell how the case law will develop.
As the NYC is incorporated into Ontario law through the OICAA, courts in Ontario must comply with Art. V of the NYC. Ontario courts therefore have the discretion to recognize and enforce an award even if it has been fully or partially set aside at the seat of arbitration. As the Model Law also applies to Ontario, in the Schreter case, the courts concluded that the grounds for refusing recognition of an award under Art. 36 of the Model Law allow for Ontario courts to recognize and enforce awards that may have been set aside at the seat of arbitration.
Interim measures against assets are available in Ontario for both domestic and foreign arbitration. Pursuant to s. 8(1), and 18(2) of the OAA, courts can make interim measures during enforcement proceedings, and they retain their same powers regarding the preservation of property in these circumstances as they would in other court proceedings.
Pursuant to Arts. 9 and 17 H.-J. of the Model Law (Ontario adopted the 2006 amendments to the Model Law through the OICAA), courts also have the power to order interim measures in foreign arbitration matters.
Interim measures at the disposal of Ontario courts can be found in the relevant sections indicated above. These measures include detention, preservation, and inspection of property, as well as interim injunctions.
In addition, pursuant to s. 101 of the OCJA, and Rule 40 of the ORCP, interlocutory injunctions can be applied for prior to, or during award recognition and enforcement court proceedings.
Rule 56.01 of the ORCP outlines how and when the court can make an order for security for costs in Ontario court proceedings, which equally applies in domestic award enforcement proceedings. Pursuant to Rule 56.01(1), the court may make such an order where it appears that:
(a) the plaintiff or applicant is ordinarily resident outside Ontario.
(b) the plaintiff or applicant has another proceeding for the same relief pending in Ontario or elsewhere.
(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part.
(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent.
(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent.
(f) a statute entitles the defendant or respondent to security for costs.
For foreign arbitral awards, Art. 36(2) of the Model Law indicates that Ontario courts may order security if the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made. As such, the applicable law for security for costs relating to foreign arbitral awards in Ontario courts is Art. 36(2) via Art. 36(1)(a)(v) of the Model Law, which provides for narrower criteria for security for costs than those listed in Rule 56 of the ORCP.