September 1, 2020 was a historic day for domestic arbitration in British Columbia for three reasons:
- The BC International Commercial Arbitration Centre changed its name and became the "Vancouver International Arbitration Centre" (referred to as "VanIAC");
- The province's new Arbitration Act (the "New Act") came into force; and
- VanIAC's updated domestic arbitration rules came into force (the "New Rules").
In this blog, we set out what you need to know about the New Rules. The New Act was addressed in a previous blog post.
The New Rules are intended to be read harmoniously with the New Act and further modernize the domestic arbitration regime in British Columbia. The updates to the New Rules include emergency relief procedures, specialized rules for document production, expedited procedures and virtual proceedings.
With courts now facing more backlogs due to COVID-19, like the New Act, the New Rules will help to provide alternative means to resolve of commercial disputes.
Emergency Relief Procedures
A substantial update in the New Rules is the introduction of emergency relief procedures. These new provisions allow a party to apply for emergency interim measures and preliminary orders before the constitution of an arbitral tribunal.
A party may apply for an interim measure by delivering an application to VanIAC and all other parties, concurrent with or following the delivery of a Notice to Arbitrate. Upon an application for an emergency interim measure, VanIAC will appoint the emergency arbitrator within two days, and a procedural schedule for the emergency proceeding will be issued three days after the arbitrator's appointment.
An application for an emergency preliminary order (directing a party not to frustrate the purpose of the interim measure) can be made at the same time as the emergency interim measure, and the emergency arbitrator shall establish the procedure for the emergency preliminary order. Such an application would be done in order to direct a party not to frustrate the purpose of the interim measure.
The New Rules contain provisions for challenging an emergency arbitrator. A challenged emergency arbitrator may withdraw or decide on the challenge.
An emergency arbitrator's decision will take the form of an interim measure or preliminary order, and it must be issued within 15 days of appointment and shall be binding on the parties (subject to modification by the emergency arbitrator or arbitral tribunal).
The New Rules contain specific provisions for virtual procedures, which are particularly timely given the circumstances caused by the COVID-19 pandemic. They will also be useful in the future as parties become accustomed to remote hearings.
A virtual hearing may be held upon the agreement of the parties or at the tribunal's direction. Among other things, the tribunal may determine the video conferencing platform to be used, including the use of virtual breakout rooms for each party and the simultaneous viewing of documents.
Importantly, the New Rules specifically mandate who may attend or access a virtual hearing, which helps ensure the confidentiality of arbitral proceedings.
Conduct of the Proceedings
The New Rules contain a series of new provisions governing the conduct of proceedings, including witness statements, exchange of materials, and production of documents.
Practitioners should pay particular attention to the provisions regarding the production of documents. The New Rules specifically state that the oral and documentary discovery procedures developed for court are "generally not appropriate procedures for obtaining documents and information in an arbitration".
The New Rules provide that requests for documents shall not be made until there has been an exchange of written arguments, witness statements and supporting documentation, and that requests for electronic document searches must be narrowly focused and structured to enable the efficient searching of databases.
The New Rules also contain substantive guidance on whether the tribunal should order the production of documents, which helps ensure efficiency and proportionality. A tribunal shall not order production of the requested documents if it is satisfied that: (i) production of the requested documents would impose an unreasonable burden on the responding party; (ii) the documents are protected by any applicable privilege; or (iii) there are compelling considerations of confidentiality, procedural economy, proportionality, fairness or equality of the parties upon which production should be refused.
An important feature of the New Rules is expedited procedures for claims under $250,000 or if the parties agree.
Under these expedited procedures, the timelines for submitting statements and pleadings are shortened - all written material is to be exchanged no later than 90 days from the appointment of the tribunal. The default position is to have no oral hearing. However, the tribunal has the discretion to order an oral hearing. Even if an oral hearing is ordered, it must be a maximum of one day.
The tribunal is to issue an award within 30 days from the receipt of the last written material (45 days if there was an oral hearing). There will be no appeal on a question of law from an award issued under the expedited procedure.
Similar to the previous rules, the New Rules provide parties the option of appealing to an appeal tribunal on a question of law. However, this remedy is only available where the parties have expressly agreed in their arbitration agreement to an appeal to VanIAC's appeal tribunal, or if all parties consent to it after the arbitration.
On appeal, the appeal tribunal may confirm, vary or amend the award and make an award of costs. For certain types of disputes, resort to an appeal tribunal may provide a more efficient and confidential means to review arbitral awards than pursuing an appeal under the New Act (which is to the British Columbia Court Appeal).
One of the key changes in the New Act is that VanIAC will exercise statutory responsibilities as the "designated appointing authority". What this means is that VanIAC will have certain responsibilities under the New Act, including in proceedings where the New Rules and VanIAC does not administer the proceedings.
This new role for VanIAC is reflected in the New Rules. As designated appointing authority, VanIAC will carry out the following duties:
- appointing arbitrators where the parties fail to agree;
- determining fees and expenses payable to an arbitrator if there is a dispute; and
- directing the tribunal to deliver an award on terms if there is a dispute regarding the arbitrator's fees and expenses.
With the New Rules, New Act and VanIAC's new name, the overhaul of the domestic arbitration regime is now complete. Parties and practitioners should all benefit from these updates, which have brought British Columbia in line with international best practices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.