International arbitration continues to grow in popularity as an alternative form of dispute resolution. Parties routinely cite cost-savings, efficiency, autonomy, and expertise as the advantages of arbitration over civil proceedings in foreign jurisdictions. It is not enough to settle on arbitration as the method of dispute resolution, however. Parties must also determine the arbitral "seat".
Generally, the "seat" refers to the city and the "law of the seat" refers to the seat's legal jurisdiction. The seat does not necessarily have to be in the same jurisdiction as the governing law of the contract, nor does it have to be the city where the hearing itself takes place. The seat may also impact the manner in which the arbitration is conducted. Accordingly, choosing the seat is an important decision when entering into an arbitration agreement. A post setting out important considerations when making this decision can be found here: " Top 3 Considerations for Selecting an Arbitral Seat".
In this blog post, we explore why Toronto, Ontario is well-situated to serve as the seat for international commercial arbitrations.
A World-Class Arbitral Seat without the Price Tag
Toronto's international reputation requires little introduction. One of the most multicultural cities in the world, Toronto is also the second largest financial centre in North America and the fourth most populous city on the continent. Toronto's status as Canada's financial and business capital makes it an attractive alternative to historically popular seats such as London, Paris, Hong Kong, and New York. Further, Toronto's stability may further its desirability as an arbitral seat following recent developments in jurisdictions home to the traditionally popular seats.
Toronto is also a financially sensible choice. Parties to an arbitration agreement can be confident that the city has the infrastructure and ancillary services required to maximize the benefits of arbitration at a comparatively lower cost than venues in the United States and across Europe. This is a significant benefit for parties attracted to arbitration for its cost-saving benefits.
A Modern Statutory Regime for Arbitration
Canada's status as a front-runner in international arbitration follows its adoption of the United Nations Commission on International Trade Law's (UNCITRAL) UNCITRAL Model Law in 1986, the first state in the world to do so. Canadian jurisdictions have continued to proactively improve their arbitration regimes since then. Ontario, in particular, harmonized its regime with global best practices through the enactment of the International Commercial Arbitration Act, 2017. This enactment adopts the 2006 amendments to the UNCITRAL Model Law.
In addition to adopting best practices, the Act gives effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, more commonly known as the New York Convention. Ontario has provided parties to arbitration agreements with greater certainty regarding the province's international arbitral award enforcement scheme by integrating the New York Convention. Those who designate Toronto as the arbitral seat for their agreements can be confident that the regime governing future disputes and arbitral awards is among the best in the world.
A Sophisticated Judiciary
Canada's judiciary is recognized internationally for its independence and its competence. These qualities should provide parties to an arbitration with confidence when choosing an arbitral seat in Canada. Courts in Toronto (the Ontario Superior Court of Justice and the Ontario Court of Appeal) in particular routinely preside over complex commercial litigation and, if called upon, are well-equipped to serve in a supervisory role for complex international arbitrations. Substantively, it is now a hallmark of Ontario jurisprudence to respect arbitration as the parties' chosen method of dispute resolution. Ontario courts, and courts across Canada for that matter, have similarly demonstrated a pro-arbitration stance by giving effect to foreign arbitration agreements and arbitral awards.1 These judicial developments are in accordance with provincial efforts to improve Ontario's arbitration regime.
Parties that select Toronto as the seat for their arbitration agreements also have the distinct benefit of a judiciary that has left a significant imprint on the development of international arbitration law. Canadian courts are the second greatest contributor to case law on UNCITRAL legal texts, ahead of arbitration hotspots including the United Kingdom, France, Spain, Switzerland, Hong Kong, and the United States. Ontario alone has contributed more case law to the development of international arbitration law than the Netherlands, New Zealand, and Singapore.2 The Ontario judiciary has built an institutional competency for arbitral matters that should be an attractive consideration when choosing the seat for an arbitration agreement.
The Bottom Line
The combination of Toronto's well-established international profile, its modern arbitration regime, and exceptional jurists make it an attractive choice for the seat in any arbitration agreement. Other benefits, including comparative cost-savings and geopolitical stability similarly affirm the value of making Toronto the seat in any future arbitration agreements.
1. For an
example of a recent decision from the Court of Appeal for Ontario
strengthening Ontario's role as a leading jurisdiction in
international commercial arbitration, see Andrew Kalamut and Claire
Seaborn, "Ontario Court of Appeal assesses the enforceability
of arbitral awards in Popack v Lipszyc" (19 September
2018), online: The International Arbitration Blog:
Nations Commission on International Trade Law, "Case Law on
UNCITRAL Texts (CLOUT)", online: CLOUT Documents
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