Re Corporacion Transnacional de Inversiones, S.A. de C.V. et al. and STET International, S.p.A. et al. [Indexed as: Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A.]
49 O.R. (3d) 414
[2000] O.J. No. 3408
Nos. C32966 and C32548
Ontario Court of Appeal
Catzman, Abella and Rosenberg JJ.A.
September 15, 2000
*Application for leave to appeal to the Supreme Court of
Canada dismissed with costs May 3, 2001 (Gonthier, Major and
Binnie JJ.). S.C.C. File No. 28237. S.C.C. Bulletin, 2001,
p. 821.
Arbitration -- Award -- UNCITRAL Model Law on International Commercial Arbitration -- Application to set aside arbitration award -- Grounds for setting aside arbitration award -- Standard of review -- International Commercial Arbitration Act, R.S.O. 1990, c. I.9.
NOTE: An appeal of the judgment of the Superior Court of Justice (Lax J.), reported at 1999 ON SC 14819, 45 O.R. (3d) 183, to the Court of Appeal for Ontario was dismissed on September 15, 2000. The endorsement of the court is as follows:
Burton Tait, Q.C., Harry C.G. Underwood and Thomas N.T. Sutton, for appellants. William G. Horton and Catherine Beagan Flood, for respondents.
1BY THE COURT: -- We agree with the reasons of Lax J. (now reported at 1999 ON SC 14819, 45 O.R. (3d) 183) subject to the following comments. The focus of the appellants' attack on the reasons of Lax J. was her application of the test for "public policy" from Boardwalk Regency Corp. v. Maalouf (1992), 1992 ON CA 7573, 6 O.R. (3d) 737, 88 D.L.R. (4th) 612 (C.A.) to Article 34(b)(ii) of the UNICTRAL Model Law on International Commercial Arbitration (the "Model Law"), brought into force in Ontario by the International Commercial Arbitration Act, R.S.O. 1990, c. I.9. The appellants argue that the test of "morality" in Boardwalk Regency, a case dealing with enforcement in Ontario of a debt incurred as a result of gambling in another jurisdiction, is inappropriate in this context. The appellants also argued that Lax J. erred in failing to find that the appellants had been unable to present their case within the meaning of Article 34(a)(ii) of the Model Law.
2We do not find it necessary to decide whether the test in Boardwalk Regency is applicable to the review of an arbitral award under Article 34(b)(ii). The appellants accepted the statement of principle by Feldman J. in Schreter v. Gasmac Inc. (1992), 1992 ON SC 7671, 7 O.R. (3d) 608 at p. 623, 89 D.L.R. (4th) 365 (Gen. Div.):
The concept of imposing our public policy on foreign awards is to guard against enforcement of an award which offends our local principles of justice and fairness in a fundamental way, and in a way which the parties could attribute to the fact that the award was made in another jurisdiction where the procedural or substantive rules diverge markedly from our own, or where there was ignorance or corruption on the part of the tribunal which could not be seen to be tolerated or condoned by our courts.
(Emphasis added)
3We are satisfied that the procedure followed by the tribunal did not offend our principles of justice and fairness in a fundamental way. We are also satisfied that the appellants were not deprived of an adequate opportunity to present their case. Because we essentially agree with the reasons of Lax J. we find it necessary only to deal briefly with the appellants' two principal complaints.
Disclosure of the UTISA/STET Agreements
4We are satisfied that the manner in which the UTISA/STET agreements were to be disclosed did not infringe the principles of fundamental justice nor deprive the appellants of the opportunity to present their case. Prior to the final hearing, the tribunal ordered that the respondents disclose information concerning the agreements whether or not the appellants had signed a confidentiality agreement. The respondents provided this information to the appellants and the tribunal found that the respondents had complied with its order. The appellants made no complaint about the disclosure at the final hearing. They now argue that only full and timely disclosure of the actual agreements could meet the principles of fundamental justice. There are at least three problems with these submissions.
5First, the agreements could have been obtained by the execution of a confidentiality agreement. The appellants made no good faith attempt to pursue this avenue for obtaining the agreements. They raised spurious objections to the respondents' form of confidentiality agreement and did not provide an alternative form of agreement to the respondents.
6Second, as Lax J. said, "how can it be said that the [appellants] were denied equality of treatment or that the tribunal acted in a manner inconsistent with Ontario public policy when the tribunal was never asked to determine the relevancy of the redacted portions or to order their production?"
7Finally, had the appellants not withdrawn from the arbitration, they would have had the same access to the information, including the agreements, as did the tribunal during the testimony of the respondents' witness. This is not speculation, as argued by the appellants. It follows from the terms of Article 25(c) of the Model Law and Article 15(2) of the International Chamber of Commerce Rules of Arbitration. The latter provides that if one of the parties is absent without valid excuse the arbitrator shall proceed with the arbitration and "such proceedings shall be deemed to have been conducted in the presence of all parties". It hardly offends our notions of fundamental justice if a party that had the opportunity to present its case and meet the opposing case forfeits that opportunity by withdrawing from the arbitration. This argument is entirely without merit.
The Cuban Witnesses
8We are also satisfied that in the circumstances, and given the tribunal's right to control its own procedure and ensure the orderly conduct of the arbitration (albeit in a manner consistent with Article 18), there was no breach of the principles of fundamental justice because of the absence of the Cuban witnesses. We reject the submission that the appellants' counsel was misled by the May 8 letter from the chairman. As Lax J. held, the tribunal had no power to compel evidence from Cuban witnesses nor to issue letters rogatory. The appellants' right to apply to the Ontario courts for letters rogatory to obtain the Cuban evidence did not depend upon interpretation of Ontario law but flowed from Article 27 of the Model Law. There was no evidence placed before Lax J. or this court that the appellants' counsel was unaware of the contents of the Model Law.
9Moreover, it was open to the tribunal to find that the appellants had been given an adequate opportunity to obtain this evidence in one form or another. Well before the final hearing, the tribunal had proposed a variety of alternatives so that the evidence could be produced. The appellants made no attempt to obtain a further adjournment of the hearing to pursue attempts to obtain the Cuban evidence. Rather, they withdrew from the arbitration on the basis that there had been a settlement. The tribunal's response to the appellants' attempts to obtain the Cuban evidence did not breach the principles of fundamental justice nor offend public policy.
10Accordingly, the appeal is dismissed with costs.
