Court of Appeal for Ontario

Date: November 23, 2018 Docket: C65357

Judges: Strathy C.J.O., Benotto and Roberts JJ.A.

Between

The Walt Disney Company Applicant (Appellant)

and

American International Reinsurance Company, Ltd., as successor to Chartis Excess Limited Respondent

Counsel

For the Appellant: Timothy M. Lowman and L.E. Trent Horne

For the Respondent: James W.E. Doris and Derek D. Ricci

Heard: November 21, 2018

On appeal from: The order of Justice Andra Pollak of the Superior Court of Justice, dated April 12, 2018.

Appeal Book Endorsement

[1] The application judge dismissed the appellant's request for an order declaring that it had properly commenced an arbitration between the parties by written demand dated October 6, 2017.

[2] The arbitration clause in the insurance contract provided that the insured (the appellant) could select the venue and procedural laws of Bermuda or any one of London, Toronto or Vancouver under the English Arbitration Act of 1996 ("the Act"), which was incorporated by reference into the clause.

[3] The appellant submits that the correct interpretation of the contract is that the parties incorporated the Act by reference, but that by virtue of s. 2 of the Act, the procedural provisions of Part I were excluded, save for certain provisions specifically identified in s. 2. In effect, it submits that the entire Act was incorporated by reference, but that by its express terms, the procedural provisions are inapplicable to arbitrations outside the UK. It submits that the application judge erred in finding that s. 14(4) of the Act applied to the commencement of the arbitration and that instead, the UNCITRAL Rules set out in Ontario's International Commercial Arbitration Act would apply.

[4] We disagree. In our view, the plain wording of the contract required that where Toronto was the seat chosen for arbitration, the arbitration was to be conducted in accordance with the procedural laws set out in the Act. The interpretation advanced by the appellant does not make commercial sense because it would mean that different procedural laws would apply depending on whether the arbitration took place in Toronto or Vancouver. Moreover, it makes no sense that the parties would agree to have an Ontario court apply specific provisions of the Act relating to the matters set out in s. 2(2), (3) of the Act.

[5] It follows that we agree with the result arrived at by the motion judge, notwithstanding that it may have been based on a misapprehension of the positions of the parties.

[6] Assuming we have jurisdiction to determine whether the arbitration has been properly commenced, we decline to do so. Should it be necessary to determine whether the arbitration has been properly commenced, and if so when, that is a question reserved to the arbitrators.

[7] We therefore agree with the disposition made by the application judge. The appeal is dismissed, with costs to the respondent, fixed at $10,000, inclusive of disbursements and all applicable taxes.