Pam Pengelley

Electek Power Services Inc. sought full indemnity costs of $616,312.06 for an arbitration hearing and a subsequent court application to set aside an arbitral decision on jurisdiction.

The court had previously granted Electek's application, finding the arbitrators erred in assuming jurisdiction.

Greenfield Energy Centre Limited Partnership proposed a lower partial indemnity award of $145,000.

The court awarded Electek $425,000 in total, comprising $300,000 for the arbitration and $125,000 for the court application, both on a partial indemnity basis, finding no conduct warranting a punitive or full indemnity award.

The applicant brought an application under s. 17(8) of the Arbitration Act, 1991 to set aside an arbitral tribunal's preliminary ruling that it had jurisdiction to decide a dispute between the parties.

The dispute arose from emergency repair work performed by the applicant at the respondent's power plant, which allegedly caused $10 million in damages.

The respondent initiated arbitration based on a 2009 'Purchase Order General Terms and Conditions' document signed by the applicant.

The court conducted a hearing de novo and found that the 2009 document was an inchoate agreement that was never incorporated into the 2018 purchase order for the repair work.

Applying the objective theory of contract formation, the court concluded there was no consensus ad idem regarding an arbitration agreement.

The arbitral tribunal's decision was set aside for lack of jurisdiction.