By Katherine MacKenzie
In April 2019, the Alberta Law Reform Institute (ALRI) published Final Report 114: Uniform International Commercial Arbitration. This report recommends changes to international commercial arbitration practice in Alberta.
International commercial arbitration is an alternative dispute resolution mechanism generally used in business transactions that involve a foreign element. It is a consensual process whereby international parties agree to submit their dispute for adjudication by a neutral, third party decision maker. One of the main advantages of international commercial arbitration is that it allows parties to avoid litigating their disputes before foreign courts.
Alberta’s Current Framework
In Alberta, the practice of international commercial arbitration is currently governed by three sources. Alberta’s International Commercial Arbitration Act (the Alberta Act) establishes the basic legislative framework for the conduct of international commercial arbitration in this province. Enacted in 1986, the Alberta Act implements two United Nations initiatives – the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the United Nations Commission on Trade Law Model Law on International Commercial Arbitration (the Model Law).
The New York Convention establishes the rules by which jurisdictions will summarily recognize and enforce foreign arbitral awards, while the Model Law sets out the fundamental rules for conducting international commercial arbitrations. Both the New York Convention and the Model Law are appended as schedules to the Alberta Act.
Why is Reform Required?
Alberta law should provide for the most effective and modern international commercial arbitration system. Unfortunately, the Alberta Act is outdated. It was enacted in 1986 and has not been significantly updated since. Further, in 2006, the United Nations Commission on Trade Law made amendments to the Model Law, which have never been formally incorporated into Alberta law. The absence of the 2006 amendments has put Alberta’s reputation as a Model Law jurisdiction at risk. As such, the main impetus for reform is to implement the 2006 amendments made to the Model Law.
The Uniform Approach
Uniformity – both within Canada and internationally – is extremely important in this area. Uniformity promotes familiarity with and ease of use of our arbitration infrastructure by foreign commercial interests. Recognizing this, the Uniform Law Commission of Canada (ULCC) has played a central role in promoting and facilitating the uniform implementation of the New York Convention and the Model Law across Canada. In 1986, the ULCC produced a model Uniform International Commercial Arbitration Act (Uniform Act 1986) and recommended its use for this purpose. Almost every provincial international commercial arbitration statute, including the Alberta Act, is based on the Uniform Act 1986.
In 2014, the ULCC revised its Uniform Act 1986 and created the Uniform Act 2014. The primary motivation for this revision was to adopt the 2006 Model Law amendments. The ULCC also sought to address some practical difficulties arising from case law or differences in arbitration practice across the country. Finally, it examined the important issue of whether there should be a harmonized cross-Canada limitation period for the recognition and enforcement of foreign arbitral awards.
Consultation Activities
Before creating the Uniform Act 2014, the ULCC conducted an extensive, cross-Canada consultation. After completing considerable research and analysis, the ULCC Working Group:
- obtained input from a large advisory board consisting of experienced arbitration practitioners, academics and institutional leaders;
- prepared a widely-distributed discussion paper that was discussed at conferences in Canada and published across Canada, the USA and the UK; and,
- produced a Final Report and Uniform Act 2014.
Due to the ULCC’s consultative efforts, the extensive cross-country input already reflected in the Uniform Act 2014, and the specialist nature of this area of practice, ALRI chose not to issue a Report for Discussion in this project. Rather, ALRI convened a Project Advisory Committee comprised of some of Alberta’s leading practitioners and academics in the area of international commercial arbitration. The Committee provided advice and input on early drafts of the Final Report and assisted enormously with the fine-tuning of ALRI’s ultimate recommendations.
Final Report 114: Key Proposal
ALRI recommends that the Uniform Act 2014 should be adopted in Alberta, with a few minor adjustments. The biggest changes that this will entail are the implementation of the 2006 Model Law amendments and the institution of a harmonized, cross-Canada limitation period for the recognition and enforcement of foreign arbitral awards.
Katherine MacKenzie is Legal Counsel at the Alberta Law Reform Institute. Before joining ALRI, she practiced family law in Edmonton. She has also worked at the Alberta Court of Appeal and the Legislative Reform Department at Alberta Justice.