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PROCEEDINGS IN CONTRACT - Practice and procedure - Mediation and arbitration - Appeals and judicial review

Thursday, December 21, 2017 @ 8:32 AM  


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Appeal by Consolidated Contractors Group (CCG) from a judicial review judgment affirming an international commercial arbitral award in favour of the respondent, Ambatovy Minerals. The appellant was the contractor on a $258 million pipeline construction project in Madagascar tendered by the respondent. The parties' contract provided for initial dispute resolution by the respondent's supervising engineer, secondary resolution by a sole adjudicator, with final dispute resolution by way of arbitration. The appellant alleged the respondent breached the parties' contract, leading to delays and additional costs. It sought compensation for related costs, plus payment for additional work it claimed it performed. The appellant disputed the determination by the respondent's engineer and the parties agreed to proceed straight to arbitration. The respondent advanced a counterclaim for liquidated damages arising from the failure to complete the project within time, plus additional compensation for failure to properly complete the work. The arbitration panel determined it had jurisdiction to entertain the counterclaim. The panel issued a final award that awarded the appellant $7 million of the $91 million claimed, and awarded the respondent $25 million for its counterclaims. The appellant sought judicial review on the basis that the panel lacked jurisdiction for portions of the award, and upon breaches of procedural fairness and violations of public policy. The application was dismissed. The appellant appealed to the Court of Appeal.

HELD: Appeal dismissed. The arbitration terms of reference conferred jurisdiction on the panel to decide questions of fact and law necessary to determine the issues and to rule on the parties’ requests for relief, including the respondent's counterclaim. No breach of procedural fairness arose from the manner in which the panel proceeded. The panel's findings of fact regarding the parties' intentions as to what aspects of their dispute were arbitral, and the determination of the merits of the claims themselves, were based on the parties' submissions. There was no aspect of the appellant's claim or response to the counterclaim that involved the appellant being prevented from presenting its case. No surprise or unfairness arose from the panel's reliance on particular provisions of the parties' contract in support of its conclusions.

Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., [2017] O.J. No. 6323, Ontario Court of Appeal, G.R. Strathy C.J.O., K.M. van Rensburg and G.T. Trotter JJ.A., December 4, 2017. Digest No. TLD-December182017007