Pricaspian Development Corporation v BG International Ltd, 2016 ABQB 611

Court of Queen’s Bench of Alberta Citation: Pricaspian Development Corporation v BG International Ltd, 2016 ABQB 611 Date: 20161031 Docket: 1201 13971 Registry: Calgary Between: Pricaspian Development Corporation and Jack J. Grynberg Applicants - and - BG International Ltd. Respondent _______________________________________________________ Reasons for Judgment of the Honourable Chief Justice Neil Wittmann _______________________________________________________ Introduction [ 1 ] The Applicants applied for an order to consolidate two international arbitrations. The Respondent opposes the application. [ 2 ] The application sought the following relief pursuant to

section 8 of the International Commercial Arbitration Act, RSA 2000, c I-5, [ ICAA ]: 1. Consolidating the arbitration commenced by the Respondent by way of Notice of Arbitration served July 27, 2012 (“the 2012 Arbitration”) with the arbitration commenced by the Applicants by way of Notice of Arbitration served October 29, 2010 (“the 2010

Arbitration”); 2. Appointing the panel in the 2010 Arbitration as the panel for the consolidated arbitrations. Issues [ 3 ] The preliminary issue in this application is whether this Court has the jurisdiction to consolidate arbitrations pursuant to

section 8 of the ICAA on the application of one party, when the other party does not consent or agree. [ 4 ] The second issue, if the Court does have jurisdiction to consider a contested application for consolidation, is whether the 2010 Arbitration and the 2012 Arbitration [the “two arbitrations”] should be consolidated. [ 5 ] The third issue, if the two arbitrations are consolidated, is whether the 2010 Panel should replace the 2012 Panel.

Background [ 6 ] This application arises out of a dispute that is commercial in nature and international in scope: the Applicants’ principal place of business is in one country, the Respondent’s registered office in another, and the subject matter of the dispute in a third country.

The parties entered into a Settlement Agreement (“Settlement Agreement”) that stipulates that any disputes that arise out of the Settlement Agreement are to be resolved by way of arbitration in a fourth jurisdiction – Alberta. [ 7 ] The subject of this dispute is an international commercial endeavour (the “Commercial Endeavour”). [ 8 ] The parties have a history of disputes relating to the Settlement Agreement dating back to 2005. [ 9 ] This particular dispute arose from conflicting

interpretations of the Settlement Agreement, which provided that: the Respondent pay a certain percentage of the proceeds of the Commercial Endeavour on an ongoing basis to the Applicants; the Respondent transfer the certain percentage of the net sale proceeds of the Commercial Endeavour to the Applicants should the Respondent sell its interest in the Commercial Endeavour; and the Respondent allow the Applicants to request an annual audit of the Respondent’s financial records by a mutually acceptable auditor.

The 2010 Arbitration [ 10 ] A dispute arose between the parties in 2007, and on June 15, 2007, the Applicants initiated arbitration (the “2007 Arbitration”). This arbitration sought to compel the Respondent to provide an accounting respecting the payments made pursuant to the Settlement Agreement, an audit of the Respondent’s books, and monetary damages [ 11 ] On September 1, 2009, the Applicants initiated a new arbitration (the “2009 Arbitration”).

Many of the issues in the 2009 Arbitration and the 2007 Arbitration overlapped, so the Respondent sought an order from the panel overseeing the 2007 Arbitration to enjoin the 2009 Arbitration until the 2007 Arbitration concluded. This order was granted by the 2007 Arbitration’s panel on December 29, 2009. [ 12 ] The Applicants, in response, applied to this Court to set aside the order to enjoin the 2009 Arbitration.

That application was denied by this Court. [ 13 ] Following the denial of the set aside application, both parties agreed to consolidate the 2007 Arbitration and the 2009 Arbitration (the “2010 Arbitration”). Under the 2010 Arbitration, the Applicants sought: an accounting and audit of the Respondent’s books to assess the accuracy of the Respondent’s calculation under the Settlement Agreement; damages for the Respondent’s alleged wrongful, bad faith, and fraudulent conduct; and triple and punitive damages attributable to the Respondent’s violation of various laws.

The 2012 Arbitration [ 14 ] The Respondent divested itself of part of its interest in the Commercial Endeavour, which triggered the Respondent’s obligation under the Settlement Agreement to transfer a certain percentage of the net sale proceeds to the Applicants (the “2012 Sale”). [ 15 ] The divestiture involved complex payments of both cash and non-cash consideration.

Essentially, the parties did not agree on how the non-cash consideration would be treated under the Settlement Agreement: the Applicants took the position they were entitled to some payment for the non-cash consideration under the Settlement Agreement, while the Respondent took the position that, because there was no cash exchanged in the non-cash component of the sale, the Applicants were not entitled to any cash payment pertaining to the non-cash consideration. [ 16 ] On July 27, 2012, the Respondent initiated a new arbitration seeking a declaration that the Applicants were not entitled to any cash payment in respect of the non-cash consideration, and that the Applicants were only entitled to a cash payment in regard to the cash consideration (the “2012 Arbitration”).

Arbitration Panels [ 17 ] Since 2007, all arbitrations, including the 2010 Arbitration, but excluding the 2012 Arbitration, have been heard before the same panel of arbitrators (the “2010 Panel”).

[ 18 ] A different group of arbitrators constitute the 2012 Arbitration panel (the “2012 Panel”). Prior to the 2012 Arbitration, the 2012 Panel had not heard any disputes between the parties. The Consolidation Application Currently Before The Court [ 19 ] In early 2013, the parties agreed to have an audit of the Respondent’s books for the 2006-2011 tax years to confirm proper payment pursuant to the Settlement Agreement. The final report from the audit was issued in July of 2014, with an addendum issued in January of 2015.

While the audit was underway, both parties agreed to suspend the proceedings in the 2012 Arbitration. [ 20 ] The audit identified a number of matters in dispute between the parties that required a legal

interpretation. In addition, both parties agreed to conduct an audit for the 2012 tax year, but disagreed on the scope of the audit (the “2012 Audit”). [ 21 ] The 2010 Arbitration had been dealing with audit-related disputes between the parties, and as such, the parties agreed to have the new disputes heard under the 2010 Arbitration.

A hearing to determine the scope of the 2012 audit was to be conducted in the summer of 2015, while a hearing to resolve the issues with the 2006-2011 audits was to be heard in the fall of 2015. [ 22 ] Both parties agreed to continue to suspend the 2012 Arbitration until the audit issues were resolved by the 2010 Panel. The Applicants did not express any intention to have the two arbitrations consolidated then, nor at any time before December 2015. [ 23 ] In May 2015, the Applicants retained new counsel.

Prior to the retention of new counsel, there was no evidence of the Applicants’ intention to apply to consolidate the two arbitrations. Both arbitrations had been running concurrently since July of 2012. [ 24 ] In December of 2015, counsel for the Applicants expressed their clients’ intention to apply to have the 2010 Arbitration and the 2012 Arbitration consolidated. The Respondent opposed the consolidation. [ 25 ] The 2012 Panel wrote to the parties indicating that it understood the Applicants’ intention to consolidate as a request to stay the 2012 Arbitration.

In late 2015, the 2012 Panel received written submissions on the matter, and in a decision dated January 20, 2016, the 2012 Panel dismissed the application to stay the 2012 Arbitration and held that the proceedings should advance. [ 26 ] On January 12, 2016, the Applicants filed the application for consolidation presently before the Court. In the application, the Applicants sought a consolidation of the 2010 Arbitration and the 2012 Arbitration. In the event that the consolidation is ordered, the Applicants request that the 2010 Panel be appointed to hear the newly consolidated arbitration. The ICAA ,

Section 8 [ 27 ] The parties agree that section 8(1) (

a) of the International Commercial Arbitration Act governs the issues in dispute.

Section 8 in its entirety reads:

(1) The Court of Queen’s Bench, on application of the parties to 2 or more arbitration proceedings, may order (

a) the arbitration proceedings to be consolidated, on terms it considers just, (

b) the arbitration proceedings to be heard at the same time, or one immediately after another, or (

c) any of the arbitration proceedings to be stayed until after the determination of any other of them.

(2) Where the Court orders arbitration proceedings to be consolidated pursuant to subsection (1)(

a) and all the parties to the consolidated arbitration proceedings are in agreement as to the choice of the arbitral tribunal for that arbitration proceeding, the arbitral tribunal shall be appointed by the Court, but if all the parties cannot agree, the Court may appoint the arbitral tribunal for that arbitration proceeding.

(3) Nothing in this

section shall be construed as preventing the parties to 2 or more arbitration proceedings from agreeing to consolidate those arbitration proceedings and to take such steps as are necessary to effect that consolidation. [ 28 ] The ICAA in Alberta is based on the Model Law on International Commercial Arbitration ( UNCITRAL (United Nations Commission on International Trade Law), UN Doc A/40/17, ann 1 (1985) (the " Model Law ")); indeed, the ICAA incorporates the Model Law into Alberta law by attaching it as an appendix to the ICAA . Position of the parties Applicants [ 29 ] The Applicants argue that this Court is empowered by

section 8 of the ICAA to consolidate the two arbitrations and to order that the consolidated arbitration be heard and determined by the 2010 Panel. The Applicants note that they seek consolidation in the narrowest sense. [ 30 ] The Applicants’ grounds are that in late 2015 it became clear that the issues in the 2010 Arbitration and the 2012 Arbitration had become inextricably linked, given the “cross-threading” of issues between the two arbitration panels.

[31] A

summary of the Applicants’ argument is that if the arbitrations are not consolidated, there will be: a multiplicity ofproceedings; serious risk of contrary and inconsistent decisions on overlapping procedural and substantives issues; significantinefficiencies including duplication of time, effort and costs; unnecessary delay and expense; significant potential for injustice and abuseof process by the Respondent; and unfairness and prejudice to the Applicants. [32] The Applicants argue that they will be seriously prejudiced if the matters are not consolidated.

The Applicants claim that theRespondent will not suffer any prejudice, and in fact will derive the benefits of consolidation including cost savings and otherefficiencies. [33] To support their position, the Applicants submit that the two arbitrations are between the same parties, involve the samearbitration agreement, and the same arbitration mechanism and process. [34] The Applicants submit

section 8 of the ICAA is the governing legislation. To interpret the ICAA, the Applicants referencesection 10 of the

Interpretation Act, RSA 2000 c I-8, [Interpretation Act], which provides that every enactment in Alberta “shall beconstrued as being remedial, and shall be given the fair, large and liberal construction and

interpretation that best ensures the attainmentof its objects.” [35] The Applicants cite Clarke v Clarke, (SCC), [1990] 2 SCR 795, for the proposition that statutes are to beinterpreted in generous terms and given a remedial and purposive

interpretation; that the purpose of

section 8 of the ICAA is to providethe Court with the discretionary ability to consolidate arbitration proceedings on terms it considers just. The Applicants urge the Court’sintervention and the exercise of its supervisory jurisdiction. [36] Noting that the decision is not binding on this Court, the Applicants cite Western Oil Sands Inc v Allianz Insurance Co ofCanada, 2004 ABQB 79, where the Court held that it had no power to order consolidation of arbitral proceedings under

section 8 of theICAA unless all of the parties to the arbitration consented. There, the Court reasoned that

section 8 of the ICAA refers to “parties”, andnot “party”, stating it would be a “perverse

interpretation” to refer to “parties” as a single party. The Applicants submit the decision inthis regard was clearly an error of law, given

section 26 of the

Interpretation Act which provides that in Alberta legislation, words in theplural include the singular. [37] The Applicants further contend that throughout his decision in Western Oil Sands, Hawco, J effectively read in the words “allof the parties,” when

section 8 only refers to an application by the “parties”. [38] The Applicants distinguish Liberty Reinsurance Canada v QBE Insurance & Reinsurance, [2002] OJ No 3599, 116 ACWS(3d) 616, relied on in Western Oil Sands, as being highly factually distinguishable; that the Court in that instance had likewise failed toconsider the Ontario

Interpretation Act, RSO 1990, c I.11, and that, in any event, the Ontario

Interpretation Act has very differentwording than Alberta’s

Interpretation Act. The end result, the Applicants submit, is that

section 8 is rendered meaningless and withoutpurpose if interpreted according to Western Oil Sands. [39] Put another way, the Applicants state that if all the parties agreed to a consolidation, there would be no need for a court orderand no need for

section 8 of the ICAA. [40] The Applicants contend that the Respondent attorned to the jurisdiction of the 2010 Panel when it caused the process fordisclosure of its books and records for the 2012 Sale under the 2012 Audit to be addressed and adjudicated by the 2010 Panel and causedthe issues in the 2012 Arbitration to become split between the parties. [41] A further argument advanced by the Applicants is that the 2010 Panel has nine years of experience in dealing with theSettlement Agreement, and has issued approximately thirty procedural and substantive orders, including some specifically on audit rightsand disclosure.

They also note that the 2010 Panel has gained significant first-hand knowledge of the parties, their contractualrelationship and their dealings.

Because of this, they argue that it would be more cost-effective to consolidate, given the cost of educatingthe 2012 Panel. [42] The Applicants also state that because the 2012 Arbitration proceedings are not advanced (all the 2012 Panel has done is toreceive pleadings and hear the stay application which was in regard to the consolidation application currently before this Court), there isno prejudice to the Respondent. [43] Finally, the Applicants argue that the affidavit of the Respondent’s Finance Manager should be given no weight given thatshe: only commenced employment with the Respondent in August of 2014; was only provided with very selective information; lacksfirst-hand knowledge; and that virtually all of her affidavit is sworn on the basis of information and belief.

Respondent [44] The Respondent’s position is that the application to consolidate should be dismissed because: consolidation is impermissible,or invalid, as a matter of law; the Applicants have waived their right to seek consolidation; it would be an abuse of process; theRespondent would suffer significant prejudice if consolidation were granted; and finally, the remainder of the Applicants’ arguments arewithout merit. [45] The Respondent submits that the prevailing view amongst scholars of international commercial arbitration is that there shouldbe no court intervention unless the arbitration agreement specifically authorizes it. [46] The Respondent, relying on Western Oil Sands, argues that Alberta law does not permit consolidation under the ICAA.

Theyargue that a “plain and ordinary” reading of section 8(1) of the ICAA makes clear that in order for two or more international arbitrationproceedings to be consolidated by the Court, all of the parties to those arbitration proceedings must consent to the consolidation.

[ 47 ] In response to the Applicants’ argument that section 26(3) of the

Interpretation Act applies so as to include the singular “party” where “parties” is written, the Respondent cites section 3(2) of the

Interpretation Act submitting it curtails the operation of section 26(3) and provides that it only applies where a contrary intention does not appear in the body of a given statute. Section 3(2) of the

Interpretation Act reads: The provisions of this Act apply to the

interpretation of this Act except to the extent that a contrary intention appears in this Act. [ 48 ] The Respondent argues that the Court of Appeal of Alberta has repeatedly held that section 26(3) of the

Interpretation Act cannot be indiscriminately applied in all cases where the singular or plural is used, and that it will depend on the context of the particular legislative provision in question. [ 49 ] The Respondent submits that because the Applicants have participated in the 2012 Arbitration for four years without protest, they have waived their right to seek consolidation.

Citing various provisions in the Model Law , the Respondent believes that the Applicants failed to object to the jurisdiction of the 2012 Panel in time. [ 50 ] In addition, the Respondent argues that the Applicants are estopped by the principles of res judicata and issue estoppel.

The Respondent states that all of the arguments advanced by the Applicants were previously determined by the 2012 Panel in connection with the stay application. [ 51 ] The Respondent argues that the Applicants’ transparent attempt to usurp the jurisdiction of the 2012 Panel can only be described as an abuse of process, and that it is apparent that the Applicants’ objective is not efficiency or expediency, but the dissolution of the 2012 Panel. [ 52 ] Contrary to the Applicants’ argument that the Respondent would not suffer any prejudice if the arbitrations were consolidated, the Respondent contends that it would suffer significant prejudice because it would be deprived of its chosen arbitrators, and also because its already expended resources would be wasted. [ 53 ] The Respondent submits that all of the following arguments made by the Applicants are without merit: that the issues between the arbitrations are “inextricably linked”; that not consolidating would result in a multiplicity of proceedings and a risk of inconsistent rulings; that consolidation will create efficiencies and cost-savings; and finally that the Respondent has engaged in “mischief” as the arguments around the jointly-drafted confidentiality orders and the disclosure or sharing of information as between the two arbitration panels is erroneous as there are no overlapping issues.

Analysis Issue 1: whether the Court has jurisdiction to consolidate arbitrations pursuant to

section 8 of the ICAA on the application of one party Intervention by the Courts [ 54 ] Unlike litigation where the court has unquestionable control over its own processes, in international commercial arbitration, this power is circumscribed by statutory provisions and by any agreement made between the parties as to the rules and method for resolving their disputes. The purpose of arbitration in international commercial interactions is to allow a forum that is flexible enough to meet the agreed-upon needs of the parties. Intervention by the courts is to be minimal:

Article 5 of the Model Law provides that: “[i]n matters governed by this Law, no court shall intervene except where so provided in this Law.” [ 55 ] Counsel presented opinions from various authors on the appropriate level of the courts’ involvement in consolidation in international commercial arbitration proceedings. In this regard, Gary Born says: There is little authority on the question of what law governs issues of consolidation, intervention and joinder.

In principle, the law governing the parties’ arbitration agreement should also govern issues of consolidation, intervention and joinder, given the dominant role of party autonomy on the subject. In many cases, but not all, this will be the law of the arbitral seat ”. [ Emphasis added ]. (GB Born, International Commercial Arbitration , Vol 2, (WoltersKluwer: 2009) at 2076).

As discussed below, the law governing the parties’ arbitration agreement, and the law of the arbitral seat, is the law of Alberta. [ 56 ] Brian Casey (J Brian Casey, Arbitration Law of Canada: Practice and Procedure , 2 nd ed (Juris: 2011) at 320) opines that the “Domestic Acts all provide for court ordered consolidation, but only if all parties to the arbitrations involved agree”, and that “[i]nitial consent to consolidation is however a prerequisite”.

This opinion, however, was based on a review of Alberta law, the most prominent case cited being Western Oil Sands , which will be discussed below. [ 57 ] Thus, the Court will intervene where the parties have agreed to it in their arbitration agreement, or, in the absence of an agreement, where the legislation allows. The process for determining whether the court should intervene in an international commercial arbitration dispute includes reference to the parties’ arbitration agreement, the ICAA , the Model Law that supports

interpretation of the ICAA , and the

Interpretation Act . Provisions of the Settlement Agreement

[ 58 ] The parties have chosen arbitration to govern disputes arising out of their Settlement Agreement. Specifically, in

section 10.04(

a) the parties agreed that: If the parties…are unable to amicably resolve a dispute or difference arising out of…this Agreement…such matter shall be …settled by arbitration pursuant to the Model Law …”. [ 59 ] The Settlement Agreement is silent on how disputes over procedural matters, including consolidation, are to be determined. [ 60 ] In

Section 10.02 of their Settlement Agreement, however, the parties agreed that Alberta law would apply to disputes arising from their Settlement Agreement: This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta, Canada, without reference to conflicts of laws principles applied by the courts of the Province of Alberta, Canada.

Each of the parties hereto acknowledges that it or he has chosen the laws of the Province of Alberta, Canada to be the governing law of this Agreement in recognition of Alberta’s expertise in […] and its reputation for legality and equity. [ 61 ] Given that the parties do not have an agreement on the procedure to be used for consolidation applications, but they have agreed that Alberta law will govern “a dispute or difference arising out of th[e] Agreement”, reference will be made to the governing legislation: the ICAA . [ 62 ] Section 8(1) (

a) of the ICAA states: 8(1) The Court of Queen’s Bench, on application of the parties to 2 or more arbitration proceedings, may order (

a) the arbitration proceedings to be consolidated, on terms it considers just,[…]. [ 63 ] Counsel diverged on

interpretation of the phrase “on application of the parties”. The question is whether the parties have to “consent” to an application to consolidate, or whether one party can make an application to the Court and thereby trigger an obligation of the Court to consider the merits.

Interpretation Aids [ 64 ] In interpreting the phrase “on application of the parties”, there are a number of

interpretation aids to consider:

section 10.03 of the Settlement Agreement;

section 12 of the ICAA , (including the two documents mentioned in 12(2)(

a) and (b): the Report of the United Nations Commission on International Trade Law on the Work of its Eighteenth Session (June 3-21, 1985), and (

b) the International Commercial Arbitration Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration); the Model Law , in particular

Article 2; and the

Interpretation Act . [ 65 ]

Section 10.03 of the Settlement Agreement is entitled “Interpretation”. It is noteworthy that, for interpreting the Agreement itself, the parties have agreed that: “[t]he plural and singular numbers shall, where appropriate, include the singular and plural, respectively…”. Although this clause is obviously not determinative of the question at hand, it does show some indication of the parties’ intentions in interpreting provisions: that a liberal and generous

interpretation is to be given in favour of a strictly literal one. [ 66 ]

Section 12 of the ICAA sets out “Aids in

interpretation” to the Act. It reads:

(1) This Act shall be interpreted in good faith, in accordance with the ordinary meaning to be given to the terms of the Act in their context and in the light of its objects and purposes. [emphasis added].

(2) In applying subsection (1) to the International Law, recourse may be had to (

a) the Report of the United Nations Commission on International Trade Law on the Work of its Eighteenth Session (June 3-21, 1985), and (

b) the International Commercial Arbitration Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration [...]. [ 67 ] The objects and purpose of the relevant

section of the Settlement Agreement is dispute resolution: to interpret

section 8 of the ICAA as requiring consent of both parties would mean that the parties do not have recourse to the Court to resolve a dispute as to whether consolidation should occur. Nothing precludes the parties from taking their consolidation application to an arbitral panel. [ 68 ] Another aid for

interpretation is

Article 2 of the Model Law , entitled “Definitions and rules of

interpretation”, which provides that for the purposes of this Law: [...] (

d) where a provision of this Law, except

article 28, leaves the parties free to determine a certain issue, such freedom includes the right of the parties to authorize a third party, including an institution, to make that determination; (

e) where a provision of this Law refers to the fact that the parties have agreed or that they may agree or in any other way refers to an agreement of the parties, such agreement includes any arbitration rules referred to in that agreement; [...]

( International Commercial Arbitration Act , RSA 2000, c I-5, Sched. 2). [ 69 ]

Article 2 (

d) allows parties the freedom to authorize an institution to make a determination on a certain issue. In the Settlement Agreement, it was agreed that disputes arising from it would be “construed in accordance with the laws of the Province of Alberta”: the law in Alberta that assists with

interpretation of

an act is the

Interpretation Act . The

Interpretation Act applies to the ICAA , by virtue not only of the parties’ agreement that Alberta law applies, but also

section 3 of the

Interpretation Act itself: 3

(1) This Act applies to the

interpretation of every enactment except to the extent that a contrary intention appears in this Act or the enactment.

(2) The provisions of this Act apply to the

interpretation of this Act except to the extent that a contrary intention appears in this Act.

(3) Nothing in this Act excludes the application to an enactment of a rule of construction applicable to it and not inconsistent with this Act. [ 70 ] There are a number of sections in the

Interpretation Act that guide the

interpretation of

section 8 of the ICAA . [ 71 ]

Section 10 legislates that enactments are remedial: “An enactment shall be construed as being remedial, and shall be given the fair, large and liberal construction and

interpretation that best ensures the attainment of its objects.” This provision accords with the views of the Supreme Court of Canada in Clarke v Clarke , and with Sullivan on the Construction of Statutes , (R Sullivan, 5 th ed, (LexisNexis: 2008) at 467) in saying that statutes are to be interpreted in generous terms and given a remedial

interpretation, with all legislation required to be interpreted in a purposeful manner, regardless of the impact on private rights or freedoms. [ 72 ] Section 26(3) of the

Interpretation Act provides that “[I]n an enactment, words in the singular include the plural, and words in the plural include the singular”. Thus, by applying section 26(3)

Interpretation Act, “parties” would include “party”, making it permissible for one party to make a consolidation application to the Court. In Western Oil Sands , and also in Liberty Reinsurance Canada , the case relied on by the Court in Western Oil Sands , the

Interpretation Act appears not to have been argued. [ 73 ] Although the Respondent argued that the Court of Appeal of Alberta has repeatedly held that section 26(3) of the

Interpretation Act cannot be indiscriminately applied in all cases where the singular or plural is used, and that it will depend on the context of the particular legislative provision in question, this is such a case where the context of the particular legislative provision requires it to be read in the singular, as otherwise the

section would have no purpose. “Consent” or “Agreement” / to Application or to Relief? [ 74 ] Counsel argued that “consent” was either required, or not, for an application to be made. Two points arise from the use of the word “consent” by the parties: one is that the word “consent” is never used in the ICAA : “agreement” is, but “consent” is not; the second is whether the “consent” required is to the application itself, or to the relief being sought. [ 75 ] On the second point, “consent” is a term used when parties agree on the relief sought: where both parties want the judge to order the same thing.

It may be that it is not that the parties have to agree whether the arbitrations should be consolidated or not, they merely have to agree that an application needs to be brought and that they require determination by a judge. [ 76 ] Considering that the term “consent” does not even appear in the act, and using the

interpretation that the “agreement” is to the application, not the relief, the concept of required “consent” is not applicable to the determination of this matter. [ 77 ] There are further reasons that support the

interpretation that the “agreement” is to an application being brought, and not to the relief itself. [ 78 ] The Alberta Rules of Court , Alta Reg 124/2010, - also a law of Alberta which the parties agreed would govern their dispute - governs court actions in Alberta.

Specifically, Rule 3.1 says: A court action for a claim may only be brought and carried on, applications may only be filed and proceedings may only be taken in accordance with these rules. [ 79 ] To proceed “in accordance with these rules” means using the standard procedure for applications to the court: Rule 6.3 and Form 27 set out the provisions for bringing an application to the court.

These provisions contemplate an application being brought by one party to the action to which the respondent can then determine their position in response: ignore it entirely, take no position, consent to the relief sought in the application, or contest it. [ 80 ] Given that it would be very uncommon for a joint or consented to application to even be made, it would seem that the legislators would have made special provisions if indeed they were intending for a consented to application to be the procedure used for a

section 8 of the ICAA application. Language such as “joint application”, “application by agreement of parties”, or “the parties, having agreed upon consolidation, may bring an application for procedural direction”; or “the Court may endorse an order whereby both sides consent” could have been used. Likewise the legislators could have required a consent order or use of a prescribed form entitled “Application by Agreement of Parties”.

Given that no such particular provision was articulated or procedure provided, it seems most likely that the legislators intended the application to be brought by the usual method: an application by one party, to which the other party responds, with the court determining the result. [ 81 ] In determining that consent of both sides was required, Hawco, J in Western Oil Sands said: “There may also be occasions where, although the parties agree to consolidation, they may require the court’s assistance in determining the appropriate terms or procedures to be applied” (at para 29).

Especially since the intent of the legislation and the trend in jurisprudence is for the courts to be non-interventionist: see Haas v Gunasekaram, 2016 ONCA 744 . This argument is unconvincing, for if the Court were to be permitted to make any order, logically it should be the more overarching decisions, such as an order to consolidate, not one crafting the finer

procedural steps to be taken by an arbitral tribunal for an already agreed-upon consolidation; steps that would only make sense to be determined by the arbitral panel themselves. Broader Considerations in the ICAA [ 82 ] There are a number of other indicators in the ICAA which lend credence to the argument that only one party need make application to the court for consolidation. [ 83 ] First,

section 8 of the ICAA provides the Court with at least some measure of discretion when it says the Court “ may order the arbitration proceedings to be consolidated” [ emphasis added ]. If no discretion was intended, the wording would have been that the Court “will order” or “shall order” the consolidation. [ 84 ] Second, there are two subsections of the ICAA that deal with consolidation: 8(1) and 8(3). Section 8(1) , the

section in question, is set out above. Section 8(3) provides that: “nothing in this

section shall be construed as preventing the parties to 2 or more arbitration proceedings from agreeing to consolidate those arbitration proceedings and to take such steps as are necessary to effect that consolidation.” There would be no reason for these two separate subsections to exist if both dealt with an agreement between parties: one must necessarily deal with disagreement: s 8(1); and the other with agreement: s 8(3). [ 85 ] Third, the ICAA is a succinct act, comprised of only twelve sections​​​​​​​​​​​. That the consolidation

section is so comparatively prominent weighs in favour of it being a contested application and not merely one by consent. [ 86 ] Fourth, it seems incongruous that there would be a

section on consolidation by consent, but no similar provisions for dealing with other procedural matters by consent. It is assumed that there is no provision for procedural matters by consent, as it is assumed that these would be dealt with at the arbitral tribunal level. [ 87 ] Another incongruity is for the legislation to give the Court powers to determine who the arbitrator is if the parties cannot agree (section 8(2)), but not to give the Court power to determine a contested application for consolidation. [ 88 ] If the

section indeed did require the consent of both parties, the result would be that there would be no available avenue for an aggrieved party to bring a contested consolidation application to the Court (although it could be made to an arbitral panel).

This would mean that a party to an arbitration could bring multiple, similar arbitrations, and then withhold their consent to consolidate unreasonably, without the aggrieved party having recourse to the Court. [ 89 ] The general oversight of the Court is important even in consented to consolidation applications, for there are cases where it is inappropriate for a matter to be consolidated, even though the parties agree to it.

For example, the parties may be seeking to save costs, but the tribunal may see that the fact scenarios or issues are diverse enough that separate proceedings are required in order for a proper decision to be made. [ 90 ] Considering all the above factors, an application to the Court by one party alone appears to have been contemplated by

section 8 of the ICAA . Conclusion [ 91 ] The Respondent argued that the consent of both parties was required in order for the Court to have jurisdiction. I do not agree. The

interpretation urged on me by the Respondent leads to an absurd result. [ 92 ] Accordingly, for the reasons above, I find that the Court has jurisdiction under

section 8 of the ICAA to hear an application for consolidation that is brought without the consent or agreement of both parties. Issue 2: Consolidation Application [ 93 ] Given the decision that this court can hear an application for consolidation that is brought without consent or agreement of both parties, it remains to consider whether consolidation should be ordered. Factors [ 94 ] Consolidation allows a tribunal to control its own process and, amongst other things, to reduce or prevent duplication, expense, repetition and delay. Although consolidation can be useful, it is not always appropriate.

Each case must be considered on its own merits. [ 95 ] The factors to consider for an international commercial arbitration consolidation application are similar, but not the same, as those used for a domestic arbitration, or for litigation. [ 96 ] The primary factor is the terms of the arbitration agreement between the parties.

In this particular case, the parties’ arbitration agreement was silent on a process for consolidation, and instead provided that the laws of Alberta would govern. [ 97 ] Other sources for consideration include: principles in the ICAA and the Model Law ; Rule 3.72 of the Rules of Court ; previous judicial consideration; and any other matters that would lead to a “just” decision, per section 8(1) (

a) of the ICAA . [ 98 ] Under the Rules of Court , Rule 3.72 provides that actions may be consolidated for any reason the Court considers appropriate, including that two or more claims or actions

(

a) have a common question of law or fact, or (

b) arise out of the same transaction or occurrence or series of transactions or occurrences. [99] Apart from the factors articulated in the Rules, other factors include: that the court is to be non-interventionist (this may meanreferring appropriate consolidation applications to arbitral tribunals); whether the issues in both actions are identical (Welco ExpeditingLtd v Harris (1995), (AB KB), 31 Alta LR (3d) 173 (QB), at para 56); whether there are common claims, disputes,(Munro v Munro, 2011 ABCA 279, at para 7) and relationships between the parties; whether consolidation will save time and resources;whether one party will be seriously prejudiced by having two arbitrations heard together; whether one action is at a more advanced stagethan the other; and whether consolidation will delay the hearing of one action which will cause serious prejudice to one party (adaptedfrom Kenny J, in Frydman v Pelletier, 2013 ABQB 225, at para 40, relying on Mikisew Cree First Nation v Canada (1998), 1998ABQB 675 , 224 AR 157 (ABQB) at para 2).

Application of Consolidation Factors [100] The Applicants have failed to convince me that the issues between the two arbitrations are so “inextricably intertwined” thatprejudice would be caused by not consolidating them; or that there is such an overlap of issues that it would be more efficient or morecost-effective to consolidate.

I believe that the 2012 Panel can get up to speed on the materials before them; no evidence was provided onany costs associated with either educating the 2012 Panel, or disbanding it; or that a lack of consolidation will result in a multiplicity ofproceedings and a risk of inconsistent rulings; or that mischief would result in regard to the confidentiality orders in place. Consolidation, or Consecutive or Concurrent Hearings [101] The relief the Applicants requested is “consolidation”.

Neither the Applicants nor the Respondent addressed distinctionsbetween whether the two arbitrations should be consolidated, as opposed to being heard either consecutively or concurrently, as providedfor in section 8(1)(

b) of the ICAA. Section 8(1)(

b) provides that: The Court of Queen’s Bench, on application of the parties to 2 or more arbitration proceedings, may order (

b) the arbitration proceedings to be heard at the same time, or one immediately after another […]. [102] The distinction comes into play for a number of procedural steps: consolidated actions become one action, with one decisionrendered, whereas consecutive or concurrent actions remain as two distinct matters but are heard at proximate times for matters ofefficiency. (For example, the recitation of facts or evidence may be the same, but the matters may diverge on the issues.) Two decisionswould ultimately be rendered for matters being heard on a consecutive or concurrent basis. [103] The parties did not provide sufficient evidence or argument as to why consolidation would be more appropriate relief thanhaving the matters heard either consecutively or concurrently.

Conclusion [104] Given the preponderance of factors weighing against it, the application to consolidate is dismissed on the basis of it not being aproper case for consolidation on the evidence tendered before me. The parties are at liberty to take up the issue with the arbitration panelor panels, as they see fit. Issue 3: Panel [105] In the event that the two arbitrations were consolidated, the Applicants applied to have the 2010 Panel appointed to hear theconsolidated arbitrations. Given that consolidation was not ordered, this issue need not be determined.

Conclusion [106] I have determined that an application to the Court to consolidate arbitration proceedings under

section 8 of the ICAA can bemade by one party to the arbitration; consent or agreement is not required. The application to consolidate the two arbitration proceedings,however, is dismissed. [107] In the event that costs cannot be agreed upon between the parties, counsel may apply to the Court within 30 days. Heard on the 9th and 29th day of June, 2016, with written submissions of August 22, 25, 30 and September 1, 2016 Dated at the City of Calgary, Alberta this 31st day of October, 2016.

Neil Wittmann C.J.C.Q.B.A. Appearances: Peter T. Linder, Q.C. Emi R. Bossio for the Applicants George M. Vlavianos Vasilis F.L. Pappas for the Respondent