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CASE #001E – The Russian Federation v. Luxtona Limited
October 5, 2021

Ontario – Appeal under UNCITRAL Model Law from arbitrator’s jurisdiction ruling is a de novo hearing on which parties may submit new evidence as of right – International judicial consensus on the interpretation of the Model Law is a persuasive consideration.

CASE #001E
The Russian Federation v. Luxtona Limited
2021 ONSC 4604 Divisional Court (CanLII)
MacLeod R.S.J., D.L. Corbett and Kristjanson JJ., June 30, 2021

This was an appeal from an arbitral tribunal’s determination of jurisdiction under the UNCITRAL Model Law. The tribunal held that it had jurisdiction to hear the arbitration. On the appeal from the tribunal’s decision under Article 16(3) of the UNCITRAL Model Law (“the Model Law”), the applicant sought to introduce new evidence which was not before the arbitral tribunal.

The issue was whether the appeal to a judge was a review or a hearing de novo on which new evidence is admissible without satisfying the test for admission of new evidence on appeal.

The UNCITRAL Model Law forms part of Ontario law by virtue of Part II of the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5  (“ICAA”). Under  article 16(3) of the Model Law, if an arbitral tribunal rules on a plea that it has jurisdiction, any party may apply to the Superior Court of Justice “to decide the matter”

The words “to decide the matter” at the conclusion of article 16(3) have been interpreted in many jurisdictions to mean that an appeal from the arbitral tribunal’s decision  is in not review but a hearing de novo.

Article 2A of the Model Law directs Ontario courts 1) to have regard to international origin of the Model Law and to the need to promote uniformity in its application and the observance of good faith; and 2) that questions concerning matters governed by the Model Law which are not expressly settled in it are to be settled in conformity with the general principles on which the Model Law is based. Therefore, even though international decisions are not binding on Ontario courts, they are strongly persuasive in the sense that interpretations of the Model Law should be as consistent as possible.

In the House of Lords decision in Dallah Real Estate and Tourism Holding Co. v. Ministry of Religious Affairs of the Government of Pakistan, [2011] 1 A.C. 763, [2011] 1 All E.R. 485 (U.K. S.C.) and in other international decisions, the Court held that an appeal under Model Law, article 16(3) is a hearing de novo at which the appellant can adduce evidence as of right, which was not before the Tribunal. There is an international consensus that the appeal from the tribunal is a hearing de novo at which the applicant can adduce as of right evidence which was not before the tribunal.

Applying the standard of correctness, the Divisional Court held that the application judge erred and allowed the appeal.

About Us

Arbitration & Business Cases is a blog created by Igor Ellyn and Robin Dodokin in September 2021. Our intention is to provide timely, concise summaries and commentary of Ontario and Canadian case law on arbitration and business matters.

Igor Ellyn,
QC, CS, FCIArb.

iellyn@ellynlaw.com
www.ellynadr.com
416-540-6611
416-365-3750

Robin Dodokin,
FCIArb., Q.Arb., LL.M, Q.Med.

robin@dodokinlaw.com
www.dodokinlaw.com
416-300-6515