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(8) procedure and pitfalls / interesting issues (Procedure and pitfalls…

- - - - Noble China Inc v Lei Kat Cheong [1998] OJ No 4677 (Gen Div, Ontario)
        Facts: Arbitration agreement provided that parties could not have recourse to courts save for enforcement of award.
        Held: The parties had thereby agreed to exclude right to apply to court to set aside. Art 34ML was not mandatory and could be contracted out of.
        
        A bold finding … ontario went through ML and drafting documents to try to discern A34. the ct was balancing public policy idea that certain awards should be allwed to be set aside VS party autonomy … CAN DELETE A34
      - But a few years later in methanex, NZ looked at the same thing.
        
        Methanex Motunui Ltd v Spellman [2004] 3 NZLR 454 (CA, New Zealand) (see [92]-[117])
        Facts: Arbitration arising out of the Maui gas field. Arbitration agreement for determination of economic recoverable reserves in the gas field. Clause 6 provided “there shall be no appeal against ay decision… except if the decision was induced or affected by fraud or corruption.” Clause 10 said “Methanex is not to seek any court order, whether by way of appeal or review or otherwise, that would have the effect of delaying the Independent Expert process...”
        Held: The parties cannot exclude review on the grounds in Art 34 ML.
        
        Detailed contract that methanex cannot challenge expert.
        Does this have th eeffect of contracting out A34? And can parties as a matter of law validly contract out of A34? Ct reached the opp conclusion. Parties cannot exclude review
      - Hall Street Assoc LLC v Mattel Inc, 552 US 576 (2008); 128 SCt 1396 (2008) (US Supreme Court)
        
        Facts: Tenant terminated lease and agreed to arbitrate landlord’s claim for indemnification for costs of cleaning up leased premises. The arbitration agreement requires the court to vacate, modify or correct any award if the arbitrator’s conclusions of law were erroneous. The District Court vacated the arbitrator’s award for legal error, under this clause.
        
        There was nothing in US arbitration act that provides for review of arbi award on grounds of error of law. This article was purporting to expand th circumstances in which it was allowed to do so
        
        Could the parties validly empower the ct to review arbitrator award on grounds beyond those in FAA. Supreme ct fudged it . Said NO, parties cnnot expena d ground for review.
        
        Held: Restoring the award, the FAA’s grounds for vacating or modifying awards under expedited review are exclusive and cannot be modified by agreement. But it might be possible to modify other means of judicial review by agreement. [but on the facts, SC said its not possible. This is obvs not a ML provision. But the expedited process for review under FAA is v similar to A34 of ML providing by parity of reasoning that u cant expand per A34)
      - Methanex Motunui Ltd. v Spellman, [2004] 3 NZLR 454 at [105] - it is not open to the parties to confer a more extensive jurisdiction on the ct
        
        Held: “Article 34 is expressed in exclusionary terms: it specifies the only grounds upon which a Court may interfere with an award in review proceedings. Accordingly, it is not open to the parties to a submission to arbitration to confer, by contract, a more extensive jurisdiction on the Court, for instance to review for factual error.”
    - - A residual discretion?
        Art 34 ML provides that an award “may” be set aside if a ground is made out. (does the ct have a discretion to refuse to set aside an arbitral award even if one of the grounds is made out. The prevailing view is that the ct has such a discretion.
        Lew, Mistelis & Kroll, Comparative International Commercial Arbitration (2003) para 25-37
        The prevailing view is that a procedural irregularity or defect alone will not invalidate an award. The test is that of a significant injustice so that the tribunal would have decided otherwise had the tribunal not made a mistake. Similarly assessment of evidence is in the discretion of the tribunal and can rarely amount to a ground for challenge of an award.