Commercial Arbitration and the Courts

Remarks by: Chief Justice Warren K. Winkler Court of Appeal for Ontario

Toronto Commercial Arbitration Society (“TCAS”)

Toronto, Ontario

September 7, 2010

It is a pleasure to be here at the inaugural event of the Toronto Commercial Arbitration Society to speak about the relationship between the courts and commercial arbitration.

Let me begin by congratulating you on the creation of this important organization and the work that you are taking on to promote Toronto as a global centre for commercial arbitration. More generally, I herald your efforts to promote the use of private arbitration to resolve commercial disputes where the parties are in agreement on such a model.

With my interest in alternative dispute resolution being well known, it should come as no surprise to this group that I support your goals and the vision that this Society reflects. In my experience, properly conducted private dispute resolution can only serve to enhance the effectiveness and efficiency of the justice system. In other words, it is not in competition with the courts but rather serves a complementary role to them.

There are many reasons why parties choose private arbitration for the resolution of a dispute, all of which I expect will readily come to mind for those of you here tonight. Nevertheless, I will list a few: the parties may wish to choose a specific arbitrator with a developed expertise in the subject matter in dispute; the parties may want to control the timetable as opposed to leaving this to the court administrators; they may require a level of confidentiality not available in a court proceeding; or, they may opt for finality over the delays that appeals from a lower court decision entail. Admittedly, private arbitration is not always simple or inexpensive but it is expeditious.

Looking at it from a broader perspective, however, I see the availability of private arbitration as an access to justice issue. When the parties select arbitration, they free up valuable court time and thus shorten waiting periods for other litigants. To this extent private arbitration is the only expandable resource available to the traditional court system. It can and does have a streamlining effect on the flow of litigation generally. In short, it enhances access to justice.

Finally, and importantly, those of us in the courts respect the freedom of choice of the parties to select private commercial arbitration to resolve their disputes.

I also commend you on choosing to promote Toronto as a location of choice for international and national commercial arbitrations. As all of us in this room know, it is a great place to live, work and do business. We live in a modern and dynamic city, of which we are justifiably proud. Here, in the heart of Toronto, we have corporate head offices, top-flight universities, splendid restaurants, outstanding hotels and a thriving arts community, which is right now in the midst of its annual and world-renowned film festival. Toronto has become, in every respect, a city of the world.

Of special interest to today’s topic, Toronto is also a major commercial and financial driver of the Canadian economy. It is the third largest financial centre in North America and twelfth largest in the world.

If you are in business, you need a functioning transportation network, a reliable source of energy, and a healthy and educated workforce. You also need a functioning commercial dispute resolution capacity. There are more than 175 countries in the world. How many jurisdictions offer the advantages of Canada and, in particular, Toronto?

Those advantages depend, in part, on access to fair, timely and expert dispute resolution. Our justice system – including private arbitration – is a critical part of the social and political infrastructure that enables Toronto and Ontario to attract global investors.

Day in and day out lawyers in this city handle countless business deals: selling and developing real estate, financing film projects, restructuring businesses, drafting and entering into sales agreements, and sorting out intellectual property rights. Many of these have national and international components.

Very few of these transactions will ever wind up in a dispute. But, in a competitive and modern society, an effective dispute resolution system must be there for when it is needed. With respect to private arbitration, that means you need competent counsel, a group of skilled arbitrators to choose from and an understanding court system, all working together for a common purpose. Toronto is a place that meets all of these requirements.

Potential users of our commercial dispute resolution system need to be made aware of our well-established, neutral, user-friendly, and expert commercial arbitration capacity, as well as the stellar reputation of our justice system for dealing with commercial disputes. Our arbitration system is structured to respect the need of parties to determine the scope of arbitration and to accommodate the need of parties to craft the process that will work best for their unique commercial interests. Those already familiar with our system will attest to the high-quality of counsel and arbitrators and their well deserved reputation for excellence.

Equally important to the users of our commercial arbitrators, is the knowledge that the courts in Ontario are available to ensure the proper functioning of the arbitral process for all commercial disputes. In this sense the courts are a back-stop for the private arbitration system. That said, where the process itself is fair to the parties, the courts are prepared to limit their intervention to the degree contemplated by the parties in the arbitral agreement.

We in the courts appreciate the synergy that must exist between an expert commercial arbitration system, and a knowledgeable and effective court system. Courts recognize the benefits that result from attracting fast-paced, global commercial transactions to our jurisdiction. And, we wholeheartedly support your efforts to make Toronto an attractive venue and leading centre for commercial arbitration.

While the parties can, of course, control the role that the courts play in their particular dispute resolution process, there have been a number of innovations introduced in the Superior Court of Justice that seek to enhance its accessibility and responsiveness, when court intervention is essential. In other words, the courts have tried to keep up with the times and to do their part to ensure that their limited role in international and domestic commercial arbitrations is perceived as “value added”, as opposed to “interventionist”, to the arbitral process.

The Commercial List in the Toronto Region of the Superior Court of Justice is a prime example of this innovation. Created in 1991, it has become a model in Canada for the provision of timely and effective adjudication of commercial disputes. Deploying special procedures, the Commercial List provides fast-paced, time-sensitive decision-making. It has a cadre of judges who know what is happening in the corporate and commercial world. They understand that money flows rapidly and that time is of the essence. There are many recent examples of our court’s willingness to address disputes on a “real time” basis.

Another key to its success has been the assigning of judges to cases based on their areas of expertise. The world is becoming more complex and more specialized, and the justice system is no exception, or at least it should not be. Seasoned judges presiding over familiar topics are more efficient, more attuned to the nuances of a case, as well as being more receptive to the needs of litigants.

The courts do have a deep familiarity, knowledge and respect for the world of commercial arbitration. We understand the value to the parties of this form of dispute resolution while also recognizing the important, compatible and limited role that we must play when called upon. Other jurisdictions like England and the state of Delaware have been very successful in beefing up their commercial courts for this very reason. Ontario has what it takes to equal this success.

I am firmly convinced the presence of such a responsive, independent, impartial and effective court gives Ontario an inside track when corporations are making decisions about where to arbitrate their disputes. In promoting Toronto as a centre of excellence for commercial arbitrations, this positive and dynamic relationship between the world of ADR and the courts is a significant additional benefit to the parties.

It is, therefore, a worthwhile goal for all of us working in the justice system to actively support the work of TCAS to raise domestic and international awareness of the strengths of our commercial arbitration system, of our civil court system, and of the vibrant relationship between them. The two, the world of private arbitration and our civil courts, go together hand in hand. Our courts and organizations like TCAS should find ways to work together to achieve that goal.

We have the expertise, the experienced counsel and arbitrators, as well as the judicial infrastructure, to attract commercial arbitration work to our jurisdiction. Let’s make sure that the word gets out!

Thank you.

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