Rabbinical arbitration award upheld in Ontario's top court

TORONTO -- An award granted by a Jewish court in New York to a Canadian businessman should stand despite a serious breach of the arbitration agreement involved, Ontario's top court ruled Thursday.

See Full Article

In its decision, the Court of Appeal rejected arguments against overturning an earlier ruling that upheld the US$400,000 award to Moshe Lipszyc.

The award came after Lipszyc, of the Toronto area, had a falling out with his business partner, Joseph Popack, of New York. The men agreed to submit their dispute to arbitration before a rabbinical court in New York, which held eight weeks of hearings in August 2013.

During the hearings, Lipszyc's representative suggested the panel should hear from a previous arbitrator, Rabbi Aharon Schwei. Popack did not object. Without telling either man, the panel met Schwei but, as per the arbitration agreement, made no record of the meeting. It did later state the information obtained from the rabbi had no impact on its decision.

Popack turned to Ontario Superior Court to set aside the award on the grounds that the panel had breached the agreed procedure by meeting secretly with Schwei.

In her ruling last June, Justice Wendy Matheson agreed the arbitral tribunal had committed a "significant" breach of the arbitration agreement by failing to give proper notice of the meeting with the rabbi. She nevertheless upheld the award.

Among other things, Matheson found the parties had agreed to defer to the arbitral tribunal's discretion to set its own process. She also noted the panel only met the rabbi -- a neutral party -- at Lipszyc's request and without an objection from Popack, and that a key witness had died in the interim.

In siding with Lipszyc, the Appeal Court said Matheson's decision was discretionary and owed strong deference absent any glaring error.

The court also took issue with Popack's conduct, saying he had made no formal complaint at the time about the panel's procedure and did not demand a hearing to raise his concerns. Instead, he let the panel know -- without telling Lipszyc --that he would only want a hearing if the panel decided Schwei's evidence was important.

"His conduct strongly suggests a tactical decision whereby Mr. Popack was content to allow the panel to finish its adjudication and make its award despite the improper ex parte meeting with Rabbi Schwei," the Appeal Court said.

"Mr. Popack positioned himself so that he could decide to raise the issue formally and on notice to Mr. Lipszyc only if he was not satisfied with the award given by the panel."

Setting aside the panel's decision in such circumstances, the Appeal Court ruled, would "eviscerate" the idea that arbitral decisions are generally final.

The court also awarded Lipszyc $25,000 in costs.

Some legal experts said the decision underlined the risk of giving an arbitral tribunal unfettered discretion, and the importance of crafting a written agreement that protects participants when an arbitrator allegedly acts improperly. In this case, the men had agreed no record of the proceedings would be kept.



Advertisements

Latest Economic News

  • S&P downgrades Manitoba's credit rating

    Economic CTV News
    WINNIPEG -- The Manitoba government has had its credit rating downgraded for the second time in 13 months by S&P Global Ratings. The international bond-rating agency said the province continues to post large deficits, which are adding to a long-term debt left by the former NDP government. Source
  • Cannabis executive says producers unlikely to meet demands of consumer market

    Economic CTV News
    MONTREAL - An official with a large producer of medical cannabis doubts Canada's licensed companies will be able to adequately supply consumers come next July. Cam Battley, executive vice-president of Aurora Cannabis Inc., says the existing capacity and what is envisioned will not be sufficient to meet the needs of the adult consumer market. Source
  • Sweetened bid for Tembec wins support from shareholders who opposed deal

    Economic CBC News
    Rayonier Advanced Materials Inc. has raised its takeover offer for Tembec Inc. to win the support of two of the forestry company's largest shareholders who had threatened to block the friendly deal. Rayonier and Tembec said Oaktree Capital Management LP and Restructuring Capital Associates LP have now agreed to support the takeover. Source
  • Norbord OSB mill in 100 Mile House, B.C., resumes production after wildfires

    Economic CBC News
    Norbord Inc. says its oriented strand board mill in 100 Mile House, B.C., resumed production over the weekend. The company says work restarted after an evacuation order for 100 Mile House and nearby communities was lifted. Source
  • European car companies act as cartel & collude together, lawmakers allege

    Economic CBC News
    Car stocks tumbled on Monday after a report in Der Spiegel that VW, BMW, Audi and Porsche may have colluded to fix the prices of diesel emissions treatment systems. (Michel Euler/Associated Press) Source
  • OPEC moves to cap Nigerian oil output, boost production cut compliance

    Economic CBC News
    OPEC moved on Monday to cap Nigerian oil output and called on several members to boost compliance with production cuts to help clear excessive global stocks and support flagging prices. OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million barrels per day (bpd) from January 2017 until the end of March 2018. Source
  • IMF raises outlook for economic growth in Canada, expected to be tops for G7

    Economic CTV News
    OTTAWA -- The International Monetary Fund expects Canada to lead the G7 for economic growth this year. The IMF raised its outlook for Canada as part of its latest world economic outlook update. Source
  • IMF downgrades outlook for British economy even as Europe growing faster than expected

    Economic CBC News
    The International Monetary Fund has revised down its 2017 growth forecast for the British economy following a weak first quarter that suggested the country's exit from the European Union was starting to weigh on consumers and businesses. Source
  • IMF says Canadian economy poised to grow 2.5% this year, best in G7

    Economic CBC News
    The International Monetary Fund has revised down its 2017 growth forecast for the British economy following a weak first quarter that suggested the country's exit from the European Union was starting to weigh on consumers and businesses. Source
  • Infrastructure bank studied as funding option for U.S.-Canada high-speed rail

    Economic CTV News
    OTTAWA -- Washington state is exploring whether Canada's new infrastructure bank could help finance a multibillion-dollar proposal for high-speed rail between Vancouver and the U.S. northwest. The Trudeau government's soon-to-be-launched, $35-billion infrastructure bank will seek to use public funds as leverage to attract billions more in private investment for major infrastructure projects, such as bridges, transit systems and rail lines. Source