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

  • OPEC decision stabilizes oil prices, but for how long?

    Economic CBC News
    In one of the least surprising OPEC meetings in a while, members of the cartel of oil-exporting countries and their non-member allies agreed to extend oil production cuts on Thursday, which will support the price of oil and should continue to help pave the way for Alberta's economic recovery. Source
  • The case for BlackBerry at $45 US a share

    Economic CBC News
    BlackBerry Ltd. shares have been on a hot streak — rising more than 60 per cent in recent weeks — and one technology analyst thinks some of the company's new products have the potential to help push the stock to $45 US in three years. Source
  • Malicious hackers say they demanded $50,000 ransom for stolen Bell data

    Economic CBC News
    A pair of malicious hackers say they demanded that Bell pay a $50,000 US ransom to prevent stolen customer data from being shared online, according to a person claiming responsibility for the theft. That person — who communicated with CBC News via encrypted chat using the handle "exodus" — says a ransom email was sent to Bell on May 5, detailing the extent of the breach and the thieves' terms. Source
  • Kinder Morgan announces final investment decision on Trans Mountain pipeline

    Economic CTV News
    VANCOUVER -- Kinder Morgan says it will proceed with the $7.4-billion Trans Mountain pipeline expansion as long as it secures satisfactory financing for the project through its initial public offering. The Texas-based company, in conjunction with its indirect subsidiary Kinder Morgan Canada, announced on Thursday its final investment decision on the project, which is conditional on the successful completion of the IPO. Source
  • Amazon opens first brick and mortar New York bookshop

    Economic CTV News
    Online retail giant Amazon on Thursday opened its first brick and mortar bookstore in New York, selling a limited range of its highest-rated books and letting customers browse products as in times gone by. Amazon, which launched as an online bookseller in 1995 but which now sells everything from designer clothes to groceries, bided its time before venturing into the US cultural capital. Source
  • Ontario threatens its own protectionism in fight against Texas Buy American bill

    Economic CTV News
    TORONTO - Ontario has hired lobbyists in Texas and is threatening protectionist measures of its own as it tries to convince state officials not to pass a Buy American bill. Premier Kathleen Wynne claimed victory last month after a successful Ontario push to stop similar provisions in New York state. Source
  • Alberta Energy Regulator to reconsider Suncor tailings plan it rejected

    Economic CTV News
    CALGARY -- Alberta's energy watchdog has agreed to reconsider its rejection of a plan by oilsands giant Suncor to clean up its tailings ponds. The Alberta Energy Regulator denied the Calgary-based company's applications in March, saying they did not satisfy requirements and a new proposal was needed. Source
  • Bank CEOs say Home Capital issues not widespread

    Economic CTV News
    TORONTO -- The CEOs of two of Canada's biggest banks say liquidity troubles at mortgage lender Home Capital are not indicative of a broader problem, but they are monitoring their mortgage portfolios in light of concerns about high house prices. Source
  • Payment systems modernization long overdue: BoC official

    Economic CTV News
    OTTAWA -- A senior Bank of Canada official says modernization of the country's core payments infrastructure is long overdue amid the rapid advance of new technologies -- and the risks that accompany them. In prepared remarks of a speech, deputy bank governor Sylvain Leduc says the system must be able to keep up with new payment options that, in recent years, have included innovations like PayPal, e-transfers and Apple Pay. Source
  • Feds release details of delayed methane reduction plan

    Economic CTV News
    CALGARY -- Companies in the energy sector would be required to regularly check equipment for leaks, make repairs, monitor emission levels and report them to Ottawa under the federal government's proposal to reduce methane emissions. Source