Quebec CA Clarifies Arbitrators’ Powers

Éric Préfontaine

June 17, 2011

By Luis Millan, The Lawyers Weekly

In a long-awaited ruling that appears to have put an end to a long-standing controversy over the jurisdiction of arbitrators in Quebec, the Quebec Court of Appeal confirmed that arbitrators have the power to order specific performance of a contract, but held that only the Quebec Superior Court can issue injunctions.

Until the recent ruling, it was far from clear whether arbitrators could compel a party to execute a contract in the event of a breach of contract, given that the remedy was largely perceived in Quebec’s legal community to be akin to an injunction, noted Éric Préfontaine, a partner with Osler, Hoskin & Harcourt LLP in Montreal who successfully pled the case of Service Bérubé ltée v. General Motors du Canada ltée, [2011] J.Q. no 2781 [with Anne-Marie Lizotte and Silvana Conte].

“By confirming that arbitrators can issue orders granting specific performance, it has changed the nature of arbitration in Quebec,” remarked Préfontaine, who practises litigation and general commercial law. “In order to avoid eviscerating the powers of an arbitrator, the Court of Appeal had to reconcile between the two principles and make a distinction between an injunction and an order granting specific performance. The court held that an order granting specific performance should not be necessarily considered to be an injunction. Some lawyers would consider this to be an odd distinction.”