Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50873
CLOSING • A roundup of legal department news and trends Chosen 'seat' very important in international arbitration Corporate counsel who do international transactions know — or should know — the importance of a well-crafted arbitration clause that reduces the risks to the corporation in the transaction. But too often they pay insufficient attention to the selection of the seat (or place) of the arbitration. In many cases, the choice may be overlooked or based on factors that have little or no relevance to the corporation's real interests. But the choice of seat can have a profound impact on whether an arbitration clause will be respected and whether an arbitral award will withstand a court challenge to set it aside. The seat of an international arbitration is not just where the hearings will be held — in fact, the hearings may occur elsewhere. The seat determines which jurisdiction's international arbitration law will be the foundation of the arbitration, and which jurisdiction's courts will deal with matters that require court involve- ment before or during the arbitration — and most importantly, after the arbitration if the losing party asks a court to set aside the arbitral award. There is a wide disparity in the treatment of arbitral awards by courts across jurisdictions. This is illustrated dramatically by two recent related court decisions in countries commonly considered leading choices as seats — England and France. The decisions concerned the same arbitration award rendered at the International Chamber of Commerce's International Court of Arbitration seated in Paris. The ICC tribunal found for the claimant. The award was made against the Government of Pakistan, which had not signed the contract but, by its actions, was found to have consented to be bound to the contract. The claimant sought to have the award recognized and enforced in England. The U.K. Supreme Court applied a standard of correctness and held that under French law the arbitral tribunal lacked jurisdiction over Pakistan as a non-signatory to the contract. The claimant then applied to have the award enforced in Paris. The French court applied a more deferential approach, and enforced the tribunal's award. The Dallah cases highlight the significant differences among jurisdictions in terms of the approach taken to arbitration and the recognition and enforcement of arbitral awards. It is important for Canadian corporate counsel to consider care- fully — before the final stages of contract negotiation — which arbitral seat will best serve the corporation's interests. — Barry Leon, Andrew McDougall, and Karin Pagé, Perley-Robertson Hill & McDougall LLP Veta Richardson to succeed Krebs as head of ACC With Fred Krebs retiring after 20 years as president and chief executive officer of the Association of Corporate Counsel, Veta Richardson has been chosen to succeed him at the helm of the organization. Richardson is currently executive direc- tor of the Minority Corporate Counsel Association and will take over at the ACC on July 1. However, she is not a new- comer to the ACC, having served as vice president and deputy general counsel from 1997 to 2000. The Washington, D.C.-based ACC has chapters in Ontario and Quebec, and has expressed interest to expand further. Its outgoing president, Krebs, was a permanent fixture in Canadian in- house counsel events. Richardson also served as in-house counsel to Sunoco Inc. from 1986 to 1997. She is a graduate of the University of Maryland School of Law. Class action against GM, law firm goes forward The Ontario Superior Court has certified a $750-million class action lawsuit against General Motors of Canada Ltd. and Cassels Brock & Blackwell LLP. Former GM dealer Trillium Motor World Inc. of Toronto, designated to represent a large number of former GM dealers in Ontario, claims the car company breached provincial franchise laws in eliminating dealer- ships as part of the 2009 auto bailout by the governments of Canada and Ontario. One of the conditions for GM to access billions of dollars of government funding was the elimination of a large number of GM dealers. Cassels Brock is named in the lawsuit as the firm acted for the Canadian GM dealers in anticipation of a GM restructuring, and the dealers allege Cassels Brock was in a conflict of interest by simultaneously acting for the government of Canada in connection with the auto bailout. "I have concluded that the issues other than damages are capable of being resolved on a common basis," Justice George R. Strathy noted in his decision. The Canadian and Ontario governments gave $4 billion in emergency loans to GM and other Canadian subsidiaries of U.S. automakers in early 2009. Much of it has since been paid back. 46 • APRIL 2011 INHOUSE