Russia is a signatory of the Treaty but has never ratified it. Luxtona argues that, under article 45(1) of the Treaty, Russia agreed provisionally to apply the Treaty, including its arbitration provisions, to the extent that this provisional application was not inconsistent with Russia's constitution, laws and regulations. Russia takes the position that it did not agree to apply the Treaty provisionally and that the arbitration provisions of the Treaty are inconsistent with Russian law.
In support of its application, Russia filed new expert evidence on Russian law, evidence that had not been before the tribunal. Luxtona objected. Dunphy J. found that Russia was entitled as of right to adduce evidence and thus dismissed Luxtona's objection to it (2018 ONSC 2419).
Competence of arbitral tribunal to rule on its jurisdiction
(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement….
(3) …. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court specified in article 6 to decide the matter, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.9 (emphasis added)
If, pursuant to article 16(2) of the Model Law, an arbitral tribunal rules on a plea that it does not have jurisdiction, any party may apply to the Superior Court of Justice to decide the matter.10 (emphasis added)
Application for setting aside as exclusive recourse against arbitral award
(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this article.
(2) An arbitral award may be set aside by the court specified in article 6 only if:
(a) the party making the application furnishes proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or
(ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law; or
(b) the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii) the award is in conflict with the public policy of this State.
I agree that it is important to clearly define the standard of review to be applied by a court in reviewing an arbitral decision on the grounds set out in art. 34 of the Model Law. I also agree that importing and directly applying domestic concepts of standard of review, both from administrative law and from domestic review by appeal courts of trial decisions, may not be helpful to courts when conducting their review process of international arbitration awards under art. 34 of the Model Law.12
The starting point for determining the appropriate standard of review to be applied… is the words of art. 34(2) of the Model Law…. The article provides that an award may only be set aside if the objecting party proves one of the enumerated deficiencies.13
The nature of the present exercise is, in my opinion, also unaffected where an arbitral tribunal has either assumed or, after full deliberation, concluded that it had jurisdiction. There is in law no distinction between these situations. The tribunal's own view of its jurisdiction has no legal or evidential value, when the issue is whether the tribunal had any legitimate authority in relation to the Government at all.
… [T]he court may have regard to the reasoning and findings of the alleged arbitral tribunal, if they are helpful, but it is neither bound nor restricted by them.
In Dallah, the jurisdiction issue did not challenge the content of the award itself, but rather the ability of the tribunal to adjudicate: in particular, whether one party had committed to the arbitration process. In that context, the English Supreme Court's approach was to address the issue de novo, rather than as a review of the decision of the tribunal. One could view this approach as a variant of applying the correctness standard. As the court pointed out, the decision of the tribunal is given prima facie credit, because the onus is on the challenging party to set it aside. But because the court was deciding the validity of the agreement issue de novo, it heard evidence, including expert evidence on the French law governing the issue of the validity of the agreement, the court concluded that the agreement was not valid, and therefore, the arbitration panel had no jurisdiction.
In this case, the jurisdiction issue is quite different under art. 34(2)(a)(iii). The issue is whether the award itself complies with the submission to arbitration and, in particular, whether it "contains decisions on matters beyond the scope of the submission to arbitration". Under this subsection, the court is charged with reviewing the award and the submission to determine whether the tribunal stayed within its jurisdiction, based on the content of the submission, and the application of c. 11 of the NAFTA.17
International origin and general principles
(1) In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.
(2) Questions concerning matters governed by this Law which are not expressly settled in it are to be settled in conformity with the general principles on which this Law is based.
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