PRIVATE ALTERNATE DISPUTE RESOLUTION
Family Law in Alberta: Arbitration Agreements – Termination of the Arbitration Process
When parties enter into the arbitration process, they sign an agreement with the arbitrator which forms a legal and binding contract that cannot later be unilaterally terminated by one party. The Calgary Legal Team, a family law firm in Calgary, Alberta is experienced and knowledgeable in these matters and is here to help you make sense of the increasingly complex Alberta family law landscape.
Areas of Concern in Family Law Arbitration Agreements
A family mediation/arbitration agreement is a three-way contract between the parties and the arbitrator. Some agreements set out the grounds upon which an arbitrator may resign, while others allow an arbitrator to resign at any time. By contrast, the standard mediation/arbitration agreement only allows parties to terminate the services of the arbitrator if they jointly agree to do so.
The recent case of SZ v JZ, 2022 ABQB 493 has provided some hope that the wording of the standard family mediation/arbitration agreement allows parties to revert to the litigation process in cases where the arbitrator resigns. In SZ v. JZ, the parties entered into a consent order that contained an agreement to attend mediation/arbitration to resolve 12 outstanding issues, including custody and parenting time. Eight months into the process, the arbitrator unexpectedly resigned, citing workload as the basis for his resignation.
After the arbitrator resigned, the Mother brought an application for parenting in the Court of King’s Bench. Her application was opposed by the Father, who took the position that the Court did not have jurisdiction to hear the Mother’s application and must instead appoint a new arbitrator to continue the arbitration process. In taking this position, the Father relied upon subsection 16(1) of the Arbitration Act (Alberta), which states:
16(1) When an arbitrator’s mandate terminates, a substitute arbitrator shall be appointed, following the procedures that were used in the appointment of the arbitrator being replaced.
A review of the parties’ mediation/arbitration agreement indicated that it contained a clause stating that the parties had appointed the named arbitrator as the sole arbitrator to hear and determine the issues in dispute. For this reason, the Court concluded that subsection 16(1) of the Arbitration Act (Alberta) did not apply to the parties’ arbitration. Instead, the Court ruled that the arbitration process had been terminated pursuant to subsection 41(1)(c) of the Arbitration Act (Alberta) which states:
41(1) An arbitration is terminated when
…
(c) the arbitrator’s mandate is terminated, if the arbitration agreement provides that the arbitration is to be conducted only by that arbitrator.
Based on the Court’s decision in SZ v. JZ, parties to mediation/arbitration agreements should consider specifying in clear language that the arbitration is to be conducted by only that arbitrator. Doing so will allow parties the option of reverting to the litigation process if the arbitrator later resign or the parties jointly agree to terminate the arbitrator’s services.
Whether you are in the process of family law arbitration or are considering whether it might be right for your situation, contact our team of Alberta family lawyers at The Calgary Legal Team for a free consultation.