Popack et al. v. Lipszyc et al.
[Indexed as: Popack v. Lipszyc]
2018 ONCA 635
Court of Appeal for Ontario, Doherty, D.M. Brown and Nordheimer JJ.A.
July 12, 2018
Arbitration — Award — Enforcement — Parties submitting commercial dispute to arbitration by New York rabbinical court — Arbitration
agreement precluding any right of appeal — Arbitrator issuing award in
favour of applicant in amount significantly less than that which he had
sought — Applicant applying unsuccessfully to set aside award — Applicant then applying under arts. 35 and 36 of UNCITRAL Model Law on
International Commercial Arbitration for recognition and enforcement
of award — Application judge erring in finding that award was “not yet
binding” on parties — Award framed as final — Arbitrator’s potential
jurisdiction to entertain respondent’s claim for costs of applicant’s set
aside proceedings not affecting binding nature of award.
In 2013, the applicant obtained an international commercial arbitration award
against the respondent from a rabbinical court in New York (the “arbitrator”) in
an amount which was significantly less than he had sought. The arbitration
agreement precluded any right of appeal. The applicant applied unsuccessfully to
set aside the award under art. 34 of the UNCITRAL Model Law on International
Commercial Arbitration. He then applied under arts. 35 and 36 of the Model Law
for the recognition and enforcement of the award. Article 36(1)(a)( v) of the Model
Law states that recognition or enforcement of an arbitral award may be refused
only if the party against whom the award is made furnishes proof that “the award
has not yet become binding on the parties”. The arbitration judge found that the
award had not yet become binding on the parties as (1) there was a pending proceeding to appeal the award; (2) the respondent had expressed an intention to
pursue further issues related to the subject matter arbitrated ( i.e., he was seeking
to deduct his costs of the applicant’s set aside proceedings and enforcement proceedings from the amount awarded); and (3) two post-award statements from the
arbitrator indicated that the arbitration process was not yet complete. The applicant appealed.
Held, the appeal should be allowed.
The standard of review applicable to the interpretation of the Model Law is
To the extent that the application judge was under the impression that the
respondent was entitled to take steps to appeal the award, he made a palpable and
overriding error in interpreting the arbitration agreement, which specifically precluded any right of appeal.
The respondent’s request that the arbitrator deduct from the award his costs of
the set aside and enforcement proceedings did not fall within the procedure under
art. 33(1)(a) of the Model Law, which enables a tribunal to correct an award, or
art. 33(3), which enables a tribunal to make an additional award. Article 33(1)(a) is
directed towards simple arithmetic mistakes or typographical errors, and the purpose of art. 33(3) is to ensure that the tribunal may complete its mission if it has
omitted from its award decisions in relation to any of the claims presented in the
proceedings. The respondent’s stated intention to seek costs relating to the set