Proposed Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act: Consultation Paper

Explanatory Note

The Canadian Transportation Agency (Agency) is an independent, quasi-judicial tribunal. It makes decisions and determinations on a wide range of matters involving modes of transportation under the authority of Parliament, as set out in the Canada Transportation Act, S.C. 1996, c. 10 as amended (Act).

Our vision: is a competitive and accessible national transportation system that fulfills the needs of Canadians and the Canadian economy.
Our mission: is to be a respected and trusted tribunal and economic regulator through efficient dispute resolution and essential economic regulation.
Our values: include integrity, fairness, transparency and quality of service. The Agency is committed to expand client-oriented resources and develop new ones to facilitate access to dispute resolution services.

Taking into account these important principles and values, the Agency is establishing two sets of rules of procedure for two types of arbitrations:

proposed Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act (Sample Rules) for arbitration requested by the parties; and,
proposed Rail Arbitration Rules for Arbitrations under Section 169.31 of the Canada Transportation Act (Rail Arbitration Rules) for arbitration requested by shippers.

This consultation paper provides the proposed Sample Rules of Procedure for Arbitrations under Section 36.2 only. Our aim is to make these proposed Sample Rules available as a resource tool to parties who agree to arbitrate under section 36.2, recognizing that these parties are free to agree on the rules of procedure to be applied in these arbitrations. The Sample Rules will be available to them, to be adopted by the parties if they so choose.

While there are similarities between the procedures proposed for the two types of arbitration, arbitrations under section 169.31 are subject to extensive legislative requirements and the proposed Rail Arbitration Rules will be promulgated by regulation. As such, the proposed Rail Arbitration Rules will be addressed in a separate consultation paper.

Arbitration under section 36.2 is being offered by the Agency for railway matters covered under Part III of the Act. Arbitration will augment the existing rail dispute resolution options (facilitation, mediation, final offer arbitration, adjudication) and encourage the use of more effective and efficient alternative dispute resolution. The purpose of the proposed Sample Rules is to provide the parties to a dispute with a procedural framework to achieve a just and cost effective determination of matters in dispute in an efficient manner taking into account the values and practices of arbitration proceedings.

Under the proposed Sample Rules, and consistent with other arbitration rules and practice, the arbitrator will be appointed by the Agency on receipt of a Submission for Arbitration and shall be wholly independent and impartial. The person appointed as arbitrator may not act in any other proceedings before the Agency in relation to any matter at issue in the arbitration. The arbitration process will be confidential, unless the parties agree otherwise.

The powers of the arbitrator will be within the parameters of the Act as well as any commercial contract or agreement between the parties, where applicable. In particular, unless the parties explicitly agree otherwise, the arbitrator will not have the power to order the payment of compensation for loss or damages sustained as a result of the actions of the other party to the arbitration. The rules of procedure may be modified in a given case where the parties have agreed to apply different rules and the arbitrator agrees it would improve the efficiency and effectiveness of the arbitration.

In accordance with the requirements of section 36.2 of the Act, the parties must submit evidence of their agreement to arbitrate any dispute relating to any railway matter covered by Part III of the CTA.

Arbitration proposals and briefs will be exchanged simultaneously, and arbitration hearings will be held at the head office of the Agency, unless the parties agree on an alternative location. Electronic communication, such as web-casting or video- or tele-conferencing, may be used and no transcripts will be taken.

The costs of the arbitration will be shared equally by the parties, including the arbitrator’s fee where a commercial arbitrator is used, as well as the travel and accommodation expenses of the arbitrator and Agency staff required by the arbitrator, where the arbitration hearing is held at a location other than the Agency’s headquarters.

Arbitration awards will be issued confidentially to the parties and the arbitrator may also provide written reasons for the award. Unlike final offer arbitration, the arbitrator will not be limited to choosing between one or the other party’s position—the award may be consistent with the position of either party or may be different from the positions of the parties. The duration of the award will be the time agreed upon by the parties or, in the absence of an agreement, the time found to be reasonable by the arbitrator.

Arbitration awards will be final and binding on the parties, subject only to a limited opportunity for the arbitrator to correct clerical or typographical errors; accidental errors, slips, omissions and the like; or arithmetical errors.

Proposed Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act

General

1. Purpose

The purpose of these Rules is to enable the parties to a dispute to achieve a just and cost effective determination of matters in dispute in a just and efficient manner taking into account the values and practices of arbitration proceedings.

These Rules will be interpreted and applied to secure the just, most expeditious and least expensive resolution of proceedings through arbitration.

The arbitration process will provide the parties with a fair and equal opportunity to present their positions and respond to the position of the other party.

The arbitrator will have the opportunity to consider submissions and render a decision with due regard for fairness and efficiency.

2. Interpretation

In these Rules:

“Agency”: means the Canadian Transportation Agency.
“arbitrator”: means a person, including a Member or staff of the Agency, appointed by the Agency to act as an arbitrator of a dispute pursuant to section 36.2 of the Act.
“arbitration award”: means the decision of the arbitrator for the purpose of resolving the issues in dispute between the parties, including written reasons.
“business day”: means a regular business day and excludes Saturdays, Sundays and statutory holidays applicable to the Agency at its head office.
“Act”: means the Canada Transportation Act, S.C. 1996, c. 10, as amended.
“day”: means a calendar day unless otherwise specified.
“document”: includes any information recorded or stored by means of any device, including data and information in an electronic form.
“party”: includes a railway company and others that have an operational or commercial relationship with them, including, but not limited to, shippers, terminal operators, and transloaders.
“Rules”: mean the Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act, as amended by the Agency from time to time.

3. Application

The arbitrator will be bound by any applicable written agreement, including confidential contract, between the parties.
These Rules provide the procedures to be applied to arbitrations conducted under section 36.2 of the Act. The arbitrator may modify the procedures to be applied in a given case where the parties have agreed to apply different rules of procedure and where, in the judgement of the arbitrator, it would improve the efficiency and effectiveness of the arbitration.

4. Model dispute resolution clause

Parties who agree to arbitrate under section 36.2 of the Canada Transportation Act and who wish to adopt these Rules may use the following clause in any agreement or contract:

All disputes arising out of or in connection with this agreement, or in respect of any legal relationship associated with or derived from this agreement, shall be arbitrated and finally resolved, as per section 36.2 of the Canada Transportation Act and the Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act. The arbitration award shall not be subject to appeal or review except in accordance with the section 32 of the Sample Rules of Procedure for Arbitrations under Section 36.2 of the Canada Transportation Act. The place of arbitration, unless otherwise agreed, shall be the head office of the Canadian Transportation Agency. The language of the arbitration shall be English or French [specify language].

5. Confidentiality

The arbitration process shall be confidential, unless the parties otherwise agree. The Agency, the arbitrator, the parties and the witnesses shall treat all meetings, communications, proceedings, documents disclosed in proceedings, and the arbitration award as confidential. Nothing in this section shall preclude disclosure of such information to legal counsel, technical experts, and advisors; provided that each shall be advised of this section and the party making disclosure shall continue to be liable for any breach of confidentiality.

6. Time

In the calculation of time, the first day shall be excluded and the last day included.

7. Waiver of right to object

A party that knows that any provision of, or requirement under, these Rules has not been complied with and yet proceeds with the arbitration without promptly stating an objection shall, unless the arbitrator otherwise determines, be deemed to have waived the right to object.

8. Language of arbitration

The parties may agree, in writing, that the arbitration will be held in English or in French. In default of any such agreement, the arbitrator may determine the language of the arbitration and the parties shall share equally the cost of any translation service required.

9. Delivery of documents

Any document required by the Rules to be delivered may be delivered either by personal delivery, e-mail or facsimile.
Personal delivery shall be deemed to have been effected on the day of such delivery to the recipient’s address, or that of the recipient’s legal counsel or other authorized representative, where applicable.
E-mail or facsimile delivery shall be deemed to have been effected when sent. Any recipient may request a confirmation copy of any document sent by e-mail or facsimile to be delivered by mail.

Submission for Arbitration

10. Submission for Arbitration

Arbitration services may be requested by filing a Submission for Arbitration with the Agency. A complete Submission for Arbitration must contain:
1. the names and full contact information for all parties to the dispute, including mailing addresses, telephone numbers, fax numbers and e-mail addresses;
2. the names and full contact information of legal counsel or other authorized representative of the parties, if any;
3. a copy of any applicable written agreement, including confidential contract, relevant to the dispute;
4. a concise statement of the relevant facts and the matters in dispute;
5. the remedy sought and offered solution(s); and,
6. evidence of the agreement of both parties to arbitrate the dispute.

11. Proposals on the matters submitted for arbitration

Within 10 days after the filing of any Submission for Arbitration, the parties shall file with the Agency their respective proposals, containing the details of the specific terms requested for each of the matters submitted for arbitration.

Arbitrator

12. Appointment of arbitrator by the Agency

The Chair of the Agency will appoint the arbitrator within 3 days after the exchange of the parties’ proposals.
If the arbitrator is a Member or staff of the Agency, the selection of the arbitrator will be at the discretion of the Chair of the Agency.
If the arbitrator is a commercial arbitrator, the parties will be provided with the list of arbitrators and requested to provide to the Agency a list of 10 preferred candidates, in order of preference, and a list of any candidates it objects to on grounds such as potential conflict of interest or perceived bias. The Chair of the Agency will then select an arbitrator, taking the parties' common candidates and order of preference into account. If the parties cannot agree on an arbitrator, or if an acceptable candidate is unable to act, the Chair of the Agency will select an arbitrator. When doing so, the Chair will consider objections by the parties, any specific qualifications requested by the parties, the nature of the dispute, and any other considerations in order to secure the appointment of a qualified and impartial arbitrator.

13. Independence and impartiality

An arbitrator shall be and remain wholly independent and impartial.

14. Communications with arbitrator

No party to the arbitration or person acting on behalf of a party shall communicate with the arbitrator in the absence of the other party.

15. Substitution

If an arbitrator is incapable of acting, the Chair of the Agency may declare the office vacant and appoint, as quickly as possible, a substitute arbitrator who, subject to (2) below, will continue the proceedings.
Where an arbitrator is replaced, any hearings previously held shall be repeated in the interests of fairness.

16. Agency staff assistance

The Chair of the Agency may, at the request of the arbitrator, assign administrative, technical and legal assistance to the arbitrator.
Agency staff that provide administrative, technical or legal assistance to the arbitrator may not act in any other proceedings before the Agency in relation to any matter at issue in the arbitration.

17. General powers of arbitrator

Subject to the agreement of the parties, the arbitrator may have the power to:
1. interpret and apply the terms of any written agreements, including confidential contracts, between railway companies and shippers or other partners, including all rates, terms and conditions of service, and associated charges;
2. determine what constitutes a railway company’s level of service obligation in a particular case and order measures to ensure that this obligation is fulfilled;
3. make an interim decision on any matter with respect to which a final award may be made;
4. grant such interim measures of protection as the arbitrator finds appropriate; and,
5. make an interim decision granting injunctive relief to preserve the status quo pending completion of the arbitration, including cease and desist or specific performance orders.
Unless the parties explicitly agree in a written agreement, including confidential contract, or otherwise, the arbitrator will not have the power to order the payment of compensation for loss or damage sustained as a result of actions of either party to the arbitration.
Without limiting the generality of any other rule that confers jurisdiction or powers on the arbitrator, the arbitrator may:
1. facilitate or help settle the dispute or any issue under dispute between the parties up to and including at the first pre-arbitration meeting where, in the judgement of the arbitrator, this would lead to a more effective and efficient resolution of any of the issues in dispute;
2. order an adjournment of the arbitration from time to time;
3. order the inspection of documents, goods or other property, including a view or physical inspection of property;
4. extend or abridge a period of time fixed or determined by the arbitrator or set out in these Rules;
5. hear motions and make procedural orders, including the settling of matters at pre-arbitration meetings that do not deal with the substance of the dispute;
6. request further statements clarifying the issues in dispute;
7. determine and give directions with respect to procedural matters, having regard to section 1;
8. direct that all evidence and argument be given in writing and dispense with an oral hearing;
9. rule on any objections with respect to the existence or validity of the agreement that contains an arbitration clause, and for that purpose,
  1. an arbitration clause that forms part of an agreement shall be treated as independent of the other terms of the agreement; and
  2. a decision by the arbitrator that the agreement is null and void shall not invalidate the arbitration clause unless specifically so found by the arbitrator; and,
10. appoint one or more independent external experts to report on specific issues as determined by the arbitrator to be necessary. As per section 30, below, the cost of any such expert(s) shall be shared by the parties on an equal basis.

18. Settlement

If, during the arbitration, the parties settle the dispute, the arbitrator shall, upon receiving confirmation of the settlement, terminate the arbitration and, if requested by the parties, record the settlement in the form of an arbitration award on agreed terms.

Pre-arbitration process

19. First pre-arbitration meeting

Within 7 days after their appointment, the arbitrator shall convene a pre-arbitration meeting of the parties, which may be held by electronic communication such as webcasting or video- or teleconferencing, to:
1. facilitate or encourage settlement of the dispute;
2. clarify and establish the issues;
3. identify the length of time required for the arbitration hearing;
4. schedule the arbitration hearing;
5. identify the type of information that will be admissible at the arbitration hearing;
6. determine a timetable for the completion of all pre-arbitration matters, including:
  1. the exchange of arbitration briefs, including information in support of the proposals;
  2. the exchange of any interrogatories; and,
  3. the tentative date and time for a second pre-arbitration meeting, should the arbitrator find it appropriate; and,
7. identify and determine any other matters relevant to the arbitration.
As soon as practicable after the first pre-arbitration meeting, the arbitrator shall issue and deliver to the parties a summary of the meeting, including any agreements and rulings made, the time and date of the second pre-arbitration meeting, if applicable, and the time, date and place of and a written agenda for the arbitration hearing.

20. Exchange of arbitration briefs

At a time to be determined by the arbitrator based on consultations with the parties but no later than 20 days after the first pre-arbitration meeting, each party must simultaneously deliver to the arbitrator and to the other party a written arbitration brief.
Each party’s arbitration brief must contain:
1. the relief or remedy sought;
2. the material facts supporting its position, including any agreed statement of facts and references to the relevant documentary evidence in support of its position;
3. the relevant documentary evidence in support of its position;
4. sworn witness statements from any person intended to give evidence at the arbitration hearing;
5. written opinions from any expert intended to give evidence at the arbitration hearing, including:
  1. the qualifications of the expert;
  2. the expert’s opinion; and,
  3. the facts upon which the expert’s opinion is based; and,
6. arguments in support of its position, set out in order of priority in concise numbered paragraphs and including references to the relevant documentary evidence submitted in support of its position.
Unless otherwise agreed by the parties and the arbitrator, if a party fails to deliver an arbitration brief to the other party and to the arbitrator in accordance with (1) above, it shall be deemed to admit the allegations in the arbitration brief of the other party.

21. Amendment of arbitration briefs

The arbitrator may, upon such terms as the arbitrator finds appropriate, allow a party to amend its arbitration brief during the course of the arbitration, unless the arbitrator considers the delay in amending the arbitration brief to be prejudicial to a party or considers that the amendment goes beyond the terms of the Submission for Arbitration.

22. Second pre-arbitration meeting (optional)

Within 5 days after the exchange of arbitration briefs, the arbitrator may, if the arbitrator finds it appropriate, convene a second pre-arbitration meeting of the parties, which may be held by electronic communication such as webcasting or video- or teleconferencing, to:
1. further clarify the issues;
2. confirm the length of time required for the arbitration hearing;
3. identify further evidence that the arbitrator requires to be produced at the arbitration hearing;
4. determine an agreed statement of facts, if any;
5. determine the witnesses required to attend the arbitration hearing for cross-examination and the dates/times for their attendance; and,
6. identify and determine any other matters relevant to the arbitration.
As soon as practicable after the second pre-arbitration meeting, the arbitrator shall issue and deliver a summary of the meeting, outlining any agreements and rulings made, and an amended written agenda for the arbitration hearing, where applicable.

Arbitration hearing

23. Time and Place of arbitration hearing

Unless otherwise agreed by the parties, the arbitration hearing shall take place at the head office of the Agency and shall commence within 8 days after the second pre-arbitration meeting, if any, or after the exchange of arbitration briefs if no second pre-arbitration meeting is held.
The arbitrator may conduct part or all of the arbitration hearing by electronic communication such as webcasting or video- or teleconferencing.
On request of the parties, the arbitrator may convene the arbitration hearing or any other meeting at any other place where the arbitrator finds convenient or necessary for consultation, to hear witnesses, experts or the parties, or for the inspection of documents, goods or other property.

24. Conduct of the arbitration hearing

Subject to these Rules, the arbitrator may conduct the arbitration hearing in the manner the arbitrator finds appropriate.
No transcript of the arbitration hearing shall be taken.
The record of the arbitration hearing shall consist of the documents and exhibits produced and filed by the parties, including any witness statements and expert opinions.

25. Evidence

Subject to the requirement contained in paragraph 20(2)(c), the parties may offer such evidence as is relevant and material to the dispute and shall produce such evidence under oath as the arbitrator may find necessary. Strict conformity to legal rules of evidence will not be necessary.
All evidence shall be taken in the presence of the arbitrator and all of the parties, except where any of the parties is voluntarily absent, in default or has waived the right to be present.
The arbitrator shall determine the admissibility, relevance, and materiality of the evidence offered and may exclude any evidence found by the arbitrator to be repetitive.
The arbitrator will be bound by applicable principles of legal privilege, such as those involving the confidentiality of communications between legal counsel and a client.

26. Witnesses

The arbitrator may determine the manner in which witnesses are to be examined and, save for a party or the person nominated as that party’s representative for the purpose of the arbitration, may require witnesses to absent themselves from an arbitration hearing during the testimony of other witnesses.
Witness statements filed in the arbitration briefs may be accepted in lieu of examination in chief and shall be subject to cross-examination and re-examination only.
The arbitrator may, on agreement of the other parties, determine that a witness not be present at the arbitration hearing for cross examination.

27. Default of a party

Where a party, without sufficient cause, fails to appear or to produce evidence, the arbitrator may continue an arbitration hearing after being satisfied that a reasonable attempt has been made to communicate with the defaulting party.

28. Closure of arbitration hearing

Where the parties have, on inquiry, advised they have no further evidence to give or submissions to make, or the arbitrator considers further proceedings to be unnecessary or inappropriate, the arbitrator may close the arbitration hearing.
On own motion or on the application of a party, the arbitrator may, in exceptional circumstances, re-open the arbitration hearing to receive evidence or submissions concerning a matter at any time before the issuance of the arbitration award.
On own motion or on agreement of the parties, the arbitrator may, in exceptional circumstances, terminate the arbitration or arbitration hearing where, in the judgement of the arbitrator, to continue would no longer be effective, efficient or productive.

Arbitration award

29. Arbitration award

The arbitrator may make an arbitration award that is consistent with the position of any of the parties or may choose to make an arbitration award that is different from the positions of the parties.
Within 15 days after the completion of the arbitration hearing, the arbitrator shall provide each party with an originally signed copy of any arbitration award.
The arbitrator may make the arbitration award applicable to and binding on the parties for any period of time agreed upon by the parties or, in absence of agreement, for any period of time that the arbitrator considers reasonable.
The arbitrator shall provide written reasons for the arbitration award.
The railway company shall, where applicable and without delay after the arbitration award is made, set out any rate or rates or conditions associated with the movement of goods contained in the arbitration award in a tariff of the railway company or a confidential contract.

30. Costs

Where the arbitrator appointed is a commercial arbitrator, each party shall be responsible for one-half of the arbitrator’s fee.
Costs related to the arbitration also include the cost of any expert appointed under paragraph 17(3)(j), and one-half of all travel and accommodation expenses of the arbitrator and Agency staff required by the arbitrator where the arbitration hearing is held at a location other than the Agency headquarters.

31. Final and binding

Subject only to correction pursuant to section 32, below, the arbitration award shall be final and binding on the parties. In particular, the arbitration is not a proceeding before the Agency and the arbitration award is not a decision or order of the Agency for purposes of sections 32, 40 and 41 of the Act.

32. Corrections to an award

On own motion or on application of a party, the arbitrator may amend or vary an arbitration award to correct:
1. a clerical or typographical error;
2. an accidental error, slip, omission or other similar mistake; or
3. an arithmetical error made in a computation.
A corrected arbitration award shall be provided to the parties by the arbitrator and shall constitute the final and binding arbitration award.

Date modified:: 2013-01-23