The Pendulum Swings: Parties To UNCITRAL Arbitrations Can Tender New Evidence As Of Right On Jurisdictional Challenges

• Published date: 22 July 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Contracts and Commercial Law, Arbitration & Dispute Resolution, Civil Law
• Law Firm: McCarthy Tétrault LLP
• Author: The International Arbitration Blog, Michael D. Briggs and Mark Risebrough

The Russian Federation v Luxtona Limited, 2021 ONSC 4604 ("Luxtona 2021") is the latest installment in a series of decisions addressing the admissibility of new or "fresh" evidence on appeals from an arbitral tribunal's jurisdiction decision arising in the context of the UNCITRAL Model Law on International Commercial Arbitration (the "ModelLaw").

In this case, the Divisional Court of the Ontario Superior Court of Justice, an appellate level court (the "Divisional Court"), held that an application to set aside an arbitral tribunal's (the "Tribunal") jurisdiction under Article 16 of the Model Law proceeds by way of a hearing de novo. By implication, the parties to that application are entitled as of right to adduce new evidence at the application, including expert evidence, so long as that evidence is relevant to the jurisdictional issue.

Facts and Background

Please see our previous post, as well as our still more previous post cited therein, for a detailed account of the events and decisions leading up to Luxtona 2021.

Briefly, the Russia Federation ("Russia") filed an application with the Ontario Superior Court of Justice ("ONSC") challenging the Tribunal's finding that it had jurisdiction to hear a dispute between Russia and Luxtona Limited ("Luxtona"). Russia's view was that, at the hearing of the application, it could, as of right, file new evidence that was not before the Tribunal. Luxtona disagreed, and submitted that Russia could only file new evidence according to the R v Palmer test.¹ Penney J., on behalf of the ONSC, decided that parties challenging a tribunal's award on jurisdiction under Articles 16 and 34 of the Model Law cannot, as of right, file new evidence for the review.² Rather, parties must seek leave to do so according to the test established in R v Palmer. Russia appealed to the Divisional Court.

The Divisional Court's Decision

The Divisional Court reversed Penney J.'s ruling, and held that jurisdictional challenges under the Model Law proceed by way of a hearing de novo, such that arbitral parties are not bound by the evidentiary record that was before the tribunal.³ The Divisional Court's decision was premised on the statutory framework, domestic and international case law, and international trends.

The Statutory Framework

The Divisional Court's interpretation of the applicable statutory framework was largely decisive. The statutory framework has two parts: (i) the Model Law; and (ii) the International Commercial Arbitration Act,...