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Proposed Rail Arbitration Rules for Arbitrations under Section 169.31 of the Canada Transportation Act
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 these rules of procedure for arbitrations requested by shippers, in accordance with new section 169.31 of the Act.
Legislative amendments to the Act, as set out in Bill C-52, the Fair Rail Freight Service Act, have been made, in part, to provide a right to shippers to establish rail service agreements with railway companies by way of arbitration where the agreements cannot be negotiated commercially.
The introduction of these new arbitration provisions augments dispute resolution options for shippers and railway companies. As an alternative dispute resolution mechanism, arbitration is faster and less formal than adjudication, allowing for a more expedited resolution. The proposed Rail Arbitration Rules have been developed to support this mechanism, to be understandable and predictable in their application and to provide a fair process that can be completed within the legislative time frames.
The following summary of features of the new dispute resolution mechanism is based on provisions contained in both the legislative amendments as well as in the proposed Rail Arbitration Rules.
Under the proposed Rail Arbitration Rules, and consistent with other arbitration rules and practice, the arbitrator will be appointed by the Agency on receipt of proposals 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.
Upon request of one party, the information related to the arbitration process will be confidential. However, the Agency will use past arbitration decisions internally to encourage consistency and, from time to time, will disclose externally general principles to be derived from arbitration proceedings that can assist parties in future disputes and arbitration proceedings.
The powers of the arbitrator will be within the parameters of the Act or any agreement between the parties, where applicable. In particular, 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.
A Submission for Arbitration under section 169.32 must contain:
- a list of the matters being submitted for arbitration, as set out in subsection 169.32(1);
- a copy of the written notice provided at least 15 days in advance by the shipper of its intention to submit a matter for arbitration; and,
- evidence that an attempt has been made to resolve the matters submitted for arbitration.
Arbitration proposals, information and arbitration 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 unless requested and paid for by the parties.
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 decisions will include confidential written reasons and will be made within 7 days after the close of the arbitration hearing. Unlike final offer arbitration, the arbitrator will not be limited to choosing between one or the other party’s position—the decision may be consistent with the position of either party or may be different from the positions of the parties. Arbitration decisions 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.
Arbitration decisions under section 169.38 must be for a period of one year only, unless the parties agree otherwise, and the arbitrator is required to issue the arbitration decision within 45 days from receipt of a complete Submission for Arbitration. However, if the arbitrator believes that it is not practical to issue the decision within 45 days, this time frame may be extended to a maximum of 65 days by the arbitrator, unless the parties agree to further extend the time frame.
Proposed Rail Arbitration Rules for Arbitrations under Section 169.31 of the Canada Transportation Act
The purpose of these Rules is to achieve a commercially fair and reasonable determination of matters in dispute.
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 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.
In these Rules:
- 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 169.35 of the Act.
- “arbitration decision”
- means the decision of the arbitrator for the purpose of resolving the issues in dispute between the parties, including written reasons.
- means the Canada Transportation Act, S.C. 1996, c. 10, as amended.
- means a calendar day unless otherwise specified.
- includes any information recorded or stored by means of any device, including data and information in an electronic form.
- means a railway company or a shipper.
- mean the Canadian Transportation Agency’s Rail Arbitration Rules for Arbitrations under Section 169.31 of the Canada Transportation Act, as amended by the Agency from time to time.
- The arbitrator will be bound by any applicable written agreement, including confidential contract, between the parties, where the arbitrator finds it relevant.
- These Rules provide the procedures to be applied to arbitrations conducted under section 169.31 of the Act.
- In any arbitration proceeding, the arbitrator may, on request or on his or her own initiative, dispense with or vary any of the provisions of these Rules.
- In any arbitration proceeding, the arbitrator may extend or abridge the time limits set by these Rules, or otherwise set by the arbitrator, either before or after the expiry of the time limits.
- Where information relating to an arbitration proceeding is to be treated as confidential, the Agency, the arbitrator, the parties and the witnesses shall treat all meetings, communications, proceedings, documents disclosed in proceedings, and the arbitration decision as confidential except to the extent that such information is already in the public domain.
- 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.
- Every person who takes part in the arbitration hearing and has access to confidential information will be required to execute a confidentiality undertaking.
- In the calculation of time, the first day shall be excluded and the last day included.
- Where the time limit for the doing of a thing expires or falls on a holiday, the thing must be completed on that day.
6. 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.
7. 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.
- A party that requires translation services to access a document produced by the other party will be responsible to arrange for that translation.
- A party that requires simultaneous interpretation services to participate in an arbitration hearing or to present a witness in another official language than the language of the arbitration must notify the arbitrator of this requirement no less than 7 days before the hearing.
8. 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 hard copy of any document sent by e-mail or facsimile to be delivered by mail where the document cannot be received by the recipient by e-mail or facsimile.
Submission for Arbitration
9. Submission for Arbitration
Arbitration services may be requested by the shipper by filing a submission for arbitration with the Agency and, at the same time, providing a copy to the railway company. A complete submission for arbitration must contain:
- the names and full contact information for all parties to the dispute, including mailing addresses, telephone numbers, fax numbers and e-mail addresses;
- the names and full contact information of legal counsel or other authorized representative of the parties, if any;
- a copy of any applicable written agreement, including confidential contract, relevant to the matters submitted for arbitration;
- a description of all matters and any applicable undertakings, as identified in paragraphs 169.32(1)(a) to (e) of the Act ;
- a copy of the written notice provided by the shipper under paragraph 169.33(1)(a) of the Act; and,
- evidence that the shipper has tried to resolve with the railway company the matters submitted for arbitration.
Applications under subsection 169.43(1) of the Act will be adjudicated by the Agency under section 22 of the Canadian Transportation Agency General Rules 1 on an expedited basis.
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 under paragraphs 169.34(1)(a) to (c) requested for the matters submitted for arbitration.
12. Appointment of arbitrator by the Agency
- With respect to the selection of the arbitrator,
- 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 to be chosen from the Agency’s List of Arbitrators, 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.
- The arbitrator will be appointed by the Chair of the Agency pursuant to section 169.35 of the Act.
13. Independence and impartiality
- An arbitrator shall be and remain wholly independent and impartial.
- An arbitrator shall sign a conflict of interest statement.
- If a party is of the opinion that the arbitrator is not in a position to act impartially or believes a conflict of interest exists, the party must immediately give written notice to the Agency, stating the reason for the opinion.
- The Chair of the Agency must issue a decision on the issue raised in the notice within 2 business days after receiving it. If the Chair determines that the arbitrator cannot continue to act, the Chair will remove the arbitrator.
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 or without the knowledge of the other party.
- If an arbitrator is incapable of acting or if a decision of the Chair under subsection 13(4) determines that the arbitrator cannot continue to act, 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
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
- The arbitrator has the power to establish terms to resolve matters submitted for arbitration by shippers respecting the manner in which the railway company is to fulfill its service obligations under section 113 of the Act and, in doing so, may 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.
- In discharging the mandate under subsection 17(1) above, the arbitrator has the power to:
- interpret and apply the terms of any written agreements, including confidential contracts, between railway companies and shippers or between railway companies and their other partners, including all rates, terms and conditions of service, and associated charges;
- make an interim decision on any matter with respect to which a final decision may be made;
- grant such interim measures of protection as the arbitrator finds appropriate;
- make an interim decision granting injunctive relief, for example, to preserve the status quo pending completion of the arbitration, including cease and desist or specific performance orders;
- encourage and assist the parties to 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;
- subject to the statutory timelines, order an adjournment of the arbitration if required;
- order the inspection of documents, goods or other property, including a view or physical inspection of property;
- extend or abridge a period of time fixed or determined by the arbitrator or set out in these Rules;
- 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;
- request further statements clarifying the issues in dispute;
- determine and give directions with respect to procedural matters, having regard to section 1;
- in exceptional circumstances and if there is no prejudice to either party, direct that all evidence and argument be given in writing and dispense with an oral hearing; and,
- appoint one or more independent external experts to report on specific issues as determined by the arbitrator to be necessary. As per section 31, below, the cost of any such expert(s) shall be shared by the parties on an equal basis.
- 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.
If, during the arbitration, the parties settle the dispute, the arbitrator shall, upon receiving confirmation of the settlement, terminate the arbitration.
19. First pre-arbitration meeting
- Within 4 days of the appointment of the arbitrator, 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:
- encourage settlement of the dispute;
- clarify the issues;
- identify the length of time required for the arbitration hearing, which should not exceed 5 days;
- schedule the arbitration hearing;
- direct the parties to produce an agreed statement of facts;
- determine a timetable for the completion of all pre-arbitration matters, including:
- the exchange of arbitration briefs;
- the exchange of any questions;
- the production of an agreed statement of facts; and,
- the tentative date and time for a second pre-arbitration meeting, should the arbitrator find it appropriate; and,
- identify and determine any other matters relevant to the arbitration.
- Within 3 days of the 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. Information exchange
Information that is exchanged by the parties under subsection 169.34(3) of the
Act should not be filed with the arbitrator at the same time. Any relevant documentary evidence to be relied on by a party in the arbitration must be provided to the arbitrator with the arbitration briefs under section 21 below.
21. Exchange of arbitration briefs
- At least 5 days after the exchange of information provided for in subsection 169.34(3) of the Act, each party must simultaneously deliver to the arbitrator and to the other party a written arbitration brief on a date and at a time to be determined by the arbitrator.
- Each party’s arbitration brief must contain:
- the material facts supporting its position;
- any agreed statement of facts;
- the relevant documentary evidence in support of its position provided that it was exchanged under subsection 169.34(3) of the Act;
- will-say statements from any person intended to give evidence at the arbitration hearing;
- written opinions from any expert intended to give evidence at the arbitration hearing, including:
- the qualifications of the expert;
- the expert’s opinion; and,
- the facts upon which the expert’s opinion is based; and,
- arguments in support of its position, set out in concise numbered paragraphs and including references to the relevant documentary evidence in support of its position exchanged under subsection 169.34(3).
- 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.
22. 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.
23. Second pre-arbitration meeting (optional)
- Following the filing 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:
- further clarify the issues;
- confirm the length of time required for the arbitration hearing;
- identify further evidence that the arbitrator requires to be produced at the arbitration hearing;
- demand an agreed statement of facts, if any, from the parties;
- establish which witnesses will be required to attend the arbitration hearing for cross-examination and establish the dates/times for their attendance; and,
- identify and determine any other matters relevant to the arbitration.
- Within 3 days of the 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.
24. Place of arbitration hearing
- Unless otherwise agreed by the parties, the arbitration hearing shall take place at the head office of the Agency.
- If required, the arbitrator may conduct part or all of the arbitration hearing by electronic communication such as webcasting or video- or tele-conferencing.
- 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.
25. Conduct of the arbitration hearing
- No transcript of the arbitration hearing shall be taken unless requested and paid for by the parties. Where a transcript is taken, a copy will be provided to the arbitrator.
- The record of the arbitration hearing shall consist of the documents exchanged by the parties under subsection 169.34(3) and exhibits produced and filed by the parties, including any witness statements and expert opinions.
- The order of the proceeding shall be established by the arbitrator in consultation with the parties and shall include final oral argument.
- Subject to the requirement contained in subsection 169.34(3), the parties may offer such evidence as is relevant and material to the dispute and shall produce such evidence under oath or affirmation as the arbitrator may find necessary. The arbitrator may not require strict conformity to legal rules of evidence.
- 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.
- 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 that witness shall be subject to cross-examination and re-examination only.
- The arbitrator may, on agreement of the other parties, determine that a witness need not be present at the arbitration hearing for cross examination.
28. 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.
29. Closure of arbitration hearing
- Where the parties have, on inquiry and following final oral argument, 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 decision.
- 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.
30. Arbitration decision
- The arbitrator shall make the arbitration decision within 7 days after the arbitration hearing has closed.
- The arbitrator may make an arbitration decision that is consistent with the position of any of the parties or may choose to make an arbitration decision that is different from the positions of the parties.
- The arbitrator shall provide each party with an originally signed copy of any arbitration decision.
- The arbitrator shall provide written reasons for the arbitration decision.
- Each party shall bear its own costs, including all travel and accommodation expenses for its own experts. Each party shall also be responsible for one-half of the cost of any expert appointed under paragraph 17(2)(m), and one-half of all common expenses, including 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 headquarters.
- In addition to (1) above, where the arbitrator appointed is a commercial arbitrator, each party shall be responsible for one-half of the arbitrator’s fee.
32. Corrections to a decision
- On own motion or on application of a party, the arbitrator may amend or vary an arbitration decision to correct:
- a clerical or typographical error;
- an accidental error, slip, omission or other similar mistake; or
- an arithmetical error made in a computation.
- An application by a party to correct an arbitration decision shall be made within 2 days after that party has received the arbitration decision and any correction shall not, without the consent of the parties, be made more than 5 days after the parties have received the arbitration decision.
- A corrected arbitration decision shall be provided to the parties by the arbitrator and shall constitute the final and binding arbitration decision.