Pilotes du Saint-Laurent Central Inc. v. Laurentian Pilotage Authority, docket T-1032-00

                                                                                                                                             Date: 20001120

                                                                                                                                        Docket: T-1032-00

MONTRÉAL, QUEBEC, NOVEMBER 20, 2000

Before:            RICHARD MORNEAU, PROTHONOTARY

Between:

                                     PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                                                                                                       Applicant

                                                                              AND

                                             LAURENTIAN PILOTAGE AUTHORITY

                                                                                                                                                   Respondent

Between:

                                             LAURENTIAN PILOTAGE AUTHORITY

                                                                                                                                                       Applicant

                                                                              AND

                 CORPORATION DES PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                                                                                                   Respondent

                                                                              AND

                                                              JEAN-YVES DURAND

                                                                                                                                               Mis-en-cause

                                                                            ORDER

THE COURT:

-            allows the motion by the Corporation des pilotes du Saint-Laurent Central Inc. to homologate an arbitral award ;

-            dismisses the motion by the Laurentian Pilotage Authority to quash an arbitral award;

-            the whole with one set of costs awarded to the Corporation des pilotes du Saint-Laurent Central Inc. for both motions.

Richard Morneau                          

Prothonotary

Certified true translation

Suzanne M. Gauthier, LL.L. Trad. a.

                                                                                                                                              Date: 20001120

                                                                                                                                         Docket: T-1032-00

Between:

                                      PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                                                                                                        Applicant

                                                                              AND

                                              LAURENTIAN PILOTAGE AUTHORITY

                                                                                                                                                    Respondent

Between:

                                              LAURENTIAN PILOTAGE AUTHORITY

                                                                                                                                                        Applicant

                                                                              AND

                 CORPORATION DES PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                                                                                                    Respondent

                                                                              AND

                                                               JEAN-YVES DURAND

                                                                                                                                               Mis-en-cause

                                                             REASONS FOR ORDER

RICHARD MORNEAU, PROTHONOTARY

Introduction

[1]         The Court has before it a motion by the Corporation des Pilotes du Saint-Laurent Central Inc. ("the Corporation") pursuant to art. 946.1 of the Code of Civil Procedure ("C.C.P.") to homologate an arbitral award ("the award") made on April 17, 2000 by the arbitrator appointed by the parties to resolve the dispute. In opposition to this motion, the Laurentian Pilotage Authority ("the L.P.A.") filed a motion to quash the award.

Parties

[2]         The L.P.A. is a federal government organization created by the Pilotage Act, R.S.C. 1985, c. P-14 ("the Act"), the purpose of which according to s. 18 of that Act is to establish, operate, maintain and administer an efficient pilotage service on the St-Lawrence River in the interests of safety.

[3]         The Corporation is a body corporate at private law consisting of and acting on behalf of the pilots of ships operating on the St-Laurence River between Québec and Montréal.

[4]         The pilotage service managed by the L.P.A. involves the compulsory assignment of the control of ships operating in certain areas of the St. Lawrence River to pilots whose knowledge of the river is well established, so as to ensure navigational safety.

Legal and factual background

[5]         The relevant provisions of the Act, namely ss. 3(1), 15(1) and (2), 18 and 20(1)(l), read as follows:

3. (1) Each Pilotage Authority named in the schedule is hereby established as a body corporate consisting of a Chairman and not more than six other members.

15. (1) Subject to subsection (2), an Authority may employ such officers and employees, including licensed pilots and apprentice pilots, as are necessary for the proper conduct of the work of the Authority.

(2) Where a majority of licensed pilots within the region, or any part thereof, set out in respect of an Authority in the schedule who form or are members or shareholders of a body corporate elect not to become employees of the Authority, the Authority may contract with that body corporate for the services of licensed pilots and the training of apprentice pilots in the region or part thereof where the contract is to be effective, and the Authority shall not employ pilots or apprentice pilots in the region or that part thereof where such a contract is in effect.

18. The objects of an Authority are to establish, operate, maintain and administer in the interests of safety an efficient pilotage service within the region set out in respect of the Authority in the schedule.

20. (1) An Authority may, with the approval of the Governor in Council, make regulations necessary for the attainment of its objects, including, without restricting the generality of the foregoing, regulations

                                                                         . . . . .

(l)      prescribing the minimum number of licensed pilots or holders of pilotage certificates that shall be on board ship at any time . . .

[6]     The L.P.A. exercised its regulatory authority contemplated by s. 20(1)(l) of the Act by proceeding to adopt s. 35 of the Laurentian Pilotage Authority Regulations, C.R.C. c. 1268, which reads as follows:

35. (1) The minimum number of licensed pilots or holders of pilotage certificates that shall be on board a ship at any time is one, except that a minimum of two licensed pilots or holders of pilotage certificates shall be on board

(a)     where the ship is to be piloted in that part of District No. 1 between Montreal and Trois-Rivières or between Trois-Rivières and Quebec and is likely to be under way for more than 11 consecutive hours in that part of that district;

(b)     where the ship is to be piloted in District No. 2 and is likely to be under way for more than 11 consecutive hours in that district;

(c)     where a ship in excess of 63,999 tons deadweight is to be piloted in District No. 1;

(d)     where a ship in excess of 74,999 tons deadweight is to be piloted in District No. 2; or

(e)     where the ship is to be piloted in District No. 1 or District No. 2 and is

(i) a tanker of 40,000 tons deadweight or more, or

(ii) a passenger ship of more than 100 m in length;

(f)      in District No. 1 and in District No. 2 during the winter navigation period; or

(g)     where, owing to the conditions or nature of the voyage, more than one person is required to perform pilotage duties on the ship.

(2) For the purposes of paragraph (1)(f), the Authority shall determine the winter navigation period in each pilotage district, in the interests of the safety of navigation, in consultation with the Canadian Coast Guard, pilots who are members of a body corporate as described in subsection 15(2) of the Act, and interested groups of shipowners, on the basis of

(a) the status of navigational aids;

(b) weather;

(c) ice formation and ice conditions; and

(d) any other pertinent factors.

(3) The Authority shall, as soon as practicable after determining the winter navigation period in accordance with subsection (2), inform all affected parties of the determination.

Contract

[7]     A service contract ("the contract") was concluded between the parties pursuant to s. 15(2) of the Act.

[8]     That contract provided inter alia in clauses 3.01 and 3.02 that the L.P.A. recognized the Corporation as the principal agency for making recommendations on pilotage matters and on navigational safety. The parties acknowledged that pilotage is a fundamental means of ensuring navigational safety and that the services rendered by the Corporation are essential to carrying out objects of the L.P.A.

[9]     The contract included in clause 19 a compulsory arbitration clause enabling the parties to settle disagreements that might arise in the course of their contractual relationship without reference to courts of law.

[10] Clauses 19.01, 19.03, 19.09 and 19.10 provide inter alia that the arbitrator has exclusive jurisdiction to interpret and apply the contract. To do this, the parties gave him all the powers necessary to exercise his jurisdiction. He could also settle any question relating to compliance with the agreed conditions. Similarly, it was provided that the arbitrator's decision was executory and not subject to appeal.

[11] Clause 7.03(a) of the contract provided that two pilots would be assigned to a pilotage mission when navigational safety required this.

[12] These clauses of the contract read as follows:

[TRANSLATION]

3.01      The AUTHORITY [that is, the L.P.A.] recognizes the CORPORATION for all legal purposes as the sole representative of the pilots and apprentice pilots in District No. 1, individually or collectively, and as the principal organization for making recommendations to the AUTHORITY on pilotage matters in the compulsory pilotage zone or giving technical and professional advice on the exercise of the profession of pilot and on navigational safety in that district.

The CORPORATION recognizes the AUTHORITY for all legal purposes as the authority on pilotage matters.

3.02      The PARTIES acknowledge that:

(1)     pilotage is the fundamental means of ensuring navigational safety and the effective movement of ships and that it contributes to protection of the environment;

(2)     pilotage requires extensive and specialized training in the control of ships and navigation in confined waters, as well as extensive local knowledge of the district, including tides, currents, micro-climates, the general topography of the area visually or on radar, the depth of water, mooring places and navigational aids;

(3)     the participation of the CORPORATION and its members is essential to the pursuit and realization of the objects of the AUTHORITY.

7.03      Only one pilot at a time shall be assigned to a pilotage mission, except in the following cases, in which two pilots shall be assigned:

(a)     when navigational safety requires . . .

19.01    Any dispute or disagreement between the AUTHORITY on the one hand and the CORPORATION or any of its members on the other, or vice versa, resulting from the interpretation or implementation of this contract, shall be referred to a committee for adjudication within 120 days of the incident giving rise to the said dispute or disagreement or of such time as the party referring the dispute or disagreement to arbitration learns of the facts. However, in the event that the dispute or disagreement concerns billing - article 6.03 - the aforementioned deadline shall be 30 days from receipt of the AUTHORITY's reply following a claim by the CORPORATION. A claim by the CORPORATION on a billing matter shall be submitted to the AUTHORITY within 90 days of receipt of the billing diskette from the AUTHORITY. Any reference to the committee shall be by the sending of a written notice from the CORPORATION or any of its members with the CORPORATION's agreement, or a written notice by the AUTHORITY, as the case may be. Such written notice shall be sent to the other party.

19.03    Any dispute or disagreement which the committee referred to in the preceding paragraph has not settled within the deadline mentioned in article 19.02 may be referred by either of the PARTIES for decision to an arbitrator selected at random from a panel of four arbitrators, namely Angers Larouche, Paule Gauthier, Marcel Morin and Jean-Yves Durand.

19.09    The arbitrator may not amend, modify or add to the provisions of this contract. However, the arbitrator has all powers necessary for the exercise of his or her jurisdiction, including the power to issue subpoenas. In particular, he or she may order the payment of compensation in the following cases:

(1)     for damage, injury and loss sustained as the result of any event giving rise to reference to the reporting and renegotiation procedures mentioned in article 12;

(2)     when it has been established to his or her satisfaction that an act or omission by one PARTY caused injury to the other or to one of its members, or altered the conditions on which the other PARTY agreed to provide one or more services covered by this contract.

It is agreed that the remedies of the PARTIES mentioned in the contract are cumulative and not exclusive.

19.10    The arbitrator shall attempt to render his final decision within 30 days of the end of the hearing of the dispute, unless the PARTIES agree in writing on another deadline. The decision shall be executory and not subject to appeal like a judgment rendered by a competent court, subject to the formalities laid down by law.

[13] The disagreement or dispute between the parties occurred as follows. The disagreement was submitted to arbitration as a result of the arrival in the district in question of three new ships as of August 1998. These ships had dimensions and features which, according to the Corporation, for reasons of navigational safety justified the presence of two pilots on board, in accordance with clause 7.03(a) of the contract. On assessment, the L.P.A. was of the opinion that only one pilot should be assigned to these ships. As a consequence of this difference of opinion between the parties, the situation was submitted to arbitration pursuant to clause 19 of the contract.

[14] Following an arbitration that lasted for four days, the arbitrator concluded that navigational safety required the presence of a second pilot on the three ships in accordance with clause 7.03(a) of the contract.

[15] The arbitrator considered that the Corporation's request was consistent with navigational safety and that the latter was at risk if there was not a second pilot on board. He accordingly allowed the dispute submitted by the Corporation and reserved jurisdiction on the quantum relating to the presence of a second pilot on the ship.

[16] To be executory, an arbitral award must be homologated pursuant to art. 946 C.C.P. The relevant provisions of the C.C.P. read as follows:

943. The arbitrators may decide the matter of their own competence.

943.1 If the arbitrators declare themselves competent during the arbitration proceedings, a party may within 30 days of being notified thereof apply to the court for a decision on that matter.

While such a case is pending, the arbitrators may pursue the arbitration proceedings and make their award.

946. An arbitration award cannot be put into compulsory execution until it has been homologated.

946.1 A party may, by motion, apply to the court for homologation of the arbitration award.

946.2 The court examining a motion for homologation cannot enquire into the merits of the dispute.

946.3 The court may postpone its decision on the homologation if an application has been made to the arbitrators by virtue of article 945.6.

If the court acts pursuant to the first paragraph, it may, on the application of the party applying for homologation, order the other party to provide security.

946.4 The court cannot refuse homologation except on proof that

(1)one of the parties was not qualified to enter into the arbitration agreement;

(2) the arbitration agreement is invalid under the law elected by the parties or, failing any indication in that regard, under the laws of Québec;

(3) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings or was otherwise unable to present his case;

(4) the award deals with a dispute not contemplated by or not falling within the terms of the arbitration agreement, or it contains decisions on matters beyond the scope of the agreement; or

(5) the mode of appointment of arbitrators or the applicable arbitration procedure was not observed.

In the case of subparagraph 4 of the first paragraph, the only provision not homologated is the irregular provision described in that paragraph, if it can be dissociated from the rest.

946.5 The court cannot refuse homologation of its own motion unless it finds that the matter in dispute cannot be settled by arbitration in Québec or that the award is contrary to public order.

946.6 The arbitration award as homologated is executory as a judgment of the court.

947. The only possible recourse against an arbitration award is an application for its annulment.

947.1 Annulment is obtained by motion to the court or by opposition to a motion for homologation.

947.2 Articles 946.2 to 946.5, adapted as required, apply to an application for annulment of an arbitration award.

Analysis

[17] Although counsel for the parties appeared to agree in concluding that ultimately the parameters to be observed by this Court are the same (see to this effect Navigation Sonamar Inc. v. Algoma Steamships Limited, [1987] R.J.Q. 1346 (S.C.)), it appears to this Court that it must weigh the homologation or the quashing of the award pursuant to the provisions of the C.C.P., not pursuant to s. 34 of the Commercial Arbitration Code which is an appendix to the Commercial Arbitration Act, R.S.C. 1985, c. C-34.6.

[18] Before the arbitrator, it appeared that the parties had to refer to the C.C.P. on the filing of an expert opinion. Further, the two parties in the case at bar approached the Court pursuant to the C.C.P. They proceeded by motion and not by application (as would be necessary under Rule 324 of the Federal Court Rules (1998) if the Arbitration Code was seen as applicable). The L.P.A. therefore cannot expect that the Arbitration Code should apply in the circumstances.

[19] Before reviewing the parameters within which the L.P.A. objection is made, the content of that objection must first be briefly stated.

[20] As the Court understands the matter, the L.P.A. is arguing that under the terms of the Act and s. 35(1)(g) of the Regulations determining the number of pilots on a ship falls within its exclusive discretionary authority which is a matter of public order. Consequently, the contract - and in particular its clauses 7.03(a) and 19 - must be read and construed as excluding any dispute relating to the number of pilots on a ship. If such a construction cannot be accepted and thus a dispute is covered by the arbitration clause, then the latter is invalid.

[21] It would appear that the objective guidelines applicable to our review of the motions in question may be grouped as follows.

[22] First, it seems that the burden of proof rests with the party seeking to object to homologation and that the latter will only be refused if one aspect of arts. 946.4 or 946.5 C.C.P. is clearly established. As the Superior Court indicated in Entreprises Apac Inc. v. Université Bishop's, J.E. 98-740 (S.C.), at p. 5:

[TRANSLATION]

Homologation is not an appeal procedure and it is clear that the court's powers of intervention are limited.

When the court has before it a motion to homologate and/or quash an arbitral award, it cannot examine the merits of the dispute.

Further, it may only quash such an award in whole or in part for the reasons stated in the aforesaid arts. 946.4 and 946.5 C.C.P.

Consequently, if the party applying to quash does not establish one of those reasons or show some serious departure from a rule of natural justice, the award must be homologated.

[23] The writer Donald Béchard, in "Homologation et annulation de la sentence arbitrale", Développements récents en arbitrage civil et commercial (1997), vol. 94, Cowansville, Les éditions Yvon Blais, at pp. 122 and 125, says the following:

[TRANSLATION]

1.4        Burden of proof

Who has the burden of proof in a homologation matter? The answer to this question is provided by the beginning of art. 946.4 C.C.P., which reads as follows:

The court cannot refuse homologation except on proof that . . . [Emphasis added.]

The burden is thus on the party seeking to prevent homologation. Further, the second paragraph of art. 2803 C.C.Q. (the old art. 1203 C.C.L.C. was essentially to the same effect) may serve as support to this statement:

                                                                         . . . . .

A person who alleges the nullity, modification or extinction of a right shall prove the facts on which he bases his allegation.

Finally, Prof. Marquis is of the view that a presumption of validity applies to an arbitral award:

. . . a presumption of validity applies to the award. It is thus up to the party alleging a ground of nullity to present evidence of this within the parameters laid down by the Code of Civil Procedure.

(References omitted)

1.6.2     Reasons in art. 946.4 C.C.P. are restrictive and must be given a limiting interpretation

The reasons in art. 946.4 C.C.P. are restrictive and must be given a limiting interpretation, as appears inter alia from the following judgments:

(Case references omitted)

[24] Secondly, this Court cannot review anything relating to the merits of the dispute, including the interpretation of a statute, a regulation or the contract on which the dispute before the arbitrator was based in whole or in part (see Fortin v. Centre communautaire juridique du Nord-Ouest, [1984] C.A. 662, at 666).

[25] Third, the arbitration agreement must be given a broad and liberal interpretation. As indicated in CJMF-FM Ltée v. Paré, D.T.E. 92T-6 (S.C.), at pp. 15 et seq.:

[TRANSLATION]

As John E.C. Brierly writes, "the key concept in arbitration is to rely on the will of the parties. It is their agreement which forms the background to the arbitration, sets out the limits of the arbitrator's authority on the matter submitted to them and indicates how the arbitrators are to proceed".

It is apparent that since the 1986 legislation on arbitration the legislature has clearly and unequivocally indicated that it intends to create and to legitimize a dispute settlement system separate from the "ordinary" courts.

The legislature has said that any dispute may be submitted to arbitration except one concerning status and capacity, family order and public order (1926.2).

As Mr. Brierly writes, "The Quebec legislature has taken care in its new legislation to convey the message that arbitration is no longer to be regarded as an exceptional institution and thus subject in principle to a limiting interpretation".

Accordingly, an arbitration agreement is subject to broad interpretation and is so distinct that nullity of the contract does not necessarily mean nullity of the arbitration agreement (1626.5).

(References omitted)

and at p. 21:

[TRANSLATION]

In light of the present legislation on arbitration by agreement and the Court's powers to rule on the arbitrator's jurisdiction, in my opinion even in cases of doubt the agreement of the parties must be given "breathing room" and allowed to take effect, to use the helpful expression of Viau J.

[26] Fourthly, the fact that the outcome of the dispute, as issued by the arbitrator, has an impact on third parties is not a factor that can be used to prevent giving effect to the arbitration agreement.

[27] In this connection, in Guns N'Roses Missouri Storm Inc. v. Productions musicales Donald K. Donald Inc., [1994] R.J.Q. 1183 (C.A.), at 1186, the Court said the following:

On the second question, I do not see why an arbitration clause agreed upon by two parties should necessarily become inapplicable merely because the dispute also involves a third party or third parties. In the Mont Saint-Sauveur case (supra), for example, the arbitration clause had formed part of a contract between a builder and an owner contemplating the construction of a condominium project. The owner then sued the builder and the architect. The presence in the dispute of the third party architect was held not to prevent the application of the arbitration clause which the builder and the owner had agreed upon.

I do not believe that the presence of a third party in the dispute, or even the fact that a third party has initiated proceedings, should, in itself, render the arbitration clause inapplicable and deprive the parties of a forum for the settlement of their disputes which they have chosen in their contract. It is not difficult to imagine any number of commercial disputes where it would be entirely appropriate to proceed to arbitration under the arbitration clause agreed upon between two parties notwithstanding a claim against one of the parties by a third party.

[28] In a situation very similar to our own, the Superior Court made the following observations at pp. 13 and 14 of Corporation des pilotes du Bas Saint-Laurent v. Administration de pilotage des Laurentides, No. C.S.Q. 200-05-012157-991, November 9, 1999, per J. Roger Banford J.S.C.:

[TRANSLATION]

The legal argument based on public order does not appear any more persuasive. The Authority maintained that the arbitral award had the effect of enabling the Corporation to unilaterally impose operating costs on third parties, the shipowners, contrary to the provisions of the law, in particular s. 35 of the Regulations, which would be contrary to public order.

Nevertheless, the decision is only designed to resolve a dispute between two parties to a contract. It does not in any way alter the date given by the Authority for the end of the winter navigation period in 1998 or in the future. It has no retroactive effect. It does not in any way alter the provisions of the Act or limit the powers of the Authority under s. 35 of the Regulations. It only recognizes a failure to correctly perform a contractual obligation.

Further, under the terms of the agreement, it is the Authority alone which has the duty of paying for the pilots' services. If the bill could be passed on to the shipowners, this might result from the regulations in effect or the agreements binding on the parties. The disputed award does not in any way affect these rules.

The arbitrator's decision does not vary the Pilotage Regulations either. It only concludes that the Authority did not comply with them in a particular situation. If third parties suffer consequences as a result of the award, this cannot be due to the award itself but is the consequence of the legislation, regulations or agreements affecting these third parties and the Authority. If the third parties, such as the shipowners, are adversely affected by the decision, they should not make their objections to the Authority but to the perpetrator of the illegally committed act.

[29] On the L.P.A.'s grounds of objection as such, unless it can be said for purposes of art. 946.5 C.C.P. that the dispute between the parties involves a discretionary power of a public nature reserved exclusively to the L.P.A., the following statements made by the arbitrator in question in his analysis apply in this Court and dispose of the motions in question to homologate the arbitral award.

[30] On the overlapping of the relevant clauses of the contract (clauses 7.03(a) and 19) regarding the parties' power to contract and the function of the L.P.A., the arbitrator said the following, at p. 52:

[TRANSLATION]

Further, it appears that any dispute resulting from the interpretation and application of this contract must be referred to a review committee. This dispute is referred for adjudication within the meaning of 19.01. An arbitration procedure is thus provided to settle disputes and disagreements concerning interpretation or application under this contract. Moreover, this may be done pursuant to clause 19.09(2).

The instant dispute concerns the navigational safety of the three ships. The Corporation is asking that two pilots be assigned to navigation of these ships and that this be done throughout the year. Double pilotage is provided for in the winter. There is a disagreement between the parties on this point. Such a dispute falls within the scope of the Act, and in particular s. 18 of the Act, since the key aspect of the Authority's function is to operate an efficient pilotage service in the interests of safety.

at p. 55:

[TRANSLATION]

As we saw earlier, the Authority has the power to enter into a contract for services with a corporation of pilots. This was done. Negotiations are provided for. A contract was concluded between the Corporation and the Authority. Paragraph (a) of clause 7.03(a) provides for an exception to the assignment of only one pilot per ship. The parties agreed that when navigational safety requires it, two pilots will be assigned.

I see no reason to invalidate such a clause. It is consistent with the purpose of the Pilotage Act, in s. 15, and the objects of that Act. The parties have incorporated these points in their contract.

and at p. 59:

[TRANSLATION]

However, the service contract clearly provides that two pilots will be assigned when navigational safety requires it. I refer to clause 7.03(a). That clause is the subject of a contract, but it really only confirms the object of the Pilotage Act. What must be considered is navigational safety. Moreover, clause 7.03(a) does not merely state a desire, but imposes a duty. The word "requires" denotes an obligation or necessity.

I therefore consider that I have jurisdiction to determine whether navigational safety requires double pilotage for the three ships in question.

[31] On the L.P.A.'s exclusive power over the assignment of pilots to ships, it seems to the Court that this exclusive discretionary power is limited to determining the minimum number of pilots that shall be on board a ship and it is not in any way contrary to the law or to public order for the L.P.A. to undertake by contract to provide more than the minimum number of pilots when navigational safety requires it.

[32] As we saw earlier in para. [5] in fine, it is s. 20(1)(l) of the Act which primarily covers this exclusive power, as follows:

20. (1) An Authority may, with the approval of the Governor in Council, make regulations necessary for the attainment of its objects, including, without restricting the generality of the foregoing, regulations

                                                                         . . . . .

(l)      prescribing the minimum number of licensed pilots or holders of pilotage certificates that shall be on board ship at any time . . .

(My emphasis)

[33] The L.P.A. exercised this power by adopting s. 35 of the Regulations, the relevant portion of which reads as follows :

35. (1) The minimum number of licensed pilots or holders of pilotage certificates that shall be on board a ship at any time is one, except that a minimum of two licensed pilots or holders of pilotage certificates shall be on board

(a)     where the ship is to be piloted in that part of District No. 1 between Montreal and Trois-Rivières or between Trois-Rivières and Quebec and is likely to be under way for more than 11 consecutive hours in that part of that district;

(b)     where the ship is to be piloted in District No. 2 and is likely to be under way for more than 11 consecutive hours in that district;

(c)     where a ship in excess of 63,999 tons deadweight is to be piloted in District No. 1;

(d)     where a ship in excess of 74,999 tons deadweight is to be piloted in District No. 2; or

(e)     where the ship is to be piloted in District No. 1 or District No. 2 and is

(i) a tanker of 40,000 tons deadweight or more, or

(ii) a passenger ship of more than 100 m in length;

(f)      in District No. 1 and in District No. 2 during the winter navigation period; or

(g)     where, owing to the conditions or nature of the voyage, more than one person is required to perform pilotage duties on the ship.

[34] Accordingly, the L.P.A. sought to exercise its power of determining the minimum number of pilots by regulation.

[35] However, I do not see in what way it is contrary to any provision of the Act or Regulations, and hence to public order, for the parties at issue, and thus of course the L.P.A., to undertake by contract that there may be two pilots when navigational safety requires it. The L.P.A. can certainly undertake more than it must do by regulation. If the L.P.A. did not want to undertake more than the minimum, it should not have entered into the contract.

[36] Additionally, for the reasons stated in detail in paras. [26] to [28], the financial impact which the arbitrator's decision may have on shipowners or other third parties is not a relevant factor to be considered for the purposes of this analysis.

[37] The possible impact on the shipowners also does not contravene the objects of the L.P.A.

[38] Further, by the arbitration clause which provides that any disagreement resulting from the interpretation or application of the contract will be subject to arbitration - a scope which certainly includes the situation under clause 7.03(a) - this is not in any way a delegation of the L.P.A.'s authority to the arbitrator. The arbitrator in question did not intend (at p. 56 of his decision) a delegation of the L.P.A.'s authority to the Corporation any more than we should regard the implementation of clauses 7.03(a) and 19 of the contract as an application of this administrative law concept. The situation is that the L.P.A. gave an undertaking and the two parties referred the settlement of any disagreement in this regard to arbitration: nothing more.

[39] Consequently, we cannot in any way accept the L.P.A.'s contentions that, even if the standard of review is that of simple error,

-      the L.P.A. was not qualified to delegate its powers or to undertake clauses 7.03(a) and 19 of the contract (art. 946.4(1) C.C.P.);

-      the contract is invalid (946.4(2) C.C.P.);

-      the award deals with a dispute not contemplated by the contract (946.4(4) C.C.P.); or

-      that the award is contrary to public order (946.5 C.C.P.).

[40] Additionally, I also cannot consider that the Corporation's application to homologate is premature. The payment of compensation is an incidental matter which is still to be resolved and does not prevent the homologation from being rendered.

[41] For the foregoing reasons, the Court must:

-        allow the motion to homologate an arbitral award by the Corporation;

-        dismiss the motion to quash an arbitral award by the L.P.A.;

with costs to the Corporation on both motions.

Richard Morneau                          

Prothonotary

MONTRÉAL, QUEBEC

November 20, 2000

Certified true translation

Suzanne M. Gauthier, LL.L. Trad. a.

Federal Court of Canada

Trial Division

                                                                           Date: 20001120

                                                                      Docket: T-1032-00

Between:

PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                                      Applicant

AND

LAURENTIAN PILOTAGE AUTHORITY

                                                                                  Respondent

Between:

LAURENTIAN PILOTAGE AUTHORITY

                                                                                      Applicant

AND

CORPORATION DES PILOTES DU

SAINT-LAURENT CENTRAL INC.

                                                                                  Respondent

AND

JEAN-YVES DURAND

                                                                              Mis-en-cause

                          REASONS FOR ORDER

                                                         FEDERAL COURT OF CANADA

                                      NAMES OF COUNSEL AND SOLICITOR OF RECORD

COURT FILE No.:

STYLE OF CAUSE:

T-1032-00

PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                            Applicant

AND

LAURENTIAN PILOTAGE AUTHORITY

                                                                         Respondent

LAURENTIAN PILOTAGE AUTHORITY

                                                                            Applicant

AND

CORPORATION DES PILOTES DU SAINT-LAURENT CENTRAL INC.

                                                                         Respondent

AND

JEAN-YVES DURAND

                                                                      Mis-en-cause

PLACE OF HEARING:Montréal, Quebec

DATE OF HEARING:October 25, 2000

REASONS FOR ORDER BY:                               RICHARD MORNEAU, PROTHONOTARY

DATE OF REASONS FOR ORDER:November 20, 2000

APPEARANCES:

SOLICITORS OF RECORD: