Summary

I. Introduction

[1] This is an application for an order appointing an arbitrator pursuant to the dispute resolution clause (Arbitration Clause) in a political risk insurance policy (Policy).

[2] Export Development Canada (EDC) is a federal Crown corporation. Suncor Energy Inc (Suncor) is a Canadian corporation incorporated under the Canada Business Corporations Act, RSC 1985, c C-44 [CBCA].

[3] EDC, as insurer, issued the Policy in 2006 to Suncor's predecessor, Petro-Canada. The Policy insures against certain losses caused by expropriation or political violence, as those terms are defined in the Policy, in respect of oil assets in a number of countries outside Canada. Suncor merged with Petro-Canada in 2009 and became insured under the Policy.

[4] Suncor Energy Oil (North Africa) GmbH, Suncor Energy En Naga Limited, Suncor Energy Libya Exploration BV, and Suncor Energy Ventures (North Africa) Limited are subsidiaries of Suncor (collectively, Subsidiaries).

[5] In 2015, as a result of political unrest that affected oil operations in Libya, Suncor claimed indemnity under the Policy for losses related to Libyan oil assets. A first arbitration determined the value of Suncor's claimed losses, awarding Suncor over $300 million (First Arbitration). With interest, EDC paid $347 million and now seeks to arbitrate a dispute over its rights to recover payment (Second Arbitration). According to EDC's May 15, 2022 notice of arbitration, the Libyan assets continue to have significant value and generate revenue for Suncor and its Subsidiaries. EDC seeks to recover the amounts realized in connection with the assets until the $347 million has been repaid in full, based on two main grounds: (a) its various rights and recourses under the Policy (Recovery Rights); and (b) the oppression provisions under the CBCA.

[6] EDC and Suncor engaged in negotiations to constitute the arbitral panel for the Second Arbitration. Having reached an impasse, EDC commenced this application in accordance with the Arbitration Clause.

[7] EDC and Suncor agree that this Court has jurisdiction to act as the appointing authority. They ask the Court to determine the criteria that should be considered in appointing a sole arbitrator for the Second Arbitration, and to decide who the arbitrator will be. EDC asks the Court to appoint one of eight arbitrators it has proposed. While Suncor proposed four arbitrators, it contends two are best suited to the task and asks the Court to appoint one of them.

[8] Although EDC named the Subsidiaries as respondents in the notice of arbitration, the Subsidiaries submit they did not agree to arbitrate disputes with EDC and this Court has no jurisdiction to appoint an arbitrator in a manner that binds them. The Subsidiaries ask the Court to remove them as respondents to this application, or alternatively, to restrict the scope of the order to one that appoints an arbitrator solely as between Suncor and EDC.

[9] The Subsidiaries take no position with respect to the appointment of an arbitrator as between Suncor and EDC, or the suitability of any of the candidates.

[10] There are five issues on this application:

Preliminary Issue 1: Does this Court have jurisdiction to appoint a sole arbitrator for the Second Arbitration?

Preliminary Issue 2: Should the Subsidiaries be removed as parties to this application, or alternatively, should the Court restrict the scope of the order?

Preliminary Issue 3: Are there issues with EDC’s evidence?

Main Issue 1: What are the appropriate criteria for selecting a sole arbitrator for the Second Arbitration?

Main Issue 2: Who should be appointed as sole arbitrator for the Second Arbitration?

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