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Consumer - Energy Consumer Protection Act, 2010. All Communications Network of Canada v. Planet Energy Corp.
In All Communications Network of Canada v. Planet Energy Corp. (Ont CA, 2023) the Court of Appeal considered the 'public policy' defence, a principle of international arbitration law [and of the: 'UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”)'] that allows a 'public policy' challenge to an arbitrated contract:[12] Planet brought an application to the Superior Court to set aside the arbitral award on the basis that, among other things, the arbitrator deprived Planet of the opportunity to present its case, and the award to ACN was contrary to public policy because it violated the Energy Consumer Protection Act, 2010, S.O. 2010, c. 8 (“ECPA”). ACN brought a separate application for an order recognizing and enforcing the award.
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3. The Arbitrator’s Approach to the ECPA Issue
[66] Planet argued before the arbitrator that ordering it to make commission payments to ACN is illegal under the ECPA and would expose Planet to penalties.
[67] Planet claimed that the amendment to the ECPA on January 1, 2017 (at s. 9.3, along with Regulation O. Reg. 389/10) provides that the remuneration to salespersons selling electricity or gas to consumers must not include any remuneration based on a commission or the value or volume of sales. Planet also relied on a memorandum from staff of the OEB (the “OEB Memorandum”) which expressed the view that “a salesperson may not be remunerated for any new, renewed or extended contract based on a commission…including the renewal/extension of contracts entered on or before January 1, 2017.”
[68] Planet argued that according to the plain language of the Agreement, ACN was only entitled to commissions on sales to ACN’s customers with the amount of such commissions to be calculated based on these customers’ usage across all products. In short, payment of the arbitral award would put Planet in breach of the ECPA. Planet submitted that the arbitrator “rewrote” the terms by ordering Planet to pay over $19 million of commissions to ACN after improperly relying on extrinsic evidence of ACN’s witness who was involved in the negotiation of the Agreement.
[69] ACN claimed that its entitlement to commissions arose from the acquisition of the customer, not the marketing and signing of new customer contracts and that, as such, there was no breach of the ECPA.
[70] The arbitrator considered the relevant provisions of the ECPA, along with submissions of both parties and concluded that the ECPA does not preclude payment of commissions for renewals that became effective on/after January 1, 2017. She also considered that the Agreement provides that customer contact rests exclusively with Planet, and that the OEB Memorandum was written on the understanding that ACN would be doing the retail sales for Planet and did not consider that Planet could directly contact its customers.
[71] In so doing, the arbitrator addressed the language of the statute and regulation, the submissions of the parties, the OEB Memorandum, and the fact that the statute is consumer protection legislation. She disagreed with the Planet’s interpretation of the Agreement in light of her factual findings to which deference is owed. She found that the Agreement was clear and unambiguous on gross margin payments and the negotiation history of the Agreement showed “a consistent and uniform course of conduct with respect to ACN’s entitlement to commissions from renewals.” The arbitrator concluded that for any customer referred by ACN to Planet through their online portal, ACN was entitled to continue receiving commissions for as long as that customer remained with Planet, regardless of the means by which the relationship with Planet was renewed.
[72] The application judge noted that the public policy defence should be invoked “only if the judgment involves an act that is illegal in the forum or if the action involves acts repugnant to the orderly functioning of the social or commercial life of the forum”: Depo Traffic v. Vikeda International, 2015 ONSC 999, at para. 47. The public policy defence is a high standard, and the onus is on the claimant to demonstrate that such enforcement “offends our local principles of justice and fairness in a fundamental way”: Consolidated Contractors, at para. 99, citing Schreter v. Gasmac Inc. (1992), 1992 CanLII 7671 (ON SC), 7 O.R. (3d) 608 (Sup. Ct., at p. 623).
[73] The application judge correctly observed that the arbitrator addressed the issues raised by Planet in relation to the claim for unpaid commissions and directed her mind to the arguments raised by experts and the weight to be given to their evidence. He also correctly held that the arbitrator did not disregard the ECPA; rather, she considered the statutory provision and its purpose and applied it to the evidence available. He held that,The Arbitrator’s interpretation of the ECPA and the regulation in this context is a reasonable one. Planet has not shown that the Arbitrator made an error in her factual findings with respect to the basis for the views of OEB staff. Planet has not shown that as a result of the Arbitrator’s decision, the Award fundamentally offends the principles of justice and fairness in Ontario. The Arbitrator’s decision on the question of statutory interpretation is entitled to deference.
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