Council Member Inquiry Form Demande de renseignement dun membre du Conseil Submitted at: Environment Committee Prsent au:

Comit de lenvironnement

From/Exp.: Councillor/Conseillre: Maria McRae

Date: May 22, 2013 Date: le 22 mai 2013

File/Dossier : ENV 01-13

To/Dest.: City Clerk and Solicitor / Greffier municipal et chef du contentieux Subject/Objet: Arbitration Agreement with Orgaworld / Convention darbitrage avec Orgaworld Inquiry: At the regular meeting of the Environment Committee of May 21, 2013, the following inquiry was made to the City Clerk and Solicitor from Committee Chair McRae: That the City Clerk and Solicitor, within the limits of the confidentiality requirements set out in the Arbitration Agreement with Orgaworld as well as the National Arbitration Rules, provide all Members of Council with a memo outlining the City's commercial arbitration with Orgaworld, including when Council might anticipate a decision, as well as a broader explanation of the commercial arbitration process, with particular emphasis on the confidentiality required of parties involved in such arbitrations. The City Clerk and Solicitor will work with the Auditor General to provide his insights regarding the audit on this matter. Direction to Staff: Chair McRae requested that this memorandum be sent to members of Council by Friday, 24 May 2013.

Demande de renseignement: Lors de la runion du Comit de lenvironnement du 21 mai 2013, la demande de renseignement suivante a t faite au greffier municipal et chef du contentieux de la prsidente du Comit McRae : Que le greffier municipal et chef du contentieux, conformment la rglementation sur la confidentialit tablie dans la convention darbitrage conclue avec Orgaworld, ainsi quaux Rgles darbitrage nationales, prsente tous les membres du Conseil une note de service dvoilant les grandes lignes du processus darbitrage commercial entre la Ville et Orgaworld, en indiquant notamment le moment o le Conseil peut sattendre la prise dune dcision, de mme quune description gnrale du processus darbitrage commercial, mettant en lumire les exigences en matire de confidentialit des parties concernes par un tel processus darbitrage. Le greffier municipal et chef du contentieux travaillera avec le vrificateur gnral pour fournir son point de vue concernant laudit sur cette questions. DIRECTIVE DU PERSONNEL : Prsidente McRae a demand que cette note sera envoye aux membres du Conseil par le vendredi 24 mai 2013.

Response (Date: 2013-May-24) There has been significant public discussion, in the media and elsewhere, regarding the ongoing commercial arbitration between the City of Ottawa and Orgaworld. In order to address some of the questions that have arisen in the context of this litigation, a more comprehensive explanation of the rationale underlying the selection of arbitration as the preferred dispute-resolution mechanism in commercial dealings may be helpful. Commercial Arbitration Process Upon entering into a commercial relationship, parties to a contract must try to foresee and address the wide variety of matters that might affect their relationship. In light of the complexity of some commercial relationships, the possibility that some disagreement will arise over the interpretation or administration of the contract cannot be overlooked. Therefore, the parties will often seek to put in place some mechanism to resolve these disagreements, recognizing both the likely ongoing and long term relationship between the parties and the fact that terminating the relationship in its entirety may not be in the interests of either party to the contract. Therefore, the parties are left either with the traditional recourse to the courts, or to the alternative of commercial arbitration. The reasons why commercial arbitration is frequently seen as the preferred option, as well as the advantages and disadvantages of arbitration, are outlined in further detail below. Why Do Parties to a Contract Select Arbitration? In general, the decision to use arbitration to resolve disputes, rather than the courts, is made at the time the parties enter into a contract. In the event that arbitration is selected as the preferred dispute resolution method, an arbitration clause is inserted into the contract requiring recourse to arbitration rather than civil proceedings in the event of a dispute. The preference for arbitration can be based on a number of factors, including the following: 1. The parties are able to define their own dispute-resolution process. In many commercial contracts, this process includes forms of Alternative Dispute Resolution (ADR), such as informal or formal mediation, that can be used to resolve disagreements before they get to arbitration. The result, in many cases, is a mutually-agreeable dispute resolution mechanism that is arguably more flexible and more efficient than having to resort to the courts where the parties in a commercial relationship need the intervention of a third party to resolve an issue that has arisen.

2. The parties can select who will hear their dispute. The parties involved in a dispute over a commercial contract can select an arbitrator

Rponse (Date: le 24 mai 2013) Le processus darbitrage commercial qui est en cours entre la Ville dOttawa et Orgaworld a donn lieu, dans les mdias et ailleurs, un dbat public important. Afin de rpondre certaines des questions souleves dans le contexte du prsent litige, il peut tre utile doffrir une explication plus dtaille des motifs sous jacents au choix du processus darbitrage comme mcanisme privilgi de rsolution des litiges en matire de transactions commerciales. Processus darbitrage commercial Lorsquelles amorcent une relation commerciale, les parties un contrat doivent essayer de prvoir et de rsoudre toute une srie de questions susceptibles davoir des rpercussions sur leur relation. Compte tenu de la complexit de certaines relations commerciales, la possibilit que des dsaccords surviennent quant linterprtation ou ladministration du contrat ne peut tre nglige. En consquence, les parties un contrat sefforceront souvent de mettre en place un mcanisme quelconque pour rsoudre ces dsaccords, en reconnaissance du fait quune relation durable et long terme est une possibilit future et quune brisure complte de la relation tablie nest pas dans leur intrt mutuel. Ainsi, les parties ont le choix entre le recours traditionnel aux tribunaux ou un processus darbitrage commercial. Les raisons pour lesquelles le processus darbitrage commercial est souvent considr comme loption privilgie, de mme que les avantages et les inconvnients de ce processus, sont dcrites plus en dtail ci-aprs. Pourquoi les parties un contrat choisiraient-elles larbitrage? En gnral, la dcision de recourir un processus darbitrage pour rsoudre les litiges plutt quaux tribunaux est prise au moment de la passation dun contrat entre les parties. Dans lventualit o le processus darbitrage est choisi comme mthode de rglement des litiges privilgie, une clause darbitrage incluse au contrat exige des parties quelles aient recours larbitrage plutt qu des poursuites civiles en cas de litige. La prfrence pour larbitrage peut tre fonde sur un certain nombre de facteurs, y compris les suivants. 5. Les parties sont en mesure de dfinir leurs propres processus de rglement des litiges. Dans de nombreux contrats commerciaux, ce processus inclut des formes de rglement extrajudiciaire des diffrends (RED), comme la mdiation officieuse ou officielle, qui peuvent tre utilises pour rgler des litiges avant den arriver au processus darbitrage. Dans bien des cas, il en rsulte un mcanisme de rglement des litiges qui est mutuellement acceptable et sans doute plus souple et plus efficace quun processus judiciaire qui ncessite que les parties entretenant une relation commerciale fassent appel une tierce partie pour rsoudre un litige. 6. Les parties peuvent dsigner la personne qui entendra leurs points de vue.

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Response to be listed on the Environment Committee Agenda of June 18, 2013 La rponse devrait tre inscrite lordre du jour de la runion du Comit de lenvironnement prvue le 18 juin 2013