Contract dispute

Introduction

Passport Canada and its suppliers of goods and services may use the services of the Adjudication and Conflict Management Office (ACMO) to submit their contract disputes. This mechanism is voluntary and the parties reserve the right to choose the type of mandate and the level of involvement of the mediator or arbitrator. These mechanisms are only available for goods and services agreements that have already been contracted. Bidders on a call for tenders wishing to challenge the contracting process must use the bid challenge procedures in effect at Public Works and Government Services Canada (PWGSC). Contracting parties who mutually agree to resolve their dispute through ACMO may give that office a mediation or arbitration mandate. The various aspects of these mandates are described below.

The key to a satisfactory procedure is that the parties agree from the outset on the terms and mandate of the mediator or arbitrator.

The objective of the conflict resolution protocol is to agree with regard to a dispute resolution mechanism. Hereafter you will find basic information to assist you in considering different ways to resolve business-related conflicts with Passport Canada, thereby avoiding the courts.

Options to settle

There are several types of disputes. Given the diverse resolution methods, you may choose the one best suited to your situation. The most frequently used methods for resolving disputes out of court are:

Mediation
Mechanism through which the parties confer a mandate on a mediator (a neutral and impartial individual) to assist them with their negotiations.
Arbitration
Technique that most resembles a court solution, an alternative for parties for whom negotiations or mediation have proved unsuccessful, or who feel that mediation is not an acceptable mechanism for examining and resolving a dispute.

Arbitration is a less formal and a quicker alternative than court proceedings. The arbitrator's decision is based on the facts, the contract between the parties, and applicable legislation. The arbitration decision might be binding or not on parties and it can be appealable or not.

There are various methods for defining the procedure and the terms of mediation or arbitration. For examples, refer to the comparative table Mandates Types Grid.

Some of the advantages to considering mediation or arbitration in the prompt resolution of disputes are the flexibility of the process, control over decision-making, personal satisfaction, savings of time and money, the confidentiality of your information, and maintaining good relations.

The mediation mandate

The mediation mandate is provided in writing and signed by the parties and the mediator. It includes the following elements:

Identification of the parties;
Purpose of the mediation and voluntary aspect of the process;
Role of the mediator and his impartiality;
A commitment with regard to attendance and quality on the part of the parties at the mediation meeting;
A commitment of confidentiality with regard to oral or written exchanges during the mediation process to be signed by the parties and anyone else participating in the process;
An agreement that the mediator will not be called upon to testify in court;
The scope of individual meetings or private conversations (caucus);
The effect of mediation on time frames relating to legal prescription (allowable time to institute legal proceedings);
Ways to stop the process;
Length of the process;
Disbursements related to the mediation and modes of payment.

Procedure

In the case of disagreements between Passport Canada and suppliers of goods and services the Ombudsman will, at the request of the parties, initiate rounds of mediation or arbitration between Passport Canada and the supplier involved according to a predetermined mandate agreed upon by the parties. A wide range of services can be put forth by the parties, who may use the form to Elect the Mediation Mandate in a Contractual Matter to help them in considering options and desired effects.

All parties who feel they have been wronged in their business dealings with Passport Canada and who request a resolution may submit a request for mediation to Passport Canada's Ombudsman's Office. This request must be submitted in writing and may be in the form of the Mediation or Arbitration Request Form.

A concise and specific summary must be submitted to the office of the Ombudsman stating the nature of the dispute and expectations regarding its resolution. Copies of all relevant documents must also accompany this summary.

The Office of the Ombudsman, together with the parties, will prepare and carry out a mediation or arbitration mandate as described above.

No official documents or transcripts of documents relating to the mediation will be produced without the consent of the parties involved. Further, the parties will agree not to undertake legal proceedings relating to the mediation issue during the mediation process unless required to do so by law.

Mandate types grid

Mediation	Arbitration
Ombudsman acting as mediator carries out an impartial analysis of the applicant's allegations and the Agency's response.	Ombudsman acting as arbitrator proceeds alone or as chair of an impartial panel to analyse the claim and the Agency's response.
Proposal subject to ratification by the parties:	Parties electing arbitration: Sole arbitrator, or Arbitrator-chair, seconded by a representative appointed by each party. Final decision may or may not be appealed, or Decision is binding or not on the parties.
When the parties do not reach an agreement: The mediator determines the content of what he deems a reasonable offer; This assessment is reviewed by the parties, which are the Agency, a representative for the contracting authority (PWGSC), and the complainant; The parties advise the mediator of their acceptance or rejection of the offer; The parties can put forward counter-proposals or new resolution offers, which the other party may accept or reject. In the interest of facilitating agreement of the parties, the mediator's assessment may not be presented before other authorities to which the parties would have to appeal in the case of amicable non-resolution.	According to the above methods, the parties may undertake the following procedures: In the event that a panel is selected, the arbitrator acts as chair and prepares an arbitration report that the parties may or may not ratify; The representative of a dissenting party must prepare a minority opinion; The arbitration report, along with the minority opinion, is final or submitted to the parties for approval (depending on the original decision regarding the method of arbitration), who can in turn put forward different offers for resolution, also subject to ratification by the other party. The effectiveness of this method depends upon the thoroughness of the arbitration report providing the parties with a good understanding of the rationale of their positions and demonstrating that it is unlikely that better results could be obtained through the courts.
Contracts terminated for convenience may fall under the mediation mechanism: The mediator applies the contract termination clause, which generally implies payment for the portion of work completed, plus a reasonable provision in place of the profit on this portion of the work. Government or independent auditors may be called upon to examine the admissibility, accuracy, and appropriate nature of the expenses claimed.	The arbitrator carries out a detailed investigation of all of the technical, contractual and financial aspects of the claim on the part of the complainant. The arbitrator may independently bring in expert witnesses to testify as regards industry practices, and may negotiate fees for this expertise and divide the costs equally between the two parties when they are unable to agree on the nature of such practices. This is an essential element in providing an appreciation of the nature and effects of the act for which compensation is sought, and whether or not it constitutes a wrongful act. The parties may ask the arbitrator if they can be present to hear expert testimony, in which case they must not be hostile towards the witness, whose testimony will be balanced by that of another expert offering testimony in support of the dissatisfied party at the latter's cost.
Location of mediation: Mediation may call for confidential meetings with the mediator without the other party present in an effort to more open unveil matters in dispute, identify difficulties, and rapidly assess the possibility of finding a mutually acceptable solution. The mediator will suggest to the parties a location for the individual meetings.	Location of arbitration: The arbitrator establishes a simple process to resolve informally and as quickly as possible the dispute between the parties. The parties generally present their arguments in writing. If a witness is to testify with the parties present, the parties are consulted with regard to where the testimony will be given.