Arbitration Matters

June 29, 2026June 29, 2026

Ontario – Peace River broadened proper parties to arbitration – #951

In Otter Point Properties Nominee Ltd. v GT Mann Contracting Ltd., 2026 BCSC 558, the Court ordered a stay of an action in favour of arbitration where some of the parties were signatories to the arbitration agreement and it was “arguable” that others were also parties. The Court found that Peace River Hydro Partners v. Petrowest Corporation, 2022 SCC 41 broadened the definition of party. Here, it was arguable that a non-signatory could become a party to the arbitration agreement “through its sole shareholder” who was a signatory and so could a non-signatory nominee of a contracting party if agency or a reason to pierce the corporate veil was established. The stay was granted based on the pleadings and the determination of the proper parties referred to the arbitrator under the principle of competence-competence.

June 29, 2026June 29, 2026

Ontario – ISDS award set aside on jurisdictional and bias grounds – #950

In Grace et al v United Mexican States, 2026 ONSC 2104, the Court set aside an arbitral award issued under the NAFTA on the basis that: (i) the tribunal wrongly declined jurisdiction; and (ii) one of the arbitrators had failed to disclose his involvement as counsel for a state in an arbitration involving similar issues, which gave rise to a reasonable apprehension of bias. This case focused, among other things, on the continuing duty of arbitrators to make disclosure.

June 29, 2026June 29, 2026

Ontario – Counsel disqualified in action and arbitration over access to privileged documents in arbitration – #949

In Specialty Life Inc. v. Daumier Financial Services Inc., 2026 ONSC 1869, the Court ordered the disqualification of plaintiffs’ counsel because it had requested, received, and reviewed some of the defendants’ privileged documents as counsel for the plaintiffs in a related arbitration, albeit for a legitimate purpose in that arbitration. The Court found that there were no steps, short of disqualifying plaintiffs’ counsel in both the action and the arbitration that would “avoid the mischief resulting from use of the [defendants’] privileged information”.

June 1, 2026

Ontario – A med-arb agreement is a multi-tier agreement – #948

In Friel v HUB International Limited, 2026 ONCA 313, the Appellant signed an employment agreement with a med-arb clause and an option agreement for shares with a forum selection clause that stated that the Courts of Delaware had jurisdiction over any disputes. When a dispute arose, the Appellant sought an order appointing an arbitrator and a declaration that the option agreement was unconscionable and invalid. Ultimately, the motion judge and the Ontario Court of Appeal found that the employment agreement did not apply and that the Courts of Delaware had jurisdiction. This case note considers the unique aspects of a med-arbitration agreement as compared to a standard arbitration in a jurisdiction analysis. A med-arb agreement is best understood as a variety of stepped arbitration agreement.

June 1, 2026

Newfoundland and Labrador – Model Law applied to domestic commercial dispute – #947

In 55104 Newfoundland and Labrador Inc. v. Wärtsilä Canada Incorporated, 2026 NLSC 29, the Court granted a stay and referred a warranty dispute to arbitration before the ICC in Paris. The Court held that the province’s International Commercial Arbitration Act, RSNL 1990, c. I15 (“ICAA”), not the domestic Arbitration Act, RSNL 1990, c. A14 (the “AA”), governed the dispute, even though all the parties and the subject of the contract were in Newfoundland. That mattered, as under the ICAA, a stay was mandatory unless a narrow exception applied (which it didn’t). Under the AA, the Court would have had discretion to refuse a stay, as the Plaintiffs urged. The decision highlights Newfoundland’s outlier status among common law provinces. While its domestic statute still permits discretionary stays, other common law provincial statutes provide for mandatory stays.

June 1, 2026June 1, 2026

Québec – Arbitrator appointed despite separate action challenging arbitration clause’s validity – #946

In Investissements Cleary inc. v. 9324-4465 Québec inc., 2026 QCCQ 1321, the Court of Québec granted the Plaintiff’s application to appoint an arbitrator in a case involving a claim for unpaid rent under a commercial lease. Following service of the notice of arbitration, the Defendants refused to participate in the process, including in appointing the arbitrator, because their position was that the lease containing the arbitration clause was a nullity. Instead, they initiated an action in the Superior Court of Québec, in which they sought to have the lease declared null and void. The Defendants argued before the Court of Québec that: it had no jurisdiction to make the appointment in light of its action; that there should be priority given to court proceedings over arbitrations to avoid multiplicity of proceedings; and that making the appointment could give rise to inconsistent orders because the issues in the two actions overlapped. The Court dismissed these arguments and made the arbitrator appointment, finding that the arbitrator should be the first to rule on his own jurisdiction in light of the challenge to the arbitration agreement, in conformity with competence-competence. The other court proceeding was not relevant.

May 6, 2026May 6, 2026

Ontario – Aroma Round 2: no set-aside where procedural breach on non-material issue – #945

In Aroma Franchise Company, Inc. et al v. Aroma Espresso Bar Canada Inc. et al, 2026 ONSC 768, the Court dismissed a second application to set aside two arbitral awards in the “Aroma saga”, this time on various grounds pursuant to Article 34 of the Model Law (procedural breach relating to inability to present one’s case on an issue, jurisdiction, and sufficiency of reasons – the ground relating to jurisdiction was straightforward and is not addressed in this case summary). Although the Court found that the Applicants were unable to present their case on one issue (whether one individual was a proper party to the arbitration), such that Article 34(2)(ii) of the Model Law was met, it concluded that this issue was superfluous and accordingly did not exercise its discretion to set aside the award because the issue was not material.

April 30, 2026April 30, 2026

B.C. – No Leave to Appeal on Question of Law not “Arising Out of Award” – #944

In Seylynn (North Shore) Development Limited Partnership v. Seylynn (North Shore) MP Ltd., 2026 BCCA 78 [Seylynn], the Court upheld the dismissal of an application for leave to appeal a costs award on the basis that the appellant had not identified a legal question “arising out of” the arbitration award as required under section 59(2) of the British Columbia Arbitration Act, SBC 2020, c. 2 (the “Act”). Both levels of Court denied the appellant’s central argument that the respondent had retained a benefit that it already had and therefore could not be considered to be the substantially successful party for the purposes of a costs award.

April 30, 2026April 30, 2026

B.C. – Correctness standard applies to arbitral appeals on questions of law – #943

In Vancouver School District No. 39 v Kingsgate Property Ltd., 2026 BCCA 98, the Court, in the context of an appeal of an arbitral award interpreting a lease provision in a rent renewal dispute, held that the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration v Vavilov, 2019 SCC 65 (“Vavilov”), applies to appeals of arbitral awards on questions of law brought pursuant to statutory appeal rights. As a result, in British Columbia, a correctness standard of review now applies to arbitral appeals on questions of law. This decision adds to the increasing, and increasingly inconsistent, body of Canadian appellate case law on Vavilov’s impact on the standard of review applicable to appeals of arbitral awards.

April 6, 2026April 10, 2026

B.C. – Narrow basis for refusing to stay an action reiterated – #942

In Aspen Technology, Inc. v. Wiederhold, 2025 BCCA 261 (“Aspen“) the Court reversed a lower court’s finding that an arbitration clause was void and inoperative. In concluding the motions judge erred, the Court confirmed the very limited grounds upon which a court can refuse to stay an action in favour of arbitration. It closes a door the lower court in Aspen had opened and corrects the lower court’s application of the Dell Computer and Uber frameworks.