Arbitration Matters

August 24, 2026

Alberta – Court Dismisses Application to Decide Scope of Unwritten Arbitration Agreement – #957

In 1775773 Alberta Ltd. v Hill, 2026 ABKB 511, the Application Judge considered the limits of the Court’s jurisdiction to determine the scope of an arbitration. The case arose in circumstances where the parties had agreed that all but one of the issues between them would be arbitrated but had not entered into a written arbitration submission agreement or otherwise consented to the Court determining whether the remaining issue should be referred to arbitration. The Application Judge refused to refer any of the issues to arbitration, finding that there was no “meeting of the minds” on the submission agreement and that an arbitration agreement could not be implied from the parties’ Unanimous Shareholders Agreement (the “USA”). He also found that he lacked authority to refer the disputed issue to arbitration because the parties had not consented to the Court determining whether it should be arbitrated.

August 24, 2026

Québec – “May” means “must” in arbitration agreement – #956

In Avalin Group FZE c. Lauzon – Planchers de bois exclusifs inc., 2026 QCCA 651, the Québec Court of Appeal overturned a judgment of the Québec Superior Court, which refused to refer the matter to arbitration because the arbitration agreement stipulated that the parties “may” initiate an arbitration if mandatory mediation is unsuccessful. The Superior Court had ruled that the word “may” meant that the arbitration agreement did not exclude the jurisdiction of domestic courts. The Court of Appeal overturned that decision. It applied the rules of interpretation of contracts and concluded that the parties intended to enter into a binding and exclusive arbitration agreement (clause compromissoire parfaite), despite the ambiguity created by the word “may”. It therefore granted the application for declinatory exception and referred the matter to arbitration. The Court of Appeal’s decision aligns with more recent jurisprudence as well as commentary regarding arbitration agreements from both Québec and international sources.

August 24, 2026

Saskatchewan – Arbitral institution default award enforceable – #955

In Welter v. Parrish & Heimbecker Ltd., 2026 SKCA 62, the Court dismissed an appeal from a decision recognizing and enforcing a default arbitration award under The Enforcement of Foreign Arbitral Awards Act SS 1996, c E-9. 12 (the “EFAA”). The appellant failed to participate in the arbitration despite notice and did not pay arbitration institution fees as required. The arbitration rules agreed to by the parties permitted the arbitral institution to issue a default judgment in such circumstances, even when a tribunal had not been constituted. The arbitration institution issued a default judgment. The appellant raised several arguments that the award failed to satisfy the statutory prerequisites for enforcement and had been issued through a procedurally unfair process. The Court concluded that the appellant had not demonstrated any reviewable error in the enforcement decision.

July 27, 2026July 27, 2026

Ontario – JAMS arbitration clause survives bias and unconscionability challenges – #954

Abouzeid v. eXp Realty of Canada Inc et al., 2026 ONSC 3329 confirms that speculative concerns regarding institutional bias in the administration of an arbitration, absent evidence of actual unfairness or an inability to appoint an independent and unbiased arbitrator, will not render an arbitration agreement invalid, unconscionable, or incapable of performance, and will not prevent a mandatory stay under s. 7(1) of Ontario’s Arbitration Act, 1991, S.O. 1991, c. 17 (the “Arbitration Act”). The Court rejected the plaintiff’s two principal arguments: first, that the administering authority under the relevant arbitration agreement (JAMS) would be unable to administer an unbiased arbitration because the respondent frequently selected JAMS as an administering institution; and second, that the limited size of the Canadian JAMS arbitrator roster rendered the arbitration agreement incapable of performance (an issue for Canadian administering institutions to consider). These arguments failed because the parties were free to select any arbitrator – they were not restricted to the JAMS roster – and because repeat use of an administering authority does not give rise to bias.

July 27, 2026July 27, 2026

Ontario – Award enforced despite parties’ agreed institution and applicable rules changed – #953

InFrontier AF LP v. Rahmani, 2026 ONCA 289, was an appeal from an order enforcing an arbitral award made in Dubai. The primary issue was whether the application judge erred in considering the law of Dubai (the seat) in considering whether the arbitral procedure accorded with the parties’ agreement after the arbitration proceeded under a different institution and Rules regime than the ones specified in the parties’ agreement. The application judge found that the parties had agreed to procedural Rules that contemplated an amendment and that the new Rules were an amendment of the Rules specified by the parties in their agreement. The Court dismissed the appeal and accorded the application judge significant deference, finding that there was no extricable legal error in his interpretation of the parties’ agreed procedure.

July 27, 2026July 27, 2026

Québec – Arbitrator’s use of AI in award undermined arbitral process, justified annulment – #952

In Association des ressources intermédiaires d’hébergement du Québec (ARIHQ) v. Santé Québec – Centre intégré universitaire de santé et de services sociaux du Centre-Sud-de-l’Île-de-Montréal, 2026 QCCS 1360, the Court annulled an arbitral award after concluding that the arbitrator had relied on non-existent doctrine and case law seemingly generated through AI. The Court found that the reliance on hallucinated authorities undermined the integrity of the arbitral process and justifed annulment under articles 646 and 648 of the Code of Civil Procedure of Quebec (C.C.P.) The issue was not whether the use of artificial intelligence was itself a ground for setting aside the arbitral award; the question was whether the arbitral procedure chosen by the parties had been respected. The Court emphasized that its decision should not be understood as prohibiting the use of AI by arbitrators, but rather as requiring that the arbitrator remain personally responsible for the reasoning and authorities supporting the award.

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 30, 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.