In Frederico v Cabral, 2026 ABCA 251 (CanLII) a single judge of the Court of Appeal granted Federico’s application for permission to appeal a King’s Bench decision (the “Decision”) that set aside a spousal support Arbitration Award (the “Award”) and ordered a new hearing before a substitute arbitrator. The judge found that Federico had raised a reasonably arguable position: that the appointment of a substitute arbitrator exceeded the authority of the King’s Bench judge who heard the original appeal from the Award. Section 16(1) of Alberta’s Arbitration Act(the “Act”) provides that a substitute arbitrator shall only be appointed when an arbitrator’s mandate is terminated. Pursuant to section 14, an arbitrator’s mandate ends only under specific enumerated circumstances. None of them applied here. Despite this, the appeal judge appointed a substitute arbitrator on remittal. The case raises an important question: does an arbitrator’s mandate automatically end at delivery of a final award in Alberta? It also highlights whether a court can interfere with parties’ intention to have their dispute determined by a specific arbitrator by ordering a substitute arbitrator.
Background – The parties wed in 1995 and divorced in 2022. In 2024, the parties entered into an Arbitration Agreement (the “Agreement”), appointing a specific arbitrator to determine spousal support, costs and updated disclosure. The arbitrator awarded the wife compensatory support, but set the support quantum at $0 per month, subject to review on a material change in circumstances. It is important to note that the arbitrator jointly appointed by the parties did not resign, die, nor were they removed by either of the parties or the court following delivery of the Award. As such, none of the statutory grounds for terminating an arbitrator’s mandate pursuant to section 14 were present at the time of the original appeal, or thereafter.
Court of King’s Bench decision – The wife appealed the Award to the Alberta Court of King’s Bench, under section 44(1) of the Act, which permits an appeal of an arbitral award on a question of law, a question of fact, or a question of mixed fact and law. In pursuing the appeal, the wife argued that the arbitrator erred by not determining the parties’ incomes before applying the Spousal Support Advisory Guidelines to assess the quantum of support. The appeal judge characterized this issue as a question of mixed fact and law. (See para. 34.) In doing so, the appeal judge determined that the arbitrator had committed a palpable and overriding error. (See para. 7.) She set aside a majority of the Award, remitting quantum, duration, income determination, and costs to be determined by a substitute arbitrator. In a subsequent order she appointed the substitute arbitrator.
Application for permission to appeal and stay – The husband applied to the Court of Appeal, seeking permission to appeal under section 48 of the Act. It allows an appeal of a decision made under section 44 of the Act, with the permission of a justice of the Court of Appeal.
The husband argued that the appeal judge had exceeded her statutory authority by directing the appointment of a substitute arbitrator in place of the specific arbitrator jointly appointed by the parties. The husband advanced two arguments on the substitute arbitrator point: first, that the original arbitrator’s mandate had not terminated as none of the enumerated circumstances in section 14 were present, nor was the arbitrator removed pursuant to section 15 of the Act (see para. 27); and second, that the appointment of a substitute arbitrator effectively imposed a new contract on the parties, as the Agreement identified a specific arbitrator. The contractual conditions to appoint a substitute arbitrator in accordance with the Agreement did not arise. (See para. 32.)
The wife responded that the arbitrator’s mandate terminated upon issuance of the Award, pursuant to section 42(1)(a) the Act, thereby requiring the appointment of a substitute arbitrator under section 16. She further submitted that the husband could not challenge the substitute arbitrator appointment before the Court of Appeal, as he did not object to this specific request for relief that she made before the original appeal judge.
Decision – A single judge of the Court of Appeal granted permission to appeal and a partial stay.
Referring to UCANU Manufacturing Corp v Jardeg Construction Services Ltd, 2015 ABCA 371 at para. 21, the Court of Appeal reiterated the four-part test in Alberta for permission to appeal a decision to the Court of Appeal: 1) the questions raised are reasonably arguable; 2) deciding the questions will likely affect the result of the litigation; 3) the answer to the questions will likely be of interest to other persons or influence other matters; and 4) there are independent reasons not to relitigate the questions, or to limit the scope of the appeal. The Court reiterated that none of these considerations, on their own, is determinative.
(i) leave application – The single judge found that it was reasonably arguable that the King’s Bench judge hearing the appeal of the Award exceeded her authority by directing a new hearing before a substitute arbitrator.
The Court of Appeal judge noted that under section 14 of the Act, an arbitrator’s mandate terminates upon their resignation or death, the parties’ agreement to remove the arbitrator, removal following a successful challenge, or removal by court order under section 15 of the Act, at para. 26.
The Court disagreed with the wife, observing that section 42(1)(a) “says nothing about whether an award is “final” while under appeal” at para. 28. The Court also noted that section 49(3) permits enforcement to be withheld where the appeal period has not expired, an appeal is pending, or the award has been set aside, at para. 29.
With respect to the husband’s failure to object to the request for the appointment of a substitute arbitrator at the original appeal, the Court of Appeal reiterated the husband’s argument that even if he acquiesced at the time, which was denied, the appeal judge could not appoint a substitute arbitrator in these circumstances (See para. 31).
The Court of Appeal also noted that the Agreement contemplated that a specific individual would serve as the arbitrator unless specific conditions were satisfied and a substitute arbitrator appointed in accordance with the terms of the Agreement. These contractual conditions did not arise and the husband did not agree to amend the Agreement or enter into a new one. (See para. 32.)
The Court concluded that, “a reasonable argument is raised that the appeal judge exceeded her authority in directing the arbitration hearing to a substitute arbitrator […]” (para. 33). It found that the other three parts of the test for permission to appeal were met as the proposed appeal could materially affect the outcome of the litigation, raised issues of broader importance concerning the determination of spousal support and the authority to appoint substitute arbitrators, and presented no independent reasons to refuse permission. The Court accordingly granted permission to appeal the decision and supplemental order to the Court of Appeal.
(ii) Application for Stay Pending Appeal – The husband also sought a stay of the King’s Bench decision and supplemental order appointing the substitute arbitrator, pending the outcome of his appeal. The Court applied the well-known tripartite test from RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 SCR 311l) regarding a stay (para. 41) and held that proceeding with a new arbitration while the appeal was pending would inconvenience the parties, take considerable time, heighten conflict and expose the parties to significant expense that would be wasted if the appeal was successful, at para. 51. The Court therefore found that the balance of convenience favoured suspending the proceedings and exercised his discretion to stay the appeal decision, and the supplemental order appointing the substitute arbitrator until the appeal was determined, (para. 51).
Commentary:
This case raises an important question in the context of Alberta’s statutory regime governing arbitration: The question is, under this statutory regime, does an arbitrator’s mandate automatically end at the conclusion of proceedings?
First, a tension arises between the statutory provisions governing termination of an arbitrator’s mandate and the termination of the arbitration itself. Section 14 of the Act specifically enumerates the circumstances in which an arbitrator’s mandate terminates. The rendering of a final award, conclusion of proceedings or having the original award set-aside, are not among them. Section 42(1)(a) provides that an arbitration is terminated when the tribunal makes a final award addressing all matters in dispute. If an arbitrator’s mandate ends when the Award is issued, the appointment of a substitute arbitrator would be logical and comply with the statutory regime. However, in my opinion, the statute is arguably clear that delivery of an award does not terminate an arbitrator’s mandate.
Moreover, other provisions under the Act, that were not addressed by the Court, appear to logically lead to the conclusion that an arbitrator’s mandate does not end upon issuance of a final award under the Act. For example, section 44(4) requires the original arbitral tribunal to explain any matter if requested by the court in the context of an appeal, and section 44(5) allows the court the possibility to remit the award to the original arbitral tribunal. It does not follow that an arbitrator’s mandate would conclude following delivery of a final award under this statutory framework. (See also amplification of reasons (section 40) correction of errors (section 43) and when an arbitration may be “revived” section 42(3), that all require input from the original arbitrator.)
Second, the case raises the question of party autonomy in the selection of an arbitrator in situations of remittal. Under section 16(1) of the Act, a substitute arbitrator shall be appointed when an arbitrator’s mandate is terminated. Interestingly, section 16(5) of the Act provides: “[t]his section does not apply if the arbitration agreement provides that the arbitration is to be conducted only by a named arbitrator.” The question then becomes, can the court override the parties’ explicit intention to have their dispute heard by a specific arbitrator, as in the present case? The appeal judge’s decision to appoint a substitute arbitrator arguably offends the fundamental principle of party autonomy.
Next, the case raises a procedural point of whether the husband should have raised his objection to the appointment of a substitute arbitrator at the initial appeal. The Court of Appeal did not resolve whether the issue can be raised for the first time on a secondary appeal, and the outcome of this aspect of the case may have significant impacts for counsel handling appeals of arbitration awards. The Court of Appeal was not prepared to treat this argument as a barrier at the permission stage.
While Frederico is a permission decision, it identifies the question of whether an appeal judge has the authority to appoint a substitute arbitrator and the Court found that this question is reasonably arguable to warrant further appellate consideration. The outcome of this appeal may be consequential in outlining the limits of judicial authority to depart from the parties’ agreed choice of arbitrator, following a successful challenge to an arbitral award.
This decision reflects some of the issues raised in a Elisabeth Neelin’s Arbitration Matters Case Note: Alberta – Arbitrator’s Resignation does not terminate arbitration – #882, where the same statute was considered by the Court of King’s Bench of Alberta regarding sections 14 and 15 in providing special treatment of agreements naming an exclusive arbitrator. Interestingly, this decision was not addressed by the Court of Appeal in Frederico.