Ontario – Arbitrators cannot ignore the law or defy the Court – #836

In Eyelet Investment Corp. v. Song, 2024 ONSC 2340, the Divisional Court’s decision starts with: “Domestic arbitrations in Ontario must be decided in accordance with the law. Arbitrators are accorded broad deference for matters within their jurisdiction and in defining the scope of their jurisdiction. But they are not free to ignore the law or to decide cases in accordance with their whims”. In Eyelet, the Court set aside the damages award from an arbitration concerning repudiated real estate transactions. The Court identified multiple instances where the arbitrator defied directions from the Supreme Court to determine the claims and remedies on remittal. Rather than following the law, the arbitrator addressed damages in accordance with his sense of fairness. The Court directed the damages and cost determinations to a new arbitrator.

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B.C. – Corrected award resets appeal time limits – #822

In Desert Properties Inc. v. G&T Martini Holdings Ltd., 2024 BCCA 24, the Court determined that when an arbitral tribunal corrects an award, the time to seek leave to appeal runs from the date of issuance of the corrected award (“Corrected Award”).   The appeal limitation period is not linked to party receipt of the original award (“Original Award”), irrespective of whether the grounds of appeal concern award corrections. The Court’s decision under Arbitration Act, SBC 2020, c. 2  (the “Act”) is consistent with other authorities which have considered the interplay between corrected awards and time limits for award challenges. 

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Québec – Arbitration clauses bind parties only, even if parallel proceedings – #780

In Clinique Ovo inc. v. Elite IVF, 2023 QCCA 1097, the Court determined that an arbitration clause barred some, but not all third-party claims. The factual matrix underlying this decision is convoluted: two agreements; similar but not identical arbitration clauses; and multiple actors. The background facts are sensational: an alleged fraudulent in vitro impregnation involving parties in Geneva and Cyprus; a birth in Monaco; disputed support payments required from a bewildered father; and, inevitably, litigation with third-party claims raising issues of arbitration clause interface with the court proceedings. Against this backdrop, the Court of Appeal decision is grounded in a key and decisive first principle: arbitration clauses bind parties to the agreement, not strangers. 

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New Brunswick – Arbitration award not trigger for discoverability of related claim– #764

In Architecture 2000 Inc. v. Moncton, 2023 NBCA 50,  a unanimous Court of Appeal summarily dismissed civil claims of breach of contract and negligence in the design and management of a building addition. While the appeal turned on New Brunswick’s limitations legislation, claims made in an earlier arbitration from the same construction project were crucial to this outcome, as explained below. The decision exemplifies problems that can arise in a dispute in which there are multiple contracts at issue, when some players are parties to some contracts but not others, and when an arbitration agreement covers only some of the disputes between the various contracting players.

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Federal – Stay test may vary – no Canadian standard arbitration stay provision – #755

In General Entertainment and Music Inc. v Gold Line Telemanagement Inc., 2023 FCA 148, a  unanimous Federal Court of Appeal (Webb, Rennie, and Locke, JJA) upheld a stay of court proceedings in a copyright and trademark infringement action.  As a result, complicated disputes about party identity will be resolved in the international arbitration, not by the court which heard the motion to stay. The decision underscores a key stay of proceedings principle: complex questions of fact or mixed fact and law relating to arbitral jurisdiction should first be referred to the arbitrator.  This is so even in the absence of a standard statutory stay of proceedings provision, as occurred in this case. Stay considerations differ by jurisdiction and context, domestic or international, and it is not an invariable technical prerequisite that a party must apply for the stay before taking any step in the court proceedings.

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B.C. –Issue estoppel may bind tribunal to prior arbitration award – #741

In Kingsgate Property Ltd. v Vancouver School District No. 39, 2023 BCSC 560, Justice Stephens granted leave to appeal from an arbitral award in a rent renewal dispute, in which the Arbitral Tribunal elected not to follow the interpretation of a key contractual provision from an arbitral award rendered decades earlier.  In both rental renewal disputes, a key issue was a market value provision in a long-term lease of property.   Justice Stephens found that the proper interpretation of  a previous arbitral award and whether the Arbitral Tribunal properly applied the doctrine of issue estoppel raised questions of law. The leave grant decision will permit further court consideration of interesting and novel questions concerning the application of the doctrine of issue estoppel in an arbitration context.  

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B.C. – Non-participation in arbitration leads to procedural complexity – #724

In UMS Solutions, Inc. v Cornell, 2023 BCSC 214, Justice Morellato refused to dismiss a B.C. action seeking to enforce a New York judgment, which confirmed an arbitration award, on the basis of delay. This procedurally tangled, still unfolding dispute, first saw UMS Solutions, Inc. (“UMS”) succeed in arbitration claims in New York against a B.C. resident, Brad Cornell (“Cornell”), for purported breaches of a representation agreement (“Agreement”). Cornell elected not to participate in the New York arbitration. UMS next converted the arbitral award into a New York court judgment. Cornell failed in his attempt to have the judgment set aside in New York. UMS then commenced a B.C. action on the New York judgment. Justice Morellato denied there was inordinate delay in the B.C. action and permitted UMS’s claim to continue. 

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Ontario – Set-aside application can’t bootstrap appeal– #707

In Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861, a unanimous Ontario Court of Appeal found the Superior Court committed multiple errors in its review of three arbitral awards under s. 45 and s. 46 of the Arbitration Act, 1991, S.O. 1991, c. 17 (AA). The Court saw no extricable errors of law capable of appeal, only unreviewable findings of mixed fact and law. The Court also identified no breaches of procedural fairness justifying a set aside of the awards. The decision provides important instructions for curial review of arbitral awards, including:  

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Ontario – Narrow basis for excess jurisdiction set aside challenges reaffirmed – #688

In Mensula Bancorp Inc. v. Halton Condominium Corporation No. 137, 2022 ONCA 769, the Ontario Court of Appeal overturned a Superior Court set aside decision and restored an arbitral award. The Court reiterated and underscored directives from  Alectra Utilities Corporation v. Solar Power Network Inc., 19 ONCA 254: There is a narrow basis for set aside challenges to arbitral awards on the ground  of alleged excess of jurisdiction. Review of the substance of the arbitral award is not authorized. The correctness or reasonableness of the arbitrator’s decision is irrelevant. Set aside is not an appeal.

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