Ontario –Arbitration Costs Payable Despite Application to Set Aside the Award – #767

In The Canada Soccer Association Incorporated v. Association de Soccer de Brossard, 2023 ONSC 4317, the Court held that the arbitrator’s cost decision was part of the arbitral final award, that a judgment enforcing the award extends to the decision on costs and that the winning party is entitled to the payment of its costs despite the losing party’s pending application to set aside the award, unless it obtains an interim order to the contrary. Rule 63.01 of the Ontario Rules of Civil Procedure, RRO 1990, Reg 194, which applies to appeals, does not apply – by analogy – to stay the costs order made as part of an award.

The basic facts of the dispute were as follows. Association de Soccer to Brossard (“ASB”) applied to Canada Soccer Association Incorporated (“Canada Soccer”) for a National Young Club Licence. Canada Soccer denied ASB’s application, and ASB appealed its decision to the Sport Dispute Resolution Centre of Canada. The Arbitrator ordered Canada Soccer to grant ASB a Licence for the 2023-2024 soccer season (the “Award”) and to pay ASB’s arbitration costs (“Costs Decision”).

Canada Soccer commenced an application to set aside the Award pursuant to s. 46(1)6 of the Arbitration Act, 1991, SO 1991, c 17, which provides that the court may set aside an arbitral award if the applicant “was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator” (the “Set-Aside Application”).

Stay motion – Canada Soccer also moved before the Court for an interim stay of the Award, pending determination of its Set-Aside Application. ASB brought a cross-motion to enforce the Award.

The Court dismissed Canada Soccer’s stay motion and granted ASB’s cross-motion to enforce the Award (see earlier Case Note # 729 – Court affirms narrow jurisdiction to set aside an arbitral award).

Enforcement efforts – When Canada Soccer failed to pay the costs of the arbitration, ASB commenced garnishment proceedings. Canada Soccer opposed the garnishment, arguing that the delivery of a notice of its Set-Aside Application stayed any collection process commenced by ASB regarding the arbitration costs. It relied on s. 63.01(1) of the Ontario Rules of Civil Procedure, arguing that it should apply by analogy. Section 63.01(1) provides:

“63.01 (1) The delivery of a notice of appeal from an interlocutory or final order stays, until the disposition of the appeal, any provision of the order for the payment of money, except a provision that awards support or enforces a support order.”  

The Court dismissed Canada Soccer’s argument. It found that the Costs Decision was part of the Award that could be enforced, that the Award was not subject to the stay provisions of the Rules of Civil Procedure and that the correct procedure to obtain a stay of the Costs Decision was to apply for an interim order, but that the conditions for such an interim order were not met. 

Indeed, the Court had already dismissed Canada Soccer’s stay motion, having found that there was no serious issue to be tried. In addition, there was no evidence that Canada Soccer would suffer irreparable harm if the Costs Decision were not stayed. Finally, the balance of convenience favoured ASB, because Canada Soccer had a greater financial capacity to bear the financial burden of paying the costs awarded to ASB. The Court also found that Canada Soccer’s arguments that the notice of garnishment should be set aside because ASB failed to provide full and frank disclosure and did not come to the Court with clean hands were without merit.

The Court therefore directed Canada Soccer’s bank to collect from Canada Soccer and pay to ASB the amount of $28,355.45 in payment of the Costs Decision.

Contributor’s Notes: 

This decision recognizes that the application to set aside a final award does not stay the winning party’s right to collect the payment of the costs of the arbitration. Courts will not simply adapt the Rules that apply in the courts to the arbitration process. To avoid garnishment proceedings, the losing party must obtain an interim order relieving it from its obligation to pay for the costs pending a decision on its application to set aside the award. In this case, the Court’s refusal to make such an interim order was largely attributable to his previous finding that Canada Soccer’s application to set aside the Award was, in effect, a disguised appeal of the merits and did not raise a serious question to be determined (see Case Note # 729 – Court affirms narrow jurisdiction to set aside an arbitral award).