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.
Background – The dispute arose out of a September 2020 Term Loan Agreement whereby the Respondent, InFrontier AF LP, a U.K.-based private equity firm, made a substantial loan to two schools in Afghanistan. The Appellant, Roeen Rahmani, the founder of the schools, personally guaranteed the loan.
When the Loan Agreement was made, a there was a partnership between the Dubai International Financial Centre Arbitration Institute (“DIFC Arbitration Institute”) and the London Court of International Arbitration (“LCIA”). The partnership operated as the DIFC-LCIA Arbitration Centre. The Loan Agreement stated that disputes were to be resolved by arbitration to be held in the DIFC under the DIFC-LCIA Rules of Arbitration by one or more arbitrators appointed in accordance with those Rules.
In September 2021, after the Loan Agreement was executed but before the arbitration was commenced, the government of Dubai enacted a law (“Decree 34”) that abolished the DIFC Arbitration Institute and transferred its rights and obligations to the Dubai International Arbitration Centre (“DIAC”).
In 2022, the DIAC approved its own arbitration rules. The Rules stated that, once effective, they applied regardless of the date of any underlying agreement providing for arbitration, “unless the parties agree otherwise”. On March 29, 2022, the DIAC and the LCIA issued a press release providing that all arbitrations commenced after March 21, 2022 under agreements that referred to the DIFC-LCIA Rules would be administered by DIAC in accordance with the rules of procedure of DIAC, “unless otherwise agreed by the parties”. The central issue in this case was whether the dispute was to be resolved under the old or new Rules.
The Respondent lender alleged that the schools had defaulted on the loan in December 2022, and, in 2023, commenced an arbitration against the Appellant guarantor and the schools. Over the guarantor’s objection, the arbitration proceeded under the new DIAC Rules. He argued (among other things) that the DIAC Rules compressed the deadlines in the proceedings, leaving insufficient time for him and the schools to be properly represented by legal counsel. The arbitrator ultimately rejected the defences he raised and, in August 2024, issued an award in the Respondent lender’s favour for over US$2.5 million.
Enforcement Application Decision – The lender applied to the Ontario Superior Court of Justice to recognize and enforce the award under the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5 (“ICAA”). The guarantor opposed enforcement on three grounds under the New York Convention (given force of law in Ontario through the ICAA):
(1) that the arbitral procedure did not accord with the parties’ agreement because it followed the DIAC Rules rather than the DIFC-LCIA Rules that were in force when the Loan Agreement containing the arbitration clause was entered into (Article V(1)(d));
(2) that he was denied a fair opportunity to present his case (Article V(1)(b)); and
(3) that recognition and enforcement would violate Ontario public policy (Article V(2)(b)).
The guarantor’s arguments in respect of each of these provisions turned on the same issues: that the arbitrator incorrectly applied procedural rules (the DIAC Rules) to which the parties did not agree; and that the Award depended on Decree 34 (a new law enacted by Dubai as the seat), which amended the arbitration agreement without the consent of the parties. The guarantor argued that each of the grounds were met and justified a dismissal of the enforcement application.
The application judge rejected the guarantor’s arguments under each of the grounds raised and made an order recognizing and enforcing the Award in Ontario. He first looked at what the arbitration agreement provided for in respect of the arbitral procedure. It referred to the DIAC-LCIA Rules as the applicable rules. He then noted that the preamble to the DIFC-LCIA Rules stated that any agreement to their application was an agreement to conduct any arbitration in accordance with the rules or “such amended version of those rules as the DIFC-LCIA Arbitration Centre may have adopted hereafter.” Therefore, the question before him was whether the DIAC Rules were an “amended version” of the DIFC-LCIA Rules. In answering that question, the application judge reviewed and interpreted Decree 34, concluding that the intention of Decree 34 was to replace the DIFC-LCIA Rules with a new version of the rules, the DIAC Rules. Thus, the DIAC Rules were an amended version of the DIFC-LCIA rules.
The application judge did not consider it necessary to determine whether there were material differences between the two sets of rules, as the arbitrator had correctly applied the DIAC Rules. Because the arbitrator correctly applied the arbitral procedure agreed to by the parties, the application judge concluded that there was no breach of procedural fairness or violation of public policy.
(For the Case Note on this lower court decision, see Ontario – Party bound by rule change despite not agreeing to it – #920).
The guarantor appealed to the Ontario Court of Appeal.
Ontario Court of Appeal’s Decision – The Court dismissed the appeal.
Most of the Court’s analysis was focused on the arguments raised under Article V(1)(d) of the Convention – the procedure did not accord with the parties’ agreement because it followed the DIAC Rules instead of the DIFC-LCIA Rules. The guarantor argued that the parties’ agreement specified the procedure as the DIFC-LCIA Rules and the application judge was required to consider solely whether the arbitrator followed those rules. Instead, he improperly looked to the law of the place of arbitration (Decree 34) to modify the agreed-upon procedure. The guarantor argued that the law of the place of arbitration was irrelevant because the parties agreed to use the DIFC-LCIA Rules. Therefore, the application judge erred in law when he considered Decree 34. While DIAC replaced the DIFC-LCIA Arbitration Centre as the administering institution, the DIFC-LCIA Rules still applied by virtue of the parties’ agreement.
The Court framed this issue – whether the application judge erred in considering the law of Dubai, the seat, in determining the parties’ agreed procedure – as the “principal issue on appeal.” The Court agreed with the guarantor that the question was whether the procedure followed was “not in accordance with the agreement of the parties.” However, in order to compare the procedure agreed to and the procedure that was followed, it was necessary to interpret the parties’ agreement to determine “what they have agreed.” The Court therefore found that the application judge correctly identified the key question as a matter of interpretation of the parties’ agreement in the Loan Agreement, which he then interpreted.
The parties agreed to the DIFC-LCIA Rules as the “applicable procedural rules” and those Rules, in turn, contemplated that they might be amended. Thus, the parties’ agreement was to any amended version of those Rules that were in place when their arbitration was commenced. The interpretative question before the application judge was whether the DIAC Rules was an amended version of the DIFC-LCIA Rules. The Court found that in conducting that analysis, the application judge “did not stray from the question of what procedural rules the parties had agreed to.”
The Court then asked, “[w]as the application judge barred from looking at Dubai law [the law of the seat], specifically Decree 34, in deciding whether there was an amended version of the DIFC-LCIA Rules in place at the time the arbitration was commenced?” The Court rejected the guarantor’s argument that in determining the parties’ agreed procedure, “the law of the place of arbitration can never be relevant.” The parties’ agreement, by contemplating amended versions of the rules, made the law of the place of arbitration relevant to the question of what rules the parties agreed to. The application judge did not err by looking to Decree 34 for this purpose. He did not “allow the law of the place of arbitration to contradict the parties’ autonomy by imposing on them a set of rules to which they did not agree.” He considered the law of Dubai as it bore on the questions of whether the rules had been amended and what that amended version was. The application judge’s interpretation of the agreement, and his finding of what the amended version of the rules was, was free of extricable legal error and subject to deference on appeal.
The guarantor also argued that the application judge failed to properly consider the fact that Decree 34, the DIAC Rules, and the press release by DIAC and LCIA all provided that the DIAC Rules did not apply if the parties agreed otherwise. He submitted that the parties did agree otherwise. The Court found this argument unpersuasive. The application judge found that reference to the parties agreeing otherwise was only with respect to an agreement made after the DIAC Rules became the amended version of the DIFC-LCIA Rules. The Court held this interpretation was reasonable and open to the application judge. No such agreement here was made.
In respect of the other two grounds raised under the New York Convention to deny recognition and enforcement, the Court found that there was no reversible error in the application judge’s finding that they were not established.. The guarantor’s argument that the procedure followed was one to which the parties did not consent or was unfair was “derivative of its argument under Article 1(d)” and no ground for appellate interference was established. Nor was there a reversible error in the application judge’s finding that circumstances giving rise to public policy concerns were not present.
Commentary:
The Court has reaffirmed Ontario’s strong pro-enforcement posture under the New York Convention and the ICAA. It emphasized that this is part of party autonomy, noting that the “purpose of the [Convention] is to facilitate the enforcement of arbitration agreements by ensuring that effect is given to the parties’ express intention to seek arbitration.”
It also provides a practical reminder to parties: if your arbitration clause contains an agreement that the applicable procedural rules are any future amended or updated rules (which invariably will be the case), then you are agreeing to a set of rules and procedures that may change before any dispute arises or arbitration commenced.
This decision is consistent with the approach taken by courts in other jurisdictions. In the Paris Court of Appeal decision in SAS ADB v. REO Inductive Components AG, 1st Chamber – Section C, 20 March 2012 [not publicly reported], one party argued that the arbitration agreement was void as it referred to an arbitral institution that no longer existed. The Paris Court of Appeal rejected that argument because there was a successor institution. Thus, like the Ontario Court of Appeal, the Paris Court of Appeal adopted a pro-arbitration stance that did not allow an arbitration clause to be undermined where a successor institution existed.
There is also a recent decision from Louisiana similarly addressing the enforceability of a DIFC-LCIA arbitration clause following the institution’s succession to DIAC under Decree 34. In 2023, in Baker Hughes Saudi Arabia Co. Ltd. v. Dynamic Industries, No. 2:23-cv-01396 (E.D. La.) a district court in the Eastern District of Louisiana found that because the DIFC-LCIA no longer existed, the parties’ arbitration clause was unenforceable and invalid. In 2025, this decision was overturned on appeal by the Fifth Circuit in Baker Hughes v. Dynamic Industries, No. 23-30827 (5th Cir. 2025). The Court found that, in the context of the arbitration clause in that case, the parties’ intention was to arbitrate generally and not to designate an exclusive forum.
While there are differences between that case and the Ontario Court of Appeal decision here, what the trend of cases shows is that the courts will not treat the naming of a since-abolished arbitral institution as fatal to the parties’ agreement to arbitration if there is a substitute institution. That is particularly true in the present case, where the arbitration clause contemplated the evolution and amendment of the applicable rules, and the prior institution was factually succeeded by a new institution that assumed its rights and obligations. Viewed through that lens, the decision is consistent with the principle of party autonomy as it safeguards the parties’ choice to arbitrate and to agree to a provision that implements evolution in the applicable procedural rules.