Arbitration Matters

June 1, 2026

Newfoundland and Labrador – Model Law applied to domestic commercial dispute – #947

In 55104 Newfoundland and Labrador Inc. v. Wärtsilä Canada Incorporated, 2026 NLSC 29, the Court granted a stay and referred a warranty dispute to arbitration before the ICC in Paris. The Court held that the province’s International Commercial Arbitration Act, RSNL 1990, c. I15 (“ICAA”), not the domestic Arbitration Act, RSNL 1990, c. A14 (the “AA”), governed the dispute, even though all the parties and the subject of the contract were in Newfoundland. That mattered, as under the ICAA, a stay was mandatory unless a narrow exception applied (which it didn’t). Under the AA, the Court would have had discretion to refuse a stay, as the Plaintiffs urged. The decision highlights Newfoundland’s outlier status among common law provinces. While its domestic statute still permits discretionary stays, other common law provincial statutes provide for mandatory stays.

June 1, 2026June 1, 2026

Québec – Arbitrator appointed despite separate action challenging arbitration clause’s validity – #946

In Investissements Cleary inc. v. 9324-4465 Québec inc., 2026 QCCQ 1321, the Court of Québec granted the Plaintiff’s application to appoint an arbitrator in a case involving a claim for unpaid rent under a commercial lease. Following service of the notice of arbitration, the Defendants refused to participate in the process, including in appointing the arbitrator, because their position was that the lease containing the arbitration clause was a nullity. Instead, they initiated an action in the Superior Court of Québec, in which they sought to have the lease declared null and void. The Defendants argued before the Court of Québec that: it had no jurisdiction to make the appointment in light of its action; that there should be priority given to court proceedings over arbitrations to avoid multiplicity of proceedings; and that making the appointment could give rise to inconsistent orders because the issues in the two actions overlapped. The Court dismissed these arguments and made the arbitrator appointment, finding that the arbitrator should be the first to rule on his own jurisdiction in light of the challenge to the arbitration agreement, in conformity with competence-competence. The other court proceeding was not relevant.

May 6, 2026May 6, 2026

Ontario – Aroma Round 2: no set-aside where procedural breach on non-material issue – #945

In Aroma Franchise Company, Inc. et al v. Aroma Espresso Bar Canada Inc. et al, 2026 ONSC 768, the Court dismissed a second application to set aside two arbitral awards in the “Aroma saga”, this time on various grounds pursuant to Article 34 of the Model Law (procedural breach relating to inability to present one’s case on an issue, jurisdiction, and sufficiency of reasons – the ground relating to jurisdiction was straightforward and is not addressed in this case summary). Although the Court found that the Applicants were unable to present their case on one issue (whether one individual was a proper party to the arbitration), such that Article 34(2)(ii) of the Model Law was met, it concluded that this issue was superfluous and accordingly did not exercise its discretion to set aside the award because the issue was not material.

April 30, 2026April 30, 2026

B.C. – No Leave to Appeal on Question of Law not “Arising Out of Award” – #944

In Seylynn (North Shore) Development Limited Partnership v. Seylynn (North Shore) MP Ltd., 2026 BCCA 78 [Seylynn], the Court upheld the dismissal of an application for leave to appeal a costs award on the basis that the appellant had not identified a legal question “arising out of” the arbitration award as required under section 59(2) of the British Columbia Arbitration Act, SBC 2020, c. 2 (the “Act”). Both levels of Court denied the appellant’s central argument that the respondent had retained a benefit that it already had and therefore could not be considered to be the substantially successful party for the purposes of a costs award.

April 30, 2026April 30, 2026

B.C. – Correctness standard applies to arbitral appeals on questions of law – #943

In Vancouver School District No. 39 v Kingsgate Property Ltd., 2026 BCCA 98, the Court, in the context of an appeal of an arbitral award interpreting a lease provision in a rent renewal dispute, held that the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration v Vavilov, 2019 SCC 65 (“Vavilov”), applies to appeals of arbitral awards on questions of law brought pursuant to statutory appeal rights. As a result, in British Columbia, a correctness standard of review now applies to arbitral appeals on questions of law. This decision adds to the increasing, and increasingly inconsistent, body of Canadian appellate case law on Vavilov’s impact on the standard of review applicable to appeals of arbitral awards.

April 6, 2026April 10, 2026

B.C. – Narrow basis for refusing to stay an action reiterated – #942

In Aspen Technology, Inc. v. Wiederhold, 2025 BCCA 261 (“Aspen“) the Court reversed a lower court’s finding that an arbitration clause was void and inoperative. In concluding the motions judge erred, the Court confirmed the very limited grounds upon which a court can refuse to stay an action in favour of arbitration. It closes a door the lower court in Aspen had opened and corrects the lower court’s application of the Dell Computer and Uber frameworks.

April 6, 2026April 6, 2026

Ontario – Procedurally unfair to rule based on a claim that appeared foreclosed – #941

In Foodies Curry & Shawarma Inc v Royal Paan Leasing Ltd, 2026 ONCA 26, the Court set aside a judgment of the Superior Court of Justice on grounds of procedural fairness. The judgment dismissed an application for specific performance of an asset purchase agreement but granted restitution on grounds of unjust enrichment. However, the restitution claim was not expressly requested in the Notice of Application and was raised for the first time at the oral haring. Based on the application judge’s interventions at the hearing, the defendant believed the restitution claim to have been foreclosed and made no submissions on the matter. In the circumstances, the Court held that the defendant was deprived of its right to know the case it had to meet and to meet that case.

April 6, 2026April 6, 2026

Ontario – Application to set aside award in baseball arbitration denied – #940

In Stronach v. Stronach, 2025 ONSC 7158, the Parties, who had been embroiled in years of acrimonious litigation related to their family enterprise, agreed to a settlement that included a final-offer (or “baseball”) arbitration to determine the value of the Respondents’ agreed share of the businesses. The Applicants later challenged the arbitral award, which had been rendered by a prominent business valuator. They argued, among other things, that it should be set aside because the Arbitrator relied on an expert report, which was outside his jurisdiction because it did not comply with the valuation standards agreed to by the Parties. The Application Judge dismissed the application, describing it as “very weak” on the purported jurisdictional issue. In substance, he viewed it as a challenge to the merits of the award where there was no appeal. In any event, the Application Judge held that the Applicants had “agreed” to admit the impugned expert report into evidence to challenge its weight. By not objecting to the report’s admissibility at the hearing or to the Arbitrator’s authority to receive it, the Applicants waived their ability to later raise the jurisdictional argument on a setting aside application.

The case raises a number of procedural fairness issues, but this summary will focus on jurisdiction and waiver issues.

March 11, 2026March 11, 2026

B.C. – Mistake in weighing evidence not error of law – #939

In CIMIC Morningstar Investments Ltd. v. Chandos Construction Ltd., 2026 BCCA 2, the Court denied leave to appeal pursuant to s. 59 of the Arbitration Act, S.B.C. 2020, c. 2 (the“Act”) with respect to alleged errors of law in an arbitral award concerning liability and damages for construction delays. The arbitrator found that the applicant/owner, CIMIC Morningstar Investments Ltd. (“CIMIC”), had materially contributed to delay through design changes and late approvals and awarded the general contractor $6.5 million in damages, interest, and costs. The Court ruled that none of the four grounds alleged by CIMIC raised questions of law. What CIMC argued were the arbitrator’s misapprehensions of the evidence going to the outcome (which this Court has found constitutes an error of law, most memorably in Escape 101 Ventures Inc. v. March of Dimes Canada, 2021 BCCA 313) was actually a challenge to the arbitrator’s weighing of the evidence.

March 11, 2026March 11, 2026

Northwest Territories – Peace River Analogized in Oppression-Driven Disclaimer of Arbitration – #938

In TSA CORPORATION et al v KPMG LLP, 2026 NWTSC 2, the Court approved a Receiver’s request to disclaim arbitration agreements between companies in receivership (the “LKDFN Companies”) and KPMG, which the LKDFN Companies’ former CEO had engaged to provide accounting services and tax advice. The Receiver had been appointed to facilitate the LKDFN Companies’ recovery from oppression at the hands of their former CEO. Relevant statutes, and the Receiver’s appointment order, authorized a broad range of potential remedies, expressly including the power to disclaim contracts with third parties. Reasoning by analogy to Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, the Court approved the Receiver’s request because “not doing so would compromise the fair and orderly correction” of “a scenario of exploitation, unfairness, and the obliteration of autonomy.” The Receiver’s disclaimer rendered arbitration agreements between the LKDFN Companies and KPMG unenforceable under the Arbitration Act, SNWT 2022, c 14. As a result, the Court denied KPMG’s application to stay derivative actions brought against it.

The social context of this case was key. The LKDFN Companies’ former CEO had “knowingly breached his fiduciary duties to the LKDFN Companies, including failing to disclose his own interests, which were significant, and he caused them to enter into agreements, transactions, and governance structures which were unfair and prejudicial.” The LKDFN Companies had been organized to serve economic and other needs of the First Nation, infusing this case with the “special social context attendant to the exploitation of a vulnerable indigenous group.” This context situated the case in the process of truth and reconciliation with Canada’s First Nations, including the interpretive lens of federal and territorial legislation implementing the United Nations Declaration on the Rights of Indigenous Peoples.