Saskatchewan – court’s narrow interpretation of its authority to review widens arbitrator’s autonomy to manage arbitral process – #010

Adopting a narrow interpretation of its supervisory role granted by Saskatchewan’s The Arbitration Act, 1992, SS 1992, c A-24.1., Saskatchewan’s Court of Queen’s Bench dismissed an application to review an arbitrator’s decision because the court’s jurisdiction had not been triggered.  The court in Government of Saskatchewan v Capitol Steel Corporation, 2017 SKQB 302 decided that it could only intervene if the arbitral ruling actually qualified as either one of two types of arbitral results listed for review in the legislation. 

 Unsatisfied with the status of the arbitration process, the Government of Saskatchewan applied to the court to review and overturn what it qualified as a decision on jurisdiction. It claimed that the other party had repudiated the undertaking to arbitrate and left the arbitrator without jurisdiction.  To decide the application, Kalmakoff J. reviewed the procedural history of the arbitration file, noting that the parties engaged in mediation-arbitration.  (The passages in the reasons for judgment provide anecdotal information on the interplay of mediation and arbitration.  It appears that the mediation was handled by the same individual serving as arbitrator but there is not enough information in the reported reasons to confirm whether it is an instance of med-arb.)   

Relying on the guidance set out by the Supreme Court of Canada in Dell Computer Corp. v. Union des consommateurs, [2007] 2 SCR 801, 2007 SCC 34, Mr. Justice Jeff D. Kalmakoff determined that jurisdictional decisions taken by arbitrators “should not be lightly removed from the hands of the arbitrator.”  Kalmakoff J. wrote that the arbitrator’s “ruling must be one which decides the issue of jurisdiction in a substantive way, not merely one that touches on the issue of jurisdiction in a procedural sense, in order to trigger s.18(9). 

 Kalmakoff J.’s review led him to conclude that his authority had not been “triggered” as the arbitrator had not made either an award or a definitive decision on jurisdiction.  In his closing remarks, he did appear to concede to the Government that it would have been procedurally more “beneficial” to have had an earlier ruling on jurisdiction but that he did not have the authority to intervene or question the arbitrator’s judgment to postpone deciding.  His respect for the process stemmed from his view of the arbitrator’s autonomy over the arbitral procedure. 

[19] The Act also makes it clear that arbitration is a valid method of dispute resolution, and that once parties have entered into an arbitration agreement, the arbitrator has full authority to determine the matters in dispute, in the fashion set out in the agreement, and that the courts should intervene only in limited circumstances, as set out in the Act.

As part of the procedural history, the arbitrator had been seized of a jurisdictional challenge but elected to deal with it at a later moment but prior to the hearing on the merits.  The Government applied to the court to review this decision but Kalmakoff J. declined to do so.  He observed that Saskatchewan’s arbitration legislation, similar to other provincial domestic arbitration legislation, placed limits on the court’s involvement in the arbitral process.   

[31] Rather than granting courts a wide-ranging and unfettered supervisory authority over arbitrations, the Act narrowly circumscribes and clearly delineates the points at which, and the depths to which, the court may intervene in its supervisory role. The Act also gives arbitrators the authority to shape procedures and to decide all matters necessary to resolve disputes between those parties who, by agreement, refer their disputes to arbitration. This includes making a determination as to whether the arbitrator actually has jurisdiction to decide the matter, and deciding when that decision should be made. 

The legislation allows the arbitrator two options when asked to rule on his or her jurisdiction: rule on jurisdiction as a preliminary question or reserve the decision until and as part of a subsequent award, either partial or final.  Access to the court’s supervision is restricted to either situation.   

[29] The operation of s. 18(9) of the Act, in my view, is only triggered by an arbitrator’s ruling on an objection where that ruling disposes of the question raised by the objection, i.e., where the arbitrator’s ruling actually decides the question of jurisdiction. A decision which defers that ruling is not a ruling “on” the objection simply because it is a decision that, in some way, relates to the objection. 

The decision reflects respect for the arbitral process and autonomy over the procedure even for key issues such as jurisdiction.  Unlike the majority of motions to challenge the result in an arbitration, the case dealt with a challenge to what the court treated as an interim procedural, placing it beyond the reach of the court’s review.