The standard of review for an appeal of a commercial arbitration award has been a topic of debate since the release of the administrative law decision of Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov]. Since then, lower courts in Canada have grappled with two opposite interpretations: the first, that the standard of review analysis in Vavilov applies to commercial arbitrations, and the second, that the standard of review for commercial arbitration awards is reasonableness, as established in Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 [Sattva] and Teal Cedar Products Ltd v British Columbia, 2017 SCC 32 [Teal Cedar].
There are only two appellate-level decisions that address the question of the standard of review applicable to commercial arbitrations post-Vavilov.
The first was Northland Utilities (NWT) Limited v Hay River (Town of), 2021 NWTCA 1 [Northland], which held that the Vavilov framework overturned Sattva and Teal Cedar, and that parties should follow the analysis in Vavilov to determine the applicable standard of review. Under this analysis, the appellate standards set out in Housen v Nikolaisen, 2002 SCC 33 apply because domestic arbitration legislation provides a right of appeal. The standard of review for appeals of commercial arbitrations will often be correctness because many arbitration statutes only allow for appeals on questions of law, unless the parties agree otherwise (see e.g. the lower court decision Buffalo Point First Nation v Cottage Owners Association, Inc,2023 MBKB 141 at paragraphs 28 and 30).
The second appellate-level decision was issued this year. In Buffalo Point First Nation v Buffalo Point Cottage Owners Association Inc, 2025 MBCA 72 [Buffalo Point], the Manitoba Court of Appeal found, contrary to Northland, that Vavilov did not overturn Sattva and Teal Cedar. As a result, the standard of review for commercial arbitrations is reasonableness unless the question would otherwise attract a correctness standard (such as a constitutional question).
The underlying facts in Buffalo Point are complicated and have a lengthy procedural history. The facts, the lower court decision, and a summary of the appeal decision are set out in previous Arbitration Matters case notes (See Case Note 790, “Manitoba awards set aside after arbitrator rewrote parties bargain” and Case Note 921, “First CA finding reasonableness standard applies to commercial award appeals”).
In brief, in the lower court decision, Buffalo Point First Nation v Cottage Owners Association, Inc,2023 MBKB 141, the Court found that the standard of review on the appeal was correctness, on the basis that the appeal raised a question of law. The Court’s conclusion relied, in part, on a finding that the Supreme Court of Canada’s reasoning in Vavilov applies to commercial arbitrations.
However, on appeal, the Manitoba Court of Appeal found that Vavilov did not overturn Sattva or Teal Cedar, and thus, the standard of review applicable to appeals of commercial arbitration awards remains reasonableness. To reach this conclusion, the Court undertook a detailed analysis of the standards of review and how the standards had evolved. The Court’s reasoning highlighted that the Supreme Court of Canada in Vavilov did not address Sattva or Teal Cedar and that commercial arbitrations are distinct from administrative proceedings. As a result, the Court in Buffalo Point determined that Sattva and Teal Cedar remain good law unless specifically overturned.
The Court also addressed Northland, as the only other appellate decision on this point. According to the Court in Buffalo Point, the Northwest Territories Court of Appeal in Northland unduly relied on the argument that the legislature intended a consistent meaning of the word “appeal” across all statutes. Where mandates, policy bases, and purposes of statutes differ, then the meaning of the language may differ as well. Because there are key policy distinctions between commercial arbitration awards and administrative decisions, it is not justified to presume that the legislature intended a correctness standard by using the word “appeal” in the Arbitration Act.
But did Buffalo Point settle the debate? Or are there now simply two appellate-level decisions on the standard of appeal for commercial arbitrations, with opposite findings?
The debate likely continues. The question is an important one; the difference between a reasonableness or correctness standard can be critical on an appeal. Many courts have avoided the issue altogether by stating that the decision does not turn on the standard of review (see e.g. Wastech Services Ltd. v Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 at paragraph 46), but, like in Buffalo Point, another standard of appeal can change the result.
However, Northland and Buffalo Point both stand as good law. Outside Manitoba and Northwest Territories, the two decisions are both persuasive non-binding appellate authorities. As a result, parties will likely turn to the growing body of scholarship advocating for one position over the other – some of these are summarized in previous Arbitration Matters blogs. See for example Case Note 921, “First CA finding reasonableness standard applies to commercial award appeals”.
From my point of view, the holding in Buffalo Point is more persuasive. As noted at paragraph 41, the Northland decision did not arise out of a voluntary commercial arbitration and arguably should not apply to true commercial arbitration appeals. The finding in Buffalo Point is also consistent with the principle of stare decisis, in that Sattva and Teal Cedar have not been expressly overturned, and is consistent with the policy objectives of efficiency and finality in commercial arbitrations.
Buffalo Point’s application for leave to appeal to the Supreme Court is pending, and I will be watching to see if that Court decides to weigh in. A Supreme Court decision would be welcome to resolve the different appellate-level approaches. However, until then, parties are left to make their own arguments as to which decision should be followed in any future appeals of commercial arbitration awards.