B.C. – Material misapprehension of evidence is an extricable error of law – #662

In Escape 101 Ventures Inc. v March of Dimes Canada, 2022 BCCA 294, Justice Voith (for the Court) allowed an appeal of a commercial arbitral award on two grounds of significance: (1) the arbitrator demonstrated a material misapprehension of evidence going to the core of the outcome – this constituted an extricable error of law subject to appeal; and (2) an appeal is allowed with respect to “any question of law arising out of an arbitral award”, but this is not limited to errors arising from the formal award of the arbitrator. Here, the error was patent from the record, but was not apparent in the arbitrator’s reasons. The Court remitted the issue back to the arbitrator for reconsideration rather than substitute its own decision because there was no record of the proceedings, so it lacked the necessary evidentiary foundation to do so. (This was also the first appeal under the new B.C. Arbitration Act, S.B.C. 2020, c. 2.)

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Ontario – Court of Appeal upholds “single proceeding” insolvency model over recourse to arbitration – #660

In Mundo Media Ltd. (Re), 2022 ONCA 607, Court of Appeal for Ontario Justice Julie Thorburn dismissed a motion for leave to appeal a decision denying a motion to stay a receiver’s court proceeding. The Appellant/Moving Party sought the stay on the basis of an international arbitration agreement. Justice Thorburn found no reversible error in the motion judge’s choice to apply the “single proceeding model”, applicable in insolvency proceedings, with the effect that the Appellant/Moving Party, one of the insolvent company’s debtors, could not require the receiver to arbitrate its claim rather than litigate it. Together with the Superior Court’s decision below, this decision provides important guidance on the interplay between arbitration agreements and claims advanced in the bankruptcy and insolvency context.

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Québec – Annulment – No review of the merits and no reason to appeal – #658

Balabanyan v. Paradis, 2022 QCCA 877 is, hopefully, the last stage of this arbitration saga, which has come before the Court many times before. In a previous Case Note, Québec – Annulment – No review of the merits, even if award wrong #603, I reviewed how the Court dismissed each and every reason the Appellant raised against the arbitral award made against him. In her decision, Québec Superior Court Justice Harvie reaffirmed that courts have no jurisdiction to revisit the merits of an arbitral award or the arbitrator’s reasons and assessment of the evidence when a party is seeking homologation or annulment of an arbitral award. She also confirmed the strict scope of analysis of homologation/annulment grounds according to sections 645 and 646 CCP. In an ultimate attempt to annul the award made against him, the Appellant sought leave to appeal Justice Harvie’s decision. Firstly, the Court of Appeal took notice of Justice Harvie’s assessment that the Appellant acted in bad faith in the conduct of his proceedings: by seeking to “wear the opponent out of steam by a maze of procedures and ill-founded arguments”. This increased Appellant’s burden significantly and even more considering the fact that the Appellant’s application was out of time. The Court of Appeal dismissed the leave application because the Plaintiff did not demonstrate any reason to justify his demand.

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Ontario – Arbitrator to determine jurisdiction/validity of arbitration clause in employment dispute – #654

In Irwin v. Protiviti, 2022 ONCA 533, the Ontario Court of Appeal confirmed that, unless the question is one of pure law or is a question of mixed fact and law requiring only a superficial review of the evidence, questions about the jurisdiction of an arbitrator are to be arbitrated. This includes whether an arbitration clause in an arbitration contract is void for unconscionability, or for inconsistency with the Employment Standards Act, 2000, S. O. 2000, c. 41 (“ESA”) or the Human Rights Code, R.S.O. 1990, c. H. 19 (“the Code”).

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British Columbia – legal errors must reflect award’s actual reasons when read as a whole – #649

In The Fairways at Bear Mountain Resort Owners’ Association v Ecoasis Resort and Golf LLP, 2022 BCSC 1235,  Justice Donegan considered the threshold question for granting leave to appeal a final award, which is whether the alleged errors were questions of law.  In doing so she emphasized the importance of reading the award as a whole and considering what it was that the Arbitrator had actually decided.  When that was done in this case, she concluded that neither of the two suggested grounds for appeal (both concerning the application of a limitation period) were questions of law alone but were, instead, questions of mixed fact and law that were based on the Arbitrator’s construction of the contract. 

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B.C. – Leave to appeal threshold not overcome by strategic drafting – #645

In MDG Contracting Services Inc. v. Mount Polley Mining Corporation, MDG sought leave to appeal an arbitral award on the basis of section 30 (errors of law) and to set aside the award on the basis of section 31 (failing to observe the rules of natural justice) of the former B.C. Arbitration Act, RSBC 1995, c 55. Justice McDonald dismissed MDG’s petition on the basis that it failed to meet the threshold requirement for granting leave in cases where there is a “clearly perceived and delineated” question of law, or, a rare extricable question of law. Rather, MDG’s arguments raised questions of mixed fact and law by submitting that despite the Arbitrator making a correct statement regarding the law, when properly applied, it should have resulted in a different outcome. The court also rejected MDG’s argument that the Arbitrator failed to observe the rules of natural justice when he failed to explain how he reached a “summary conclusion”, as the Award contained ample detail regarding the Arbitrator’s findings.

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