Alberta – Arbitrator not functus for issuing consent award after party denied settlement – #844

In Caroll v Caroll, 2024 ABKB 227, the Court found that the Arbitrator was not functus officio for issuing a Consent Award after a settlement was reached in a med-arb process.  One party denied the settlement but argued that, in any event, the Arbitrator’s jurisdiction was over after the settlement agreement and it was improper to “crystallize” the agreement into the Award. The Court dismissed this argument and found that there was a settlement. And the process was not unfair. The Arbitrator did not “conflate” the mediation and arbitration phases of the proceeding by terminating the proceeding after the settlement agreement rather than proceeding to arbitration once one party denied the settlement.

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Ontario – Arbitrators cannot ignore the law or defy the Court – #836

In Eyelet Investment Corp. v. Song, 2024 ONSC 2340, the Divisional Court’s decision starts with: “Domestic arbitrations in Ontario must be decided in accordance with the law. Arbitrators are accorded broad deference for matters within their jurisdiction and in defining the scope of their jurisdiction. But they are not free to ignore the law or to decide cases in accordance with their whims”. In Eyelet, the Court set aside the damages award from an arbitration concerning repudiated real estate transactions. The Court identified multiple instances where the arbitrator defied directions from the Supreme Court to determine the claims and remedies on remittal. Rather than following the law, the arbitrator addressed damages in accordance with his sense of fairness. The Court directed the damages and cost determinations to a new arbitrator.

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Ontario – Award unreasonable where tribunal failed to follow binding law on frustration – #832

In Taseko Mines Limited v. Franco-Nevada Corporation, 2023 ONSC 2055, the Ontario Superior Court of Justice (Commercial List) granted an appeal from an arbitral award due to, among other things, the arbitrator’s failure to apply binding precedent on frustration of contract. Although the Court applied a deferential reasonableness standard, it concluded the arbitrator’s departure from binding jurisprudence rendered the award unreasonable.

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B.C.  – Leave to appeal interim award premature until arbitration concludes – #825

Brown v Smithwick, 2024 BCCA 83 is about an application for leave to appeal an interim award brought pursuant to section 59 of the British Columbia Arbitration Act, SBC 2020 c 2 (“Arbitration Act”). The Applicant sought leave to appeal on the ground that the arbitrator had erred in law by concluding that a debt that the Applicant owed to the Respondent was a debt within section 178(1)(e) of the Bankruptcy and Insolvency Act, RSC 1985, c B03 (the “BIA”), as a debt that arises out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity. The reasons of the Court focused on the issue of whether the leave application was premature because the arbitration had not yet ended. The Court held that while it has the discretion to grant leave to appeal from an interim arbitral award, the circumstances of the case weighed against exercising that discretion, including: (1) early judicial intervention would interfere with the arbitration process that the parties had agreed to; (2) the Applicant had not demonstrated that it would be prejudiced by the adjournment; and (3) there could be multiple leave applications to the Court arising from the same arbitration. The Court adjourned the leave application pending the conclusion of the arbitration. 

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B.C. – Corrected award resets appeal time limits – #822

In Desert Properties Inc. v. G&T Martini Holdings Ltd., 2024 BCCA 24, the Court determined that when an arbitral tribunal corrects an award, the time to seek leave to appeal runs from the date of issuance of the corrected award (“Corrected Award”).   The appeal limitation period is not linked to party receipt of the original award (“Original Award”), irrespective of whether the grounds of appeal concern award corrections. The Court’s decision under Arbitration Act, SBC 2020, c. 2  (the “Act”) is consistent with other authorities which have considered the interplay between corrected awards and time limits for award challenges. 

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New Brunswick – Party autonomy includes ability to contract out of award – #821

The decision in Purrestore Management Services Inc., Gordon Gamble and Jason Reis v. Doiron, 2023 NBCA 110 concerns whether an arbitration clause in a franchise agreement that allowed a party to seek a de novo court trial if an arbitration award exceeded $100,000, conflicted with the mandatory provisions of the New Brunswick Arbitration Act, LRN-B 2014, c 100 (“Arbitration Act”).  The franchisor had obtained an arbitration award against the franchisees for over $100,000 (“Arbitral Award”).  The franchisees then sought a de novo trial, while the franchisor applied for judgment to enforce the Arbitral Award under s. 50 of the Act. The application judge affirmed the franchisees’ right to a de novo trial and dismissed the application for judgment.  The franchisor appealed, arguing that the Arbitration Act provided that s.50 could not be contracted out of and, therefore, in the absence of an appeal or an application to set aside the Arbitral Award the franchisor was entitled to judgment.  The Court of Appeal dismissed the appeal, concluding that the arbitration clause was not contrary to the Act as the Act permitted parties to contract out of s. 37, which provides that “an award binds the parties, unless it is set aside or varied under section 45 (appeal) or 46 (set aside)”.  To obtain a judgment to enforce an award under s. 50, a binding award under s. 37 was required but the parties had contracted out of 37 with their agreement. 

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Ontario – Principles applicable to awarding costs in domestic arbitrations clarified – #817

In Schickedanz v. Wagema Holdings Limited, 2023 ONSC 7219, the Court dismissed an appeal of an arbitrator’s costs award and in so doing, clarified two principles applicable to the awarding of costs in domestic arbitrations arising under the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Arbitration Act”). First, whereas in civil litigation, leave is required for an appeal from an order as to costs, the same is not true in relation to appeals from arbitral cost awards pursuant to Section 45 of the Arbitration Act. Second, the Court confirmed that unlike the Rules of Civil Procedure, arbitrators awarding costs pursuant to the Arbitration Act may award reasonable legal fees without reference to any court scale. Therefore, partial indemnity costs are not the governing presumption in domestic arbitrations and full indemnity costs may be awarded as reasonable without establishing undue or improper conduct. 

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B.C. – “Lacuna” identified in B.C.’s domestic arbitration scheme? – #811

In Bollhorn v. Lakehouse Custom Homes Ltd., 2023 BCCA 444, One justice of the Court of Appeal for British Columbia referred an application for leave to appeal from the decision of an arbitrator to a full panel of that Court. The Court identified what it termed “a gap [in the legislative scheme] that may confound the general understanding of ‘where there is a right, there is a remedy’”. That gap arises from the apparent application of the Vancouver International Arbitration Centre [“VanIAC”] expedited arbitration rules to claims under $250,000, which preclude appeals unless the parties agree otherwise. 

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Stephanie Reflects (2023): What’s the Standard? Reviews, Appeals and “Decisions of the Matter” – #806

For better or for worse, parties can challenge arbitral decisions through multiple avenues, whether through a review of a preliminary jurisdictional ruling, set-aside application, or appeal. Arbitration case law in 2023 highlighted a striking lack of consistency between the standards of review and appeal applied in each of these different avenues.

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B.C. – failure to answer fundamental question not an extricable error of law – #801

In Hudson’s Bay Company ULC v. Piret (18111 Blundell Road) Holdings Inc., 2023 BCCA 428, the Court held that the failure of an arbitrator to answer a fundamental question is a matter of interpretation of the arbitral award and does not give rise to an extricable error of law. It dismissed the application for leave to appeal. This decision seems to stand in contrast to other recent decisions coming out of the same court that have held a material misapprehension of evidence going to the core of an outcome of an arbitral award can amount to an extricable legal error.

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