Appeal Archives - Page 2 of 11 - Arbitration Matters

January 2, 2025December 16, 2024

Josh’s 2024 Hot Topic – Consensual arbitration appeal mechanisms – #884

This year, in a landmark decision, McLaren Automotive Incorporated c.9727272 Canada Inc, 2024 QCCS 3457, the Québec Superior Court rendered a first-ever ruling that considered the validity of an arbitration appeal mechanism whereby the parties’ arbitration agreement allowed the appeal of an award to a different arbitrator. As reported in Arbitration Matters case note no. 864 (“Parties May Agree Upon an Arbitral Mechanism”), the Court found that such a mechanism does not offend public order principles set out in art. 622(3) of the Québec Code of Civil Procedure (“CCP”). Therefore, it found that Québec law does not prevent the parties from agreeing to an appeal mechanism in their arbitration agreement, even though it is not provided for in Québec arbitration law, which is based on the UNCITRAL Model Law.

December 16, 2024December 13, 2024

Ontario – Order of competence-competence analysis on stay motion challenged – #880

In Lochan v Binance Holdings Limited, 2024 ONCA 784 (“Binance”), the Court considered the appeal of the Motion Judge’s finding that an arbitration clause in a crypto trading agreement was void because it was contrary to public policy and unconscionable. The arbitration clause was part of a standard form contract between the appellant and crypto users. It provided that the appellant could change any part of the arbitration agreement, including the forum and governing law, and that users agreed to any amendments. On appeal, the appellant argued that the Motion Judge had failed to first consider the competence-competence principle in his analysis. The Court dismissed the appeal, finding that the Motion Judge had followed the approach of the Supreme Court of Canada in Dell Computer Corp. v Union des consommateurs, 2007 SCC 34 (“Dell”) and Uber Technologies Inc. v Heller, 2020 SCC 16 (“Uber”) when he considered the competence-competence principle before he considered if an exception to that principle applied to allow the court to consider if the clause was unenforceable.

December 4, 2024December 3, 2024

Ontario – Court weighs in on standard of review post-Vavilov (and decides) – #879

In Burwell v. Wozniak, 2024 ONSC 1234, the Court grappled with the appropriate standard of review to apply to arbitral awards. The heart of the underlying dispute was whether the appellant Burwell’s promise of shares in his company was sufficient to establish an estoppel against him in favour of his former partner, Wozniak. This case is noteworthy because most cases since Vavilov have not weighed in on the issue and have simply said that, regardless of the standard of review, the appellant does not meet it.

October 21, 2024October 18, 2024

B.C. – Court adopts award-centric review for questions of law – #869

In Desert Properties Inc. v. G&T Martini Holdings Ltd, 2024 BCCA 320, the Court rejected challenges to a liability award and an interest award in disputes stemming from a major property development. The Court dismissed applications for leave to appeal and cross-appeal for failure to demonstrate extricable errors of law in the liability award. The Court also ruled there was insufficient merit in a proposed appeal from a BCSC decision which had declined to set aside the interest award. Both parties have kept the B.C. courts busy with multiple challenges to these arbitral awards, generating three Case Comments in recent months. It can be argued that the Court’s mode of analysing extricable errors of law for the purposes of appeal has changed (perhaps ever so slightly) since its decision in Escape 101 Ventures Inc. v. March of Dimes Canada, 2022 BCCA 294, in which it found that misapprehensions of evidence that go the core of the outcome of a case are extricable errors of law.

October 9, 2024October 11, 2024

Alberta – Arbitrator’s issuance of award without all evidence was an error of law – #867

In Giacchetta v Beck, 2024 ABKB 481 (CanLII) (“Giacchetta”), the Court held, in the context of an arbitration conducted under Alberta’s Arbitration Act, RSA 2000 c A-43 (the “Act”), that it is an error of law for an arbitrator not to consider all the evidence. Here, the arbitrator stated that he had rendered his award without considering all the evidence and said that, “there may have been an obligation on my part to have requested a copy once I realized that I did not have it…”. This resulted in a finding that the arbitrator’s reasons were insufficient, which also amounted to an error in law.

September 25, 2024September 27, 2024

Québec – Parties May Agree Upon an Arbitral Appeal Mechanism – #864

In McLaren Automotive Incorporated c. 9727272 Canada Inc (unreported, rendered on August 2, 2024 in File no. 540-17-015649-328), the Superior Court of Quebec confirmed that parties may agree upon an arbitral appeal mechanism, despite article 648 of the Code of Civil Procedure (“CCP”), which states the only recourse against a final award is homologation or annulment. In this case, an arbitration appeal panel appointed by the parties overturned the decision of the arbitrator, in which he denied having jurisdiction over the dispute. The Claimant then applied to the Superior Court of Quebec, requesting the homologation of the arbitrator’s decision and the annulment of the appeal panel’s decision. In this first decision addressing the validity of an arbitral appeal process, the Court confirmed the validity and jurisdiction of the appeal panel and concluded that the existence and the decision of the appeal panel was valid, considering both the relevant articles of the CCP and the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”).

September 13, 2024September 9, 2024

Alberta – Statutory Framework of Arbitral Appeals Clarified – Leave or No Leave? – #862

In Sivitilli v PesoRama Inc, 2024 ABCA 249, a single justice of the Alberta Court of Appeal set out and clarified the statutory framework for appeals to the Court of Appeal arising from challenges to arbitrations made on the basis that: (1) the arbitration agreement is invalid (s. 47 of the Arbitration Act); or (2) that court intervention is needed to prevent unfair or unequal treatment of a party to an arbitration agreement (s. 6(c)). The appeal route to the Court of Appeal for challenges brought pursuant to s. 47 of the Arbitration Act, RSA 2000, c A-43, which includes allegations that the arbitration agreement is invalid, expressly requires leave of the Court of Appeal. The appeal route for challenges to arbitrations made pursuant to s. 6, such as allegations that court intervention is needed to prevent unfair or unequal treatment of a party, are not addressed in the Arbitration Act, and therefore decisions of the first instance court are subject to a general right of appeal under the Alberta Rules of Court. No permission is required to appeal a decision under s. 6.

August 16, 2024August 12, 2024

B.C. – Questions of issue estoppel not always extricable questions of law – #855

In Magnum Management Inc. v Chilliwack Hangar Corp., 2024 BCCA 212 [Magnum Management], the Court dismissed an application for leave to appeal an arbitration award. The applicant sought leave on the basis that the arbitrator had failed to apply, or misapplied, the legal principle of issue estoppel, had misapprehended another arbitrator’s reasons in a prior arbitration involving the same contractual clauses, and had not anchored the award in either party’s submissions. The Court found that the applicant had failed to identify an extricable question of law under s. 59(3) of British Columbia’s Arbitration Act, SBC 2020, c. 2 [“Act”].

July 22, 2024July 25, 2024

B.C. – Insufficiency of Reasons Breached Due Process – #848

In Sound Contracting Ltd. v Campbell River (City), 2024 BCSC 933, the court allowed the set- aside challenge of an arbitral award and remitted the matter to the arbitrator on the basis that the arbitrator had failed in his duty under natural justice to provide adequate reasons. The arbitrator concluded that the arbitration was time-barred but did not explain why he had reached that conclusion. In so doing, the court treated the set-aside challenge as akin to an appeal, where insufficient reasons amount to an error of law. In so doing, the court applied principles in the civil (appeal) and administrative (judicial review) contexts to the set aside of an arbitral award. This stands in contrast to how this issue has been treated internationally, where the matter of whether insufficiency of reasons is a breach of procedural fairness is not well-settled.

July 2, 2024July 2, 2024

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.