Ontario – Set- aside application failed; dispute covered by arbitration agreement, no objection to jurisdiction – #616

In Baffinland v Tower-EBC, 2022 ONSC 1900, Justice Pattillo dismissed both: (1) an application to set aside an award from a majority of an arbitral tribunal (the “Majority Award”) under section 46 of the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Act”); and (2) an application for an order granting leave to appeal the Majority Award and Costs Award under section 45(1) of the Act. Justice Pattillo found there were no grounds upon which to set aside the Majority Award; there was no lack of jurisdiction or failure to be treated equally and fairly. Nor could leave to appeal be granted under section 45(1) of the Act because the arbitration agreement precluded an appeal.

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British Columbia – Court sets aside arbitrator’s decision for breach of procedural fairness – #615

In Bedwell Bay Construction v. Ball, 2022 BCSC 559, Justice Giaschi granted a judicial review application to set aside an interim decision of an arbitrator (the “Arbitrator”) of the Residential Tenancy Branch (the “RTB”) and to remit the matter back to the RTB for redetermination de novo before a different arbitrator. In doing so, the Court accepted the petitioner’s argument that the arbitrator did not act fairly when it required the petitioner to present its case first (even though it did not have the burden of proof), and denied it the right to cross-examine and to provide reply evidence and submissions. The Court held that this amounted to breaches of the rules of natural justice and procedural fairness. These findings have relevance to commercial arbitrations.

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Ontario – Determining appeal rights in arbitration agreement in effect since 1960 Arbitration Act – #614

In D Lands Inc. v KS Victoria and King, 2022 ONSC 1029, Justice Dietrich granted the Landlord leave to appeal the tribunal Majority’s award in a rent reset arbitration, but ultimately dismissed the appeal and the Landlord’s application to set aside the Majority’s award on jurisdictional grounds. Her reasons summarize the legal principles to be applied to determine whether the parties agreed to a right of appeal and, in particular: (1) the effect of an arbitration agreement when it spans a period of time in which more than one piece of arbitration legislation governed that provided for different rights of appeal; and (2) as a matter of contract interpretation, the language necessary for the parties to contract out of rights of appeal. Here, the parties’ agreement was entered into in 1968 and the arbitration legislation in Ontario changed since then from an “opt in” regime to an “opt out” regime. However, the parties provided in their arbitration clause that any arbitration was to be conducted under the ICDR Rules, which were silent on appeal rights. Therefore, it was necessary for Justice Dietrich to interpret the contract as a whole to determine the parties’ intentions. The words in the arbitration agreement that the tribunal’s award “is conclusive on the parties” and that judgment may be entered in any court having jurisdiction were not sufficiently clear to express an intention to contract out of a right to appeal.

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Ontario – Arbitrators can decide non-legal business disputes, but not in this case – #608

The case 1107051 Ontario Ltd. v. GG Kingspa Enterprises Limited Partnership, 2022 ONSC 1847 concerned the jurisdiction of an arbitrator to decide a business dispute that was not legal in nature. The Applicant, 1107051 Ontario Ltd. (“110”), applied to “set aside” a decision of an arbitrator to assume jurisdiction over a dispute about whether a major real estate development project at King Street West and Spadina Avenue in Toronto (the “Project”) should include a hotel component when the parties were deadlocked on the issue. Section 17(8) of the Ontario Arbitration Act allows a party to apply to the Court to “decide” a jurisdictional issue if, as here, an arbitrator decides it as a preliminary question, as opposed to with the merits. Justice McEwen granted the “set aside”. He agreed with the arbitrator that the dispute was of a business nature and not legal and, further, that parties could arbitrate such non-justiciable disputes if they clearly and specifically intended to do so. In this case, although the arbitration clause was described as broad, the dispute was beyond its scope because the dispute was required by the clause to arise “under this Agreement”. That meant the dispute had to be about more than just anything to do with the Project. It had to concern the rights and obligations of the parties under the Agreement. Although a hotel was contemplated as part of the Project, it was not a required component. Further, express authorization to determine a business issue would have been necessary.

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Québec – Annulment: no review of the merits, even if award wrong – #603

In Balabanian v. Paradis, 2022 QCCS 959, Justice Harvie reaffirmed clearly 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. This judgment is one of many in a saga involving opposing co-owners regarding the management and maintenance of their property. The co-ownership contract included an arbitration agreement. A group of co-owners alleged a lack of transparency and equity by Balabanian in the management and maintenance of the property. The dispute against Balabanian resulted in two arbitrations and court proceedings, taking place in parallel. Justice Harvie’s decision concerned the second arbitration process. The group of co-owners sought the homologation of the second arbitral award, while Balabanian asked for its annulment. Balabanian contested the award for numerous reasons, including: the arbitrator’s appointment because of his lack of independence and neutrality, the lack of jurisdiction of the arbitrator, the award going beyond the scope of the arbitration agreement, the violation of the fundamental right to be heard and, more generally, the merits of the award itself. Justice Harvie dismissed every argument made by Balabanian against the award, reaffirming the strict scope of analysis of homologation/annulment grounds according to sections 645 and 646 CCP.

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Ontario – Standard of review: set aside for applicant’s “inability to present his case” – #596

In Nelson v The Government of the United Mexican States, 2022 ONSC 1193, Justice Penny dismissed Nelson’s application to set aside the award of a three-member tribunal constituted under Chapter 11 of the North American Free Trade Agreement (“NAFTA”). Nelson relied upon Article 34(2)(a)(ii) of the Model Law, which allows the court to set aside an award on the basis that the applicant was, “otherwise unable to present his case”. Justice Penny relied upon the Ontario Court of Appeal’s decision of Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, at para. 65, leave to appeal refused, 2018 CarswellOnt 17927 (S.C.C), which held that the standard of review for setting aside an award under Article 34(2)(a)(ii) is whether the tribunal’s conduct is “sufficiently serious to offend our most basic notions of morality and justice” and “that it cannot be condoned under the law of the enforcing State”.

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