set aside Archives - Arbitration Matters

September 27, 2024September 27, 2024

Ontario – Alleged error in applying the law not a jurisdiction issue – #865

In Clayton v. Canada (Attorney General), 2024 ONCA 581, the Court dismissed an appeal from an order dismissing an application to set aside an arbitral award made under Chapter 11 of NAFTA (“the Award”). The appellants sought to set aside the award on the grounds that the tribunal exceeded its jurisdiction and that the award violated public policy. The Court rejected both arguments. In the underlying arbitration, which was bifurcated into liability and damages hearings, the tribunal found that the respondent had breached the relevant NAFTA provisions, but that the appellants did not establish that the breach caused the damages sought. The appellants applied to the Ontario Superior Court to set aside the Award, arguing that the tribunal exceeded its jurisdiction by not properly applying the law, and that the Award violated public policy because it was “so unreasonable as to be unenforceable”. The Superior Court dismissed the application. The Court of Appeal dismissed the appeal. Challenges to arbitral awards on jurisdictional grounds are restricted to “true jurisdictional questions”, and there is a very high burden to set aside an award for public policy reasons.

August 27, 2024September 20, 2024

International – Award set aside after eulogy reveals friendship between tribunal president and counsel – #856

In Port Autonome de Douala v. Douala International Terminal Co. (original French, my translation), the French Court of Cassation (France’s Supreme Court) upheld the Paris Court of Appeal’s decision (original French, my translation) to set aside an arbitral award rendered by a three-arbitrator tribunal based on doubts as to the impartiality of the presiding arbitrator. Those doubts arose from a eulogy he gave of the lead counsel for one of the parties, which revealed that they were close personal friends and that the presiding arbitrator consulted that counsel “before making any important decision”.

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.