Appealing An Arbitral Award ' Are We "Finally Settled"?

• Law Firm: McCarthy Tétrault LLP
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Author: The International Arbitration Blog, Eli Mogil and Sherry Ghaly
• Published date: 10 May 2023

Why this case matters

This is but the most recent case addressing the circumstances under which an arbitration award can be appealed. For a number of years, parties have disputed the significance of words like "binding" and "final" when seeking to determine whether an award can be appealed. In this recent Ontario Court of Appeal ("ONCA") decision, the Court brings some much needed common sense to those words.

In Baffinland Iron Mines LP v. Tower-EBC G.P., S.E.N.C, 2023 ONCA 245 ("Baffinland"), the ONCA upheld the Ontario Superior Court's ("ONSC") decision that leave to appeal an arbitral award was unavailable to Baffinland Iron Mines ("BIM" or the "Appellants") under s. 45(1) of the Arbitration Act, S.O 1991, c. 17 (the "Act"), as the Court found that the phrases "finally settled" and "final and binding" meant the same thing and, in both cases, the parties intended to preclude appeal rights following an arbitration.

The Background

The dispute giving rise to the arbitration award at issue arose from BIM's 2018 termination of two contracts (the "Contracts") entered into with Tower-EBC G.P./S.E.N.C. ("TEBC" or the "Respondents").

TEBC commenced the arbitration in 2018, challenging BIM's right to terminate the contracts and claiming damages arising from the termination.¹ The arbitral tribunal unanimously found that BIM had wrongfully terminated the Contracts and awarded TEBC damages exceeding $70 million (the "Award").²

BIM Seeks Leave to Appeal the Arbitral Award – The ONSC Decision

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BIM sought leave to appeal the tribunal Award, arguing that the tribunal committed errors of law. The ONSC denied leave, finding that the parties' arbitration agreement precluded appeals on questions of law.³ In particular, the Court found that the reference in the arbitration agreements to disputes being "finally settled" through arbitration, as well incorporation into the arbitration agreements of International Chamber of Commerce ("ICC") Rule 35(6) – which binds the parties to their arbitral award and denies them any form of recourse – rendered leave to appeal the Award unavailable under s. 45(1) of the Act.⁴

The application judge rejected BIM's argument that the use of the phrase "final and binding" in relation to decisions by the Dispute Adjudication Board (the "DAB") – words recognized by Ontario courts to preclude arbitral appeals – when compared to the phrase "finally settled" in relation to arbitrations, meant that the parties...