Ontario Court Of Appeal Provides Clarity Regarding Appeals Of Domestic Arbitral Awards

• Author: Mr Artem Barsukov, Vasilis Pappas and David Wahl
• Law Firm: Bennett Jones LLP
• Published date: 03 May 2023

Commercial arbitration is widely perceived as a pathway to obtaining a final and binding decision (styled as an "award") that is not subject to appeal. However, this is not always the case in Canada. The degree of finality of the award may vary considerably depending on whether the dispute is international or domestic in nature and the province in which the seat of arbitration is located.

International commercial awards issued in Canada are governed by the International Commercial Arbitration Acts of various provinces, which are generally identical and which follow the UNCITRAL Model Law on International Commercial Arbitration. Under these acts, an international commercial award is not subject to an appeal on the merits, but can only be "set aside" on a very limited number of narrow grounds, all of which go to whether there exist circumstances where there was a fundamental defect in the manner in which the arbitration was undertaken. These grounds are:

1. invalidity of arbitration agreement or lack of capacity to enter into the arbitration agreement;
2. lack of proper notice or other inability to present one's case;
3. the tribunal exceeding its jurisdiction;
4. failure to conduct the arbitration in accordance with the arbitration agreement;
5. lack of arbitrability; and
6. conflict with public policy.

By contrast, domestic awards issued in Canada are not only subject to set-aside on similar grounds, but may also be appealed on their merits in some instances. To further confound matters, the default rules and the scope of appeal rights vary somewhat between each province's Arbitration Act, and are not always intuitive. In the case of Ontario, Section 45 of the

Arbitration Act, 1991, SO 1991, c 17 [Arbitration Act] provides as follows:

Appeal

Appeal on question of law

45 (1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,

(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and

(b) determination of the question of law at issue will significantly affect the rights of the parties.

Idem

(2) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law.

Appeal on question of fact or mixed fact and law

(3) If the arbitration agreement so provides, a party may appeal an award to the court on a question of fact or on a question of mixed fact and law.

Section 49 of the Ontario Arbitration Act further provides that a decision of the Superior Court of Justice on an...