Ontario Court Provides A Helpful Primer On Judicial Intervention In Arbitration Awards In Canada

In FCA Canada Inc. v. Reid-Lamontagne, 2019 ONSC 364, Justice Spies of the Ontario Superior Court of Justice provided a helpful overview of the current state of the law in Canada with respect to three core aspects of judicial intervention in an arbitration award: (1) when to challenge the arbitrator's jurisdiction; (2) the standard of review on questions of jurisdiction; and (3) the setting aside of final arbitration awards generally.

While the Court's reasons were issued in the context of an arbitration that proceeded under a domestic arbitration act,1 the principles highlighted by the Court remain relevant to the enforcement, consideration, and setting aside of international arbitration awards in Canadian courts. Indeed, the Court relied directly on Canadian cases considering international arbitration awards in giving its reasons.

Background and Decision

The case concerned an application by FCA to set aside an award of an arbitrator under an arbitration agreement designed to resolve disputes between consumers and major automotive vehicle manufacturers. The controlling arbitration agreement dictated that the decision of the arbitrator was final and binding on both parties, subject to the "very limited rights" for court review under applicable provincial legislation.2

The issues before the court concerned: (a) a preliminary issue relating to whether FCA, as the applicant, was estopped from challenging the jurisdiction of the arbitrator for failing to object to jurisdiction in the arbitration proceedings; (b) whether the arbitrator had jurisdiction to make certain findings in his award; and (c) whether the arbitrator's final award was unreasonable such that it should be set aside.3

The Court made it abundantly clear that in Canadian courts, "arbitrators must be afforded significant deference and that judicial intervention in arbitrations must be very narrow" – "This is not an appeal".4 Ultimately, the Court found that the applicant was estopped from challenging jurisdiction after the merits of the arbitration had been resolved, that the arbitrator did not exceed his jurisdiction in rendering his award, and that the final award was reasonable and should not be set aside.

Takeaways

By way of either express statements, or remarks from which general tenets can be inferred, the Court provided a helpful summary of the various applicable principles when assessing jurisdiction and attempts to set aside an arbitration award by application in Canadian...