The Supreme Court Of Canada Declines To Clean Up Confusion On The Standard Of Review Of Arbitral Decisions

• Published date: 18 February 2021
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Constitutional & Administrative Law, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Fasken
• Author: Ms Tracey Cohen, Sarah J. Armstrong, Chantal Leblanc, Karen Wyke and Christian Leblanc

Introduction

The standards of review for courts on appeal or review of lower court and administrative decision-makers have been the subject of a huge amount of commentary and controversy. In Vavilov v. The Queen, the Supreme Court recently sought to clarify the standard of review in administrative law cases. There have been other decisions concerning the standard of review concerning appeals from arbitration awards on questions of law and decisions that determined what constitutes a question of law in proceedings concerning the interpretation of a contract.

These issues may now be breaking in a different direction. Three of the nine judges in the recent decision of Wastech v. Metro Vancouver, in an appeal where the arbitration award had been set aside, would have found that the review of a question of law in an arbitral decision should be reviewed on the basis of correctness and not reasonableness.

This suggests that further decisions may-or may not-clarify this important question.

Arbitration Awards Entitled to Deference on Questions of Law?

Although the Arbitration Act, SBC 2020, c.2, s.59, gives a right to seek leave to appeal on any question of law, the issues of what is a question of law and the proper standard of review of a question of law have both proved vexing.

Arbitrators very commonly are required to determine the meaning of contractual terms. So, the question of whether this raises an issue of law or not is critical.

This question appeared to be resolved in 2014. In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the Court ruled that contractual interpretation was no longer a question of law. Since contractual interpretation involves issues of mixed fact and law it is an exercise of interpreting the words in their factual context. Parties may identify an "extricable" legal error from a judge's contractual interpretation, though these would be admittedly rare. The Court further ruled that any issue of law should be reviewed on a reasonableness standard. This reasonableness standard had at that point been typically applied to decisions of administrative tribunals. The Court ruled that the arbitral context was sufficiently similar to import that standard of review. In 2017, the Supreme Court in Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 applied and affirmed the approach in Sattva. As a result of these decisions, arbitral appeals became arguably more difficult to mount: see e.g. Richmont Mines Inc. v. Teck Resources...