Why Canadian Courts Hesitate To Recognize 'True Questions Of Jurisdiction'

Canadian Courts have always been reluctant to intervene in arbitral decisions. Judicial intervention in an arbitration, either by way of a review or an appeal from the arbitral award, undermines the efficiency of the arbitration process. If parties could appeal or apply to set aside every arbitral decision with which they disagree, it would be more cost-effective to litigate their dispute in the Courts. For this reason, judges are usually only willing to intervene in an arbitration where the arbitrator's decision raises a "true question of jurisdiction".

The issue of what constitutes a "true question of jurisdiction" has plagued Canadian jurisprudence for some time. As recently as 2018, the Supreme Court of Canada in Canada (Human Rights Commission v. Canada (AG), 2018 SCC 31, noted that "true questions of jurisdiction" have been on "life support" and that the existence of this category of question has "long been doubted".

A recent decision of the Ontario Superior Court, FCA Canada Inc. v. Reid-Lamontagne, 2019 ONSC 364, affirms that Canadian Courts will be unwilling to identify a true question of jurisdiction so as to intervene in an arbitral dispute and impose a less deferential standard of review to the arbitrator's decision.

The Nature of the Dispute in FCA Canada

FCA Canada involved an application to the Superior Court by a car manufacturer (the "Manufacturer") under section 46 of the Ontario Arbitration Act, 1991, S.O. 1991, c.17 to set aside the decision of an arbitrator made pursuant to the Canadian Motor Vehicle Arbitration Plan ("CAMVAP").

CAMVAP is an alternative dispute resolution process in which disputes between automobile owners and manufacturers are resolved through arbitration. The purpose of CAMVAP is to be an "inexpensive, expeditious alternative to the Courts that does not require consumers to have legal counsel".

In this case, the manufacturer moved to set aside the arbitral decision on the basis that the arbitral award dealt with a decision that the Arbitration Agreement did not cover and that was beyond the Arbitration Agreement's scope.

The dispute arose when the applicant, who purchased her vehicle through an authorized dealer of the manufacturer, experienced a number of problems with the vehicle. She commenced an arbitration under the CAMVAP process. The Arbitration Agreement between the parties provided that the parties could arbitrate disputes relating to "[a]llegations of a current defect in vehicle Assembly or...