Case information

Arbitration — Arbitration Award — Appeal — Jurisdiction — Powers and jurisdiction of arbitrator — Standard of Review — In determining whether an arbitrator exceeded his jurisdiction or decided a matter that is beyond the scope of the parties’ agreement, should a reviewing court consider the arbitration clause in isolation, or in light of the agreement as a whole? — Whether an arbitrator’s decision on jurisdiction is reviewable on a correctness or reasonableness standard — Arbitration Act, 1991, S.O. 1991, c. 17, s. 46(1)3.

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The parties agreed to arbitrate a contractual dispute under the Arbitration Act, 1991, S.O. 1991, c.17, and agreed that no appeal would lie to the courts from the arbitral award. The arbitrator concluded that the applicant had unlawfully terminated its contract with the respondent and awarded the respondent approximately $12M in damages. The applicant applied to the Ontario Superior Court of Justice to set aside the arbitrator’s award pursuant to s. 46(1)3 of the Arbitration Act, 1991, arguing that it was made in excess of the arbitrator’s jurisdiction. The Ontario Superior Court of Justice held that the arbitrator’s determination that he could award damages for loss of profits was unreasonable and set aside the award. The Ontario Court of Appeal held that the lower court erred in conducting a review of the substance of the arbitrator’s award when s. 46(1)3 of the Arbitration Act, 1991 allows only for limited review for jurisdictional error. The appeal was allowed and the arbitrator’s award reinstated.