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Arbitration - Standard of Review. All Communications Network of Canada v. Planet Energy Corp.
In All Communications Network of Canada v. Planet Energy Corp. (Ont CA, 2023) the Court of Appeal considered the SOR that applies to an appeal allegation that an arbitrator made it such that the appellant was 'unable to present its case', which the court first interpreted as a failure of 'due process' [para 42] and ultimately as a failure of fairness [para 46]. I find the case odd since - if it's truly a matter of 'fairness' - then it should have *no* SOR (which is equivalent to 'correctness'), as opposed to the high deference set out in para 42:[12] Planet brought an application to the Superior Court to set aside the arbitral award on the basis that, among other things, the arbitrator deprived Planet of the opportunity to present its case, and the award to ACN was contrary to public policy because it violated the Energy Consumer Protection Act, 2010, S.O. 2010, c. 8 (“ECPA”). ACN brought a separate application for an order recognizing and enforcing the award.
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1. Standard of Review where a Party Claims it was Unable to Present its Case
[39] The first issue raised on this appeal is the standard of review to be applied to the application judge’s analysis of whether Planet was unable to present its case.
[40] Planet does not challenge the arbitrator’s jurisdiction to hear the case; rather, Planet challenges the arbitrator’s decisions regarding document production, time for cross-examination, and opportunity to prepare closing submissions to the arbitration that Planet claims resulted in its inability to properly present its case at the arbitration.
[41] Planet claims that the application judge was required to conduct a de novo hearing to determine whether Planet was able to present its case, and that he erred by failing “to independently assess the importance of document discovery and the prejudicial effect” of ACN’s failure to comply with its obligations to Planet, and instead, deferred to the arbitrator. Planet claims that, had the application judge conducted a de novo hearing, he would have concluded that Planet was unable to present its case.
[42] The onus on a party seeking to set aside an arbitral award on the basis of a failure of due process, is high. “Judicial intervention for alleged violations of the due process requirements of the Model Law will be warranted only when the Tribunal's conduct is so serious that it cannot be condoned under the law of the enforcing State”: Consolidated Contractors Groups S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2017 ONCA 939, 70 C.L.R. (4th) 51, at para. 65, leave to appeal refused, 2018 CanLII 99661 (SCC), citing Lax J. in Corporacion Transnacional de Inversiones, S.A. de C.V. v. STET International, S.p.A., 1999 CanLII 14819 (ON SC), [1999] O.J. No. 3573, at para. 34 (Sp. Ct.), aff’d (2000) 2000 CanLII 16840 (ON CA), 49 O.R. (3d) 414 (C.A.), leave to appeal refused, [2000] S.C.C.A. No. 581.
[43] The only authority cited by Planet in support of its claim that a de novo hearing should have been conducted by the application judge to determine whether this high threshold has been met, was lululemon athletica Canada inc. v. Industrial Color Productions Inc., 2021 BCCA 428.
[44] In my view, lululemon is distinguishable.
[45] In lululemon, the appellant challenged the jurisdiction of the arbitral decision. Lululemon invoked s. 34(2)(a)(iv) of British Columbia’s legislation which, like the wording in s. 34(2)(a)(iii) of the Ontario Act, concerns “disputes not contemplated by or not falling within the terms of the submission to arbitration: see s. 34(2)(a)(iv) of British Columbia’s International Commercial Arbitration Act, R.S.B.C. 1996, c. 233.
[46] In this case by contrast, the appellant challenges the procedural fairness of the proceeding.
[47] Moreover, as was made clear by this court in United Mexican States v. Cargill, Inc., 2011 ONCA 622, 107 O.R. (3d) 528, at para. 47, leave to appeal refused, [2011] S.C.C.A. No. 528, even in appeals of pure jurisdictional questions,[C]ourts are to be circumspect in their approach to determining whether an error alleged under art. 34(2)(a)(iii) properly falls within that provision and is a true question of jurisdiction. They are obliged to take a narrow view of the extent of any such question. And when they do identify such an issue, they are to carefully limit the issue they address to ensure that they do not, advertently or inadvertently, stray into the merits of the question that was decided by the tribunal. [48] The correct test is whether the arbitrator’s decisions respecting document production, cross-examination of witnesses, and closing submissions, “offend our most basic notions of morality and justice” such that the arbitrator committed a breach of procedural fairness: Consolidated Contractors, at para. 65.
[49] It was incumbent on Planet to demonstrate that it was unable to present its case. In the absence of evidence to demonstrate how the arbitrator erred in making her findings in respect of the documents, and why more time was needed to prepare cross-examinations and make closing submissions, the application judge was entitled to rely on the findings of the arbitrator. Even if a de novo hearing were conducted, as the application judge said, “Planet’s submissions … repeat the same submissions that were made to the Arbitrator”, Planet has not challenged the finding that only eight of the 400 Xoom Documents were relevant, and no new evidence has been adduced to demonstrate how it has been deprived of its ability to present its case. As such, this would not have changed the result.
[50] For these reasons, I find that the application judge applied the correct test and invoked the correct standard of review. I would therefore dismiss this first ground of appeal.
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