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Bias in Adjudicators - Remedies. Vento Motorcycles, Inc. v. Mexico
In Vento Motorcycles, Inc. v. Mexico (Ont CA, 2025) the Ontario Court of Appeal allowed an appeal, this from a Chapter 11 decision by a three-arbitrator NAFTA tribunal, here against Mexico.
Here the court considers it's consequential response to a finding of bias, what it refers to as it's remedy:Remedying a breach of procedural fairness
[29] The common law has historically been strict in response to a breach of procedural rights. A failure to provide a fair hearing has resulted in the quashing of the substantive decision, regardless of the result that might otherwise have obtained. It has never been necessary for an applicant seeking relief to establish that the outcome of the relevant decision would – or even might – have been different but for the unfair hearing procedure. Procedural fairness is “an independent, unqualified right” rooted “in the sense of procedural justice which any person affected by an administrative decision is entitled to have”; courts may not “deny that right and sense of justice on the basis of speculation as to what the result might have been”: Cardinal v. Director of Kent Institution, 1985 CanLII 23 (SCC), [1985] 2 S.C.R. 643, at p. 661.
[30] Exceptions are rare and demonstrate the strength of the rule. Courts will sustain decisions marred by procedural errors only in highly unusual circumstances. For example, in Mobil Oil Canada Ltd. v. Canada-Newfoundland Offshore Petroleum Board, 1994 CanLII 114 (SCC), [1994] 1 S.C.R. 202, the Supreme Court held that Mobil Oil had established a breach of procedural fairness but declined to quash the decision at issue because its disposition of the legal question before it guaranteed that Mobil Oil would be unsuccessful on a rehearing. The court emphasized that “the apparent futility of a remedy will not bar its recognition” but explained that circumstances are different when the answer to a legal question is inevitable: Mobil Oil, at p. 228 (emphasis added).
[31] The rule against bias is stricter still. No matter what gives rise to a reasonable apprehension of bias, once the finding is made the adjudicator is disqualified. If a decision has already been reached, the decision is void. As Cory J. explained on behalf of a unanimous Supreme Court of Canada, “it is impossible to have a fair hearing or to have procedural fairness if a reasonable apprehension of bias has been established”. Moreover, “[t]he damage created by apprehension of bias cannot be remedied. The hearing, and any subsequent order resulting from it, is void”: Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), 1992 CanLII 84 (SCC), [1992] 1 S.C.R. 623, at p. 645. This principle has been reaffirmed by this court. See, e.g., Canadian College of Business and Computers Inc. v. Ontario (Private Career Colleges), 2010 ONCA 856, 272 O.A.C. 177, at para. 64.
[32] This approach reinforces the seriousness of an apparent failure of impartiality. No one whose rights, interests, or privileges are at stake can be required to accept a decision made by an adjudicator whose ability to decide fairly is – for whatever reason – reasonably in doubt. The importance of the rule against bias transcends the interests of the parties to a particular dispute: bias is intolerable in any system that aspires to the rule of law. The finding of a reasonable apprehension of bias requires the disqualification of an adjudicator and the nullification of any decision they have made. Nothing less will do.
[33] Of course, courts have the inherent authority to control their own processes and to protect them from abuse. They may refuse to entertain an allegation of bias if, for example, the applicant for relief has not acted conscientiously by raising the bias allegation at the earliest opportunity. In these circumstances the court may find that the applicant has waived the protection of the rule against bias by raising it for tactical purposes. But the common law does not establish a discretion to refuse to remedy a reasonable apprehension of bias because the finding is for some reason not considered sufficiently serious, or because it would be somehow inconvenient to provide the required remedy. A finding of a reasonable apprehension of bias is necessarily serious and must be made in the knowledge of the result that follows: the adjudicator is disqualified and the substantive decision is void.
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