Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Arbitrator Exceeds Jurisdiction Post Award and British Columbia Court of Appeal Throws Out Award

A recent British Columbia Court of Appeal decision (issued on January 25, 2010)allows a defeated party in an arbitration to start over. In Westnav Container Services Ltd. v. Freeport Properties Ltd. (2010 BCCA 33), the British Columbia Court of Appeal set aside an arbitral award because they felt the arbitrator went to far post award and the arbitrator's "clarifications" were actually additional reasons for the arbitral decision. It is important to note that the Supreme Court of British Columbia dismissed a petition to quash the award, and that dismissal is appealed to the British Columbia Court of Appeal. Needless to say, the lawyers for Westnav (the party seeking a review of the arbitrator's actions) were determined.

The issue before the British Columbia Court of Appeal was the jurisdiction of an arbitrator to issue a corrected award. The arbitrator's corrected award confirmed the original decision while deleting portions of the award that discussed an erroneous fact and supplementing the discussion of the basis of the award.

The Court held that an arbitrator does not have powers to issue an alteration that appears to change either the arbitrator’s thought process or the basis of the award.

The BCCA made it clear that the issue was NOT the integrity of the arbitrator:

"As I earlier stated, the issue is not one of the integrity of the arbitrator. I recognize in this unfortunate situation the arbitrator has sought to rescue the arbitration process through his correction ruling. However, and with respect, I have come to the view that in doing so he has stepped outside his jurisdiction. The matter is one of the integrity of the arbitration process. Viewed objectively one may ask whether an objective bystander, reading these awards, could have confidence in the outcome in light of the arbitrator’s silence in the corrected award on the effect of the Ewen property as a comparable on his analysis, given its prominence in the analysis in the original award. I conclude the answer is in the negative. I consider an objective review of the award reveals a correction in reasoning through exclusion from the reasons of a factor previously considered material, creating objectively an impression the corrected award was an alternate explanation for the result rather than clarification of the original reasoning."

Please got to the following link to obtain a copy of the BCCA decision in Westnav Container Services Ltd. v. Freeport Properties Ltd. - http://www.canlii.com/en/bc/bcca/doc/2010/2010bcca33/2010bcca33.pdf

 

 

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