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VOL. 79 PART 5 SEPTEMBER 2021
nities to clarify whether the Vavilov standard would apply to arbitration
appeals. In Nolin v. Ramirez,7 the B.C. Court of Appeal was confronted with
the question of whether Vavilov applied to the appeal of an arbitral award
(in the context of family arbitration) that was made pursuant to the
province’s former Arbitration Act.8 The Court of Appeal declined to opine on
the applicability of Vavilov, stating that it made no difference in the case
before it, since the result would be the same regardless of whether the standard
of review was reasonableness or palpable and overriding error.9 Similarly,
in Travelers Insurance Company of Canada v. CAA Insurance
Company,10 the Ontario Court of Appeal held that it did not need to decide
the question because the standard of correctness always applied to the constitutional,
jurisdictional and exceptional issues raised in that matter.
At present, Northland Utilities (NWT) Limited v. Hay River (Town of), which
was released shortly before Wastech, is the only appellate level authority on
whether Vavilov applies to commercial arbitration.11 In Northland, the Court
of Appeal for the Northwest Territories found that Vavilov did apply to commercial
arbitration under the Arbitration Act.12 Prior to Northland, the superior
courts had split on whether the Vavilov framework should apply to
private arbitration, with the main argument against being that following
Vavilov would represent an anomaly in how Canadian courts typically apply
the doctrine of stare decisis.
Although the reasoning in Northland was echoed by the minority of the
Supreme Court of Canada in Wastech, the majority’s clear reluctance to
decide the issue without the benefit of full submissions and the assistance
of reasons on point from the courts below may limit Northland’s application
in other jurisdictions.13 Further, the arbitration in Northland arose out of circumstances
that are unlikely to be present in most commercial disputes.
Specifically, the contract (a public utility agreement) provided for arbitration
and the Cities, Towns and Villages Act14 stipulated that this particular
type of dispute be determined by sole arbitrator under the Arbitration Act.
The current uncertainty will likely need to be addressed further by the
Supreme Court of Canada. Until then, given the importance of alternative
dispute resolution mechanisms in modern commercial practice, a clear
understanding of how Vavilov potentially impacts private arbitration, or at
least an understanding of how courts are dealing with the issue, is important
so that parties can properly assess risk.
The majority’s decision in Vavilov addressed a growing concern among
practitioners of administrative law about the complexity of the standard of