The purpose of this bulletin, the eleventh in our “Dispute Resolution Clauses – Two Minute Drafting Tips” series, is to provide parties involved in negotiating commercial agreements with quick, actionable tips for crafting effective dispute resolution clauses. This bulletin explains how the choice of the place or seat of arbitration can affect your appeal rights. It provides simple strategies that parties negotiating commercial agreements can consider to promote finality or, conversely, maximize appeal rights.
Parties negotiating commercial agreements that include an arbitration clause should be cognizant that appeal rights differ from jurisdiction to jurisdiction, and depend on whether an arbitration is domestic or international in nature. This brief bulletin highlights differences among British Columbia, Alberta, Ontario and Québec. It identifies choices that parties desiring finality can make at the contract negotiation stage to restrict rights of appeal, and vice versa.
International Arbitrations: British Columbia, Alberta, Ontario and Québec Preclude Appeals
In these four jurisdictions, rights of appeal depend on whether an arbitration is international or domestic. Arbitral legislation defines when a dispute is international. Appeals to court are not permitted from international arbitral awards seated in any of these jurisdictions. Court involvement is confined to applications to set aside an award on limited grounds (e.g., procedural unfairness, public policy).
Domestic Arbitrations: Appeal Rights Vary Among Jurisdictions
Appeal rights vary among the four jurisdictions when it comes to domestic arbitrations. Québec is the most restrictive, while the other jurisdictions allow parties to shape rights of appeal in certain respects.
British Columbia
Under British Columbia’s Arbitration Act, SBC 2020, c 2, s. 59:
- Parties may appeal a domestic award to the British Columbia Court of Appeal on a question of law:
- as of right, if the parties consent; or
- with leave of the court, if the agreement does not expressly preclude it (leave may be granted if the importance of the result to the parties justifies intervention of the court and the determination may prevent a miscarriage of justice, the point of law is of importance to a class or body of persons of which the applicant is a member, or the point of law is of general or public importance).
- Parties can contractually preclude appeals on legal questions, but it must be explicit.
- No appeals are permitted on questions of fact or mixed fact and law.
Alberta
Under Alberta’s Arbitration Act, RSA 2000, c A 43:
- Appeals on questions of law may proceed:
- as of right, if provided for in the arbitration agreement; or
- with leave of the court, if the agreement is silent (leave is to be granted only if the arbitration is important to the parties and the legal question significantly affects the parties’ rights).
- There is an exception to the above, which courts have interpreted as precluding an appeal of a discrete question of law that the parties specifically posed to the arbitrator.
- Unlike British Columbia, Alberta also permits appeals on questions of fact or mixed fact and law, but only if the arbitration agreement expressly provides for them.
Ontario
Ontario’s Arbitration Act, 1991, SO 1991, c. 17 aligns closely with Alberta’s model:
- Appeals on questions of law may proceed:
- as of right, if provided for in the arbitration agreement; or
- with leave of the court, if the agreement is silent (leave is to be granted only if the arbitration is important to the parties and the legal question significantly affects the parties’ rights).
- Parties can contractually preclude appeals, but it must be explicit.
- Unlike British Columbia, Ontario also permits appeals on questions of fact or mixed fact and law, but only if the arbitration agreement expressly provides for them.
Québec
Québec represents a clear outlier. Under the Code of Civil Procedure, Article 648, there is no right of appeal from a domestic arbitral award on any ground.
Ways for Commercial Parties to Promote Finality or Preserve Rights of Appeal
When it comes to domestic arbitration:
- Parties placing a high priority on finality could consider either
- designating British Columbia or Ontario as the place of arbitration, and explicitly contracting out of rights of appeal; or
- designating a location in Québec as the place or seat of arbitration.
- Parties wishing to maximize rights of appeal could consider specifying British Columbia, Alberta or Ontario as the seat/place of arbitration and explicitly providing for appeals as of right on issues of law (or even issues of mixed fact and law and issues of fact in Ontario and Alberta).
Since international arbitration awards are not subject to appeal to courts in these jurisdictions, parties for whom appellate oversight is important could include provisions for appellate arbitration (i.e., an arbitration tribunal hears appeals). Arbitration rules of various institutions often provide options for such mechanisms, which could be incorporated by reference.
In Case You Missed It
For more insights, check out our previous bulletins in the "Dispute Resolution Clauses - Two Minute Drafting Tips" series:
- Bulletin #1 - Using Model Arbitration Clauses and “Administered” Arbitrations
- Bulletin #2 - Addressing Panel Size and Arbitrator Qualifications
- Bulletin #3 - Mandating Arbitration and Clarity of Scope
- Bulletin #4 - Establishing Clear Procedures for the Appointment of Arbitrators
- Bulletin #5 - The Importance of Considering Emergency Measures in Dispute Resolution Clauses
- Bulletin #6 - When Should Your Contract Contemplate Expedited Arbitration Procedures
- Bulletin #7 - The Pros and Cons of Multi-Tiered/Escalating Dispute Resolution Clauses
- Bulletin #8 - The “Governing Law” of a Contract is Distinct from the Procedural Law of an Arbitration
- Bulletin #9 - Attorning to Court Jurisdiction Doesn’t Mix Well with an Arbitration Clause
- Bulletin #10 - Addressing the Potential for Non-Parties to be Involved in a Dispute
