ONTARIO – Arbitrator’s denial of a party’s attempt to substantially reframe its case by a last-minute pleading amendment was not a denial of justice or fairness.
Dua vs BGD LLP et al.
2021 ONSC 4435 (CanLII)
Gilmore, C, J., June 9, 2021
Dua and Grover, were partners pursuant to a written Partnership Agreement (“Agreement”) which created BGD (“Partnership”). They agreed to waive their rights to dissolve the Partnership and agreed that all disputes would be resolved by final and binding arbitration with no right of appeal.
The parties agreed that Arbitrator that the Partnership would not be a party to the arbitration but would be bound by the decision.
After the exchange of pleadings, documents, affidavits, and memorials, Dua moved to amend pleadings to assert a new claim that the Partnership had no right to claim against him and that all claims would be dealt with in an accounting after dissolution. The motion was dismissed on the basis that the new claim was inconsistent with Dua’s earlier admission that the Partnership had standing to claim against him and that the relief was requested too late in the process.
The Arbitrator held that Dua had withdrawn from the Partnership, was the defaulting partner and ordered Dua to pay damages and costs to the Partnership.
Dua applied to set aside the award on the basis he was denied the opportunity to present his case and respond to the case against him and that the Arbitrator erred in applying common law principles as to partnership law.
Section 46(1) of the Arbitration Act, 1991 S.O.1991, c.17, provides that a court can set aside an award where a party was not treated fairly or was not given an opportunity to present a case or respond to a case. The Court held that Dua’s claims as to procedural fairness and natural justice were really complaints about the Arbitrator’s substantive decision. The application judge referre to Chadeesingh v Flores (2020 ONSC 5534 para.18) for authority that the standard of review on a section 46 application where the complaints are really about the substance of the decision is a “deferential standard of reasonableness and not the standard of correctness.”
The Court found the award was reasonable, that there was no denial of justice and confirmed that the standard of review for commercial arbitration is one of reasonableness and dismissed the application.