ONTARIO – Where an Arbitrator failed to provide adequate reasons for the award, the Superior Court set aside the Award pursuant to s. 38(1) of the Arbitration Act, 1991 and directed that a new arbitration proceed before another arbitrator.

Alberta Cricket Association (“Association”) v.
Alberta Cricket Council et.al. (“Council”)
2021 ONSC 8451
Perell,J., December 23, 2021

The Applicant Association sought to set aside an arbitral award and supplemental award made by an Arbitrator on the roster of the Sport Dispute Resolution Centre of Canada (“SDRC”) on the basis that the arbitrator did not state reasons in the award why she concluded that the Council and not the Association had effective control of organized  competitive cricket in Alberta: para.5 and 53.

Perell J. held that the Arbitrator’s written reasons were inadequate and did not provide an explanation for her award.

Facts

The Arbitrator’s award declared that the Council has demonstrated “effective control” of organized competitive cricket within the province of Alberta and should therefore be considered a member of Cricket Canada with voting privileges at any meeting of the members. The Arbitrator also awarded the Council “PSO” (“Provincial Sport Organization”) status for cricket in Alberta. In a supplementary award, the Arbitrator clarified that the Council had replaced the Association as the member of Cricket Canada and the Association was no longer a PSO for Alberta: para.2.

The SDRC has jurisdiction to resolve certain sports related disputes pursuant to the Federal Activity & Sports Act, S.C. 2003, c.2, s.10 pursuant to the Ontario Arbitration Act, 1991 (“Act”) and the SDRC’s Code. The members of Cricket Canada must have effective control of organized competitive cricket within the province

The Council sought membership in Cricket Canada. As Cricket Canada did not make decision on Council’s membership application, Council filed a request with SDRC to review the application. SDRC assumed jurisdiction and added Association as an “affected party”. The parties decided to proceed by arbitration through SDRC and agreed on the selection of the arbitrator: para.14.

The Arbitrator made a first interim award confirming SDRC’s jurisdiction over the dispute. Cricket Canada appealed the arbitrator’s decision on jurisdiction on the basis that the dispute was not “sports related” pursuant to section 17(8) of the Act. Justice Koehnen (OSCJ) dismissed the appeal and held that SDRC had jurisdiction to determine whether or not an organization should be a member of Cricket Canada as the dispute “affected participation of a person in a sport program or organization”: para. 23.

The arbitrator made a second interim award ordering an investigation and a report to determine who has effective control of cricket in Alberta and to examine the allegations regarding Association. The purpose of the investigation was to avoid a long arbitration. An investigator was appointed, and a report prepared indicating that Association’s representation was not fully inclusive of all interests in the province and therefore not effective. The Arbitrator shared the report with the parties with a letter in which the arbitrator expressed that it was her “sincere hope that the parties can come to a mutually agreeable resolution in this case’.: para.24.

The Association then brought an application to have the Arbitrator removed based upon a reasonable apprehension of bias. The application was dismissed: para.31.

The Arbitrator made a third interim award setting out how the arbitration should be decided, which included directing Cricket Canada to appoint a three-member Review Panel to consider submissions on the issue of “effective control”. The Review Panel reviewed written and oral submissions and issued a decision finding that Association had effective control of cricket in the province.

Council requested the Arbitrator reconsider the Review Panel decision. The Arbitrator issued a final award in which she rejected the decision of the Review Panel. The Arbitrator held that the Council has “effective control” of cricket in Alberta, as defined in Cricket Canada’s by-laws. The Arbitrator stated in the final award that it is time for fresh leadership in the sport in Alberta:para.32.

Cricket Canada sought a clarification in the final award and the Arbitrator made a supplemental award stating that the Association is stripped of its Provincial Sports Organization (PSO) status in Alberta and that Council replaces Association as the member or PSO for Alberta.:para.41.

Standard of Review

Perell J. held that the failure to provide reasons was an error of law for which the standard of review is correctness and was therefore, a basis to set aside the award under ss. 46(1)(3) and 46(1)(6) of the Act: para.7.

Award Writing

The arbitrator had to decide who had effective control over cricket in the province of Alberta. The Arbitrator answered the question, Council had effective control. Reasons for the decision were required under s. 38(1) of the Act. Perell, J. held that the Arbitrator failed to explain how she applied the effective control criteria set out in her interim order. Therefore, Perell J. held that the Arbitrator’s written reasons were inadequate.

Perell J’s explanation for the importance of written reasons of an arbitration award at para. 55 can be summarized as follows:

• Written reasons show the parties that the adjudicator has paid attention to their arguments and treated them fairly and with due process.
• Providing reasons for a decision removes the appearance of arbitrariness, makes the process transparent, and makes the decision-maker accountable because he or she is called on to explain and justify the decision.
• The question of the adequacy of reasons for decision is whether the reasons, viewed in light of the record and counsel’s submissions on the live issues presented by the case, explain why the decision was reached, by establishing a logical connection between the evidence and the law on the one hand, and the decision on the other.
• The critical question is whether in the context of the record, the issues and the submissions of the parties, the judgment is sufficiently intelligible to show that the adjudicator understood the substance.

As a result, the Court held, failure to provide written reasons where required under the Act s. 38(1) renders the decision void. The award was set aside and a new arbitration was ordered with a new arbitrator.

Editor’s Comment

The failure to provide written reasons violates section 38(1) of the Act. Section 6(1) of the Act allows court intervention to assist the conducting of arbitrations. In addition, pursuant to section 46 (1)(7),of the Act a court may set aside an award if the arbitration procedures did not comply with the Act.

Alexander M. Gay, co-author of the Annotated Ontario Arbitration Legislation- Arbitration Act, 1991 and International Commercial Arbitration Act, 2017, 3rd edition states, “when the award must be in writing, it must at a minimum, provide some insight into how the legal conclusion was reached and what facts were relied upon reaching that conclusion at page 284. (R. v. Sheppard 2002 SCC 26 para. 24).

The standard to which a tribunal is required to provide reasons is open to some debate. In one case the court rejected the idea that there is one standard for judges and arbitrators. For example, Murphy v. Murphy, 2015 ONCA 69, para.11,where the Court of Appeal held that the judge applied the wrong test to the arbitrator’s award.

Also of interest in respect of this case, is the case Palmieri v. Alaimo, 2015 ONSC 4336, para.81, where the court refused to set aside an arbitral award that lacked reasons, where it was clear to the court that the award was based on a report that could easily be referred in the award. Instead of setting aside the arbitral award, the court directed the arbitrator to prepare and issue an award which stated the reasons on which it is based.