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Case #083M – Orion Travel Insurance Co. v. CMN Global Inc. 2023 ONSC 1527
May 2, 2023

ONTARIO – Arbitration – Right to Be Heard – Where the parties were afforded equal opportunities to present their cases, and data relied on by an expert was relied on by both parties in their submissions despite not being marked as an exhibit, the right to be heard was satisfied.

ONTARIO – Arbitrator’s Jurisdiction – Failure to Mediate – Mediation is not an obligatory step in an arbitration process unless the arbitration agreement makes it one. A failure to mediate is only a procedural defect when the parties’ agreement to arbitrate demonstrates that they intended all issues to be mediated.

ONTARIO – Sufficiency of Arbitrator’s Reasons – The court applies a functional test to determine whether an arbitrator’s reasons are sufficient. The question is whether the reasons express enough to inform the parties of why the decision was made. Citing portions of one of the parties’ submissions is an accepted part of the judgment-writing process. It does not render the proceeding unfair without more to indicate that the arbitrator did not turn their mind to the issues.

Orion Travel Insurance Co. v. CMN Global Inc. 2023 ONSC 1527
2023 ONSC 1527 (March 6, 2023)
Superior Court of Justice (E.M. Morgan J.)

Orion Travel Insurance C. (“Orion”) applied under sections 45 and 46(1)6 of the Arbitration Act, 1991, S.O. 1991 c. 17 (“Act”) for leave to appeal and to set aside the arbitral and costs awards of the Arbitrator.

The Applicant raised three issues:

  1. Should the Arbitrator’s award be set aside under section 46(1)6 of the Arbitration Act on the grounds that he did not treat the Applicant fairly and equally and did not provide it with an opportunity to present its case?
  2. Should the Arbitrator’s award be set aside under section 46(1)3 of the Arbitration Act on the grounds that he exceeded the scope of his jurisdiction?
  3. Should the Arbitrator’s award be set aside under section 45(5) of the Arbitration Act on the grounds that his reasons for decision were insufficient or non-independent?

Before analyzing these issues, Morgan J. noted the Court of Appeal’s observations in Tall Ships Development Inc. v. Brockville (City)2022 ONCA 861 at para. 3 that courts should take a cautious approach to reviewing arbitral decisions and keep in focus the policy objectives of the Act to preserve the advantages that arbitration offers to parties. (para. 22) (Editor’s Note: See our summary of Tall Ships here)

Right to be Heard

On the first issue, the Court found that the Arbitrator had designed and followed a “textbook” procedure whereby the parties were each given equal opportunities to address the quantification of damages, which was the focus of the hearing after liability issues were resolved in interim rulings. (paras. 24 and 25) Morgan J. found that given that both parties “employed the identical pathways and applied it to the identical data set”, they were treated equally. He held that “[w]hat the Applicant seems to dislike about the hearing is the result, not the process.” (para. 27)

The Applicant also argued that the Arbitrator denied its right to be heard because it relied on data in an updated analysis by PriceWaterhouseCooper that was not included in the joint book of documents or marked as an exhibit at the hearing. The court rejected that argument because the updated analysis was provided to the Arbitrator by the Applicant’s counsel and was included in the Applicant’s written submissions, to which the Respondent relied in its submissions, and both parties referred to the analysis in oral argument. (para. 28) Morgan J. noted that the court was mindful of the less “formality-driven” nature of arbitrations generally compared to trials and that “the fairness and equality involved in relying on the updated database – the very material that both the Applicant and the Respondent relied upon in making their submissions – is not in doubt.” (paras. 29 and 30)

Morgan J. also rejected the Applicant’s argument that it was denied the right to be heard because the evidence it submitted was not all the evidence it could have submitted on damages. The Applicant had the same opportunity as the Respondent to construct its arguments and present them, both in writing and orally, and the Arbitrator provided both sides with advance notice of the issues and the time they needed to gather their evidence and construct their arguments. “If, after realizing the frailties of his case, Applicant’s counsel has now thought of an approach that could have been taken but was not, that does not amount to a failure of natural justice and a denial of the right to be heard. Otherwise, arbitral processes would be endless as arbitrators could never with certainty draw it to a close.” (paras. 31-33)

Scope of Jurisdiction – Failure to Conduct a Mediation

The Applicant argued that the Arbitrator failed to engage in any mediation even though he was first appointed as a mediator of the dispute. (para. 34) The Respondent argued that the Arbitrator had been engaged to act as a mediator-arbitrator in the sense of engaging in either process as the case called for but not in both. (para. 35)

The court noted that the Arbitrator expressly stated in a direction that he was not proceeding as a mediator, and later stated that he would only do so if it “transpired that there was a possibility of a compromise resolution.” That possibility was never suggested by either party, nor did either party complain about the arbitral procedures during the process. (para. 36)

Morgan J. held that mediation is not an obligatory step unless the arbitration agreement makes it one. While courts have held that a failure to mediate is a procedural defect, that is only when “the parties’ agreement shows that ‘they intended all issues to be mediated’”, which was not this case. (para. 37) In making this determination, the court pointed to the Applicant’s final submissions in which they stated that “there are four issues for you to decide as part of the assessment of damages in this matter…” as support for finding that the Applicant’s counsel knew and agreed that the Arbitrator was to adjudicate, not mediate, the dispute. (para. 39)

Sufficiency of Reasons for Decision

The final issue the Applicant raised was whether the Arbitrator’s final reasons for decision were adequate and sufficient enough to show that “he understood the substance of the matter and addressed the key issues.” (para. 40)

The test the court applied is “a functional one – i.e., do the reasons express enough to inform the parties of why the decision was made.” The question is not one of exhaustiveness or eloquence but of “intelligibility”. (para. 41)

Morgan J. held that while the Arbitrator’s reasons were relatively short, they were not “unintelligible”, and in legal writing, short reasons are “more a blessing than a curse.” (para. 42)

In coming to his decision that the Arbitrator’s reasons were sufficient, the Arbitrator made the following statements that are instructive:

  1. The Supreme Court of Canada’s holdings about the reasons of trial judges are equally applicable to an arbitrator: “There is no need to prove that the trial judge was alive to and considered all of the evidence, or answer each and every argument of counsel” (see R. v. Dinardo2008 SCC 24 (CanLII) at para. 30) and that all that is required is that ‘the reasons show that the judge has seized the substance of the issue.’” (see R. v. R.E.M.2008 SCC 51 (CanLII) at para. 50) (para. 45)
  2. The Arbitrator did not “reproduce verbatim” the Respondent’s submissions; instead, they took the successful side’s submissions and integrated them into the Arbitrator’s own thinking on the issues. (para. 46)
  3. Copying from other judgments, external sources, or the parties’ written submissions is not in and of itself a problem. As the Supreme Court of Canada has held, that is “an accepted part of the judgment-writing process”, which does not render the proceeding unfair without more to indicate that “the judgment itself has been rendered without the adjudicator actively turning their mind to the issues.” (paras. 50 and 51) The copying of someone else’s writing may be an “innocuous” drafting shortcut; if however it amounts to evidence that the reasons do not reflect the adjudicator’s thinking, there is an independence issue. (para. 51)

Morgan J. concluded that there was no lack of independence evidenced in the Arbitrator’s reasons and that the “chain of reasoning leading to the final conclusion” was the Arbitrator’s own. (para. 52) The court therefore refused to set aside the award or grant leave to appeal.

About Us

Arbitration & Business Cases is a blog created by Igor Ellyn and Robin Dodokin in September 2021. Kathryn Manning joined us in October 2022. Our intention is to provide timely, concise summaries and commentary of Ontario and Canadian case law on arbitration and business matters.


Igor Ellyn,
416-540-6611 | 416-365-3750

Robin Dodokin,
FCIArb., Q.Arb., LL.M, Q.Med.

Kathryn J. Manning,