ONTARIO – Arbitration-Court intervention pursuant to s. 6 Arbitration Act, 1991-relief must be as provided under one or more other provisions of the Act- court interpretation is that s 6 is restricts court intervention and there is no automatic right of appeal from a s. 6 order. SEE CASE #0138H

ALBERTA – Arbitration- Court intervention pursuant to s.6 Arbitration Act-relief may be granted independently of any other section of the Act- court interpretation is that s 6 creates avenues for court intervention and that there is an unconditional right of appeal from s.6 orders. SEE CASE #0138E

Opposing Views of Court “Assistance” to Arbitration in Alberta and Ontario
William G. Horton[1]

The Arbitration Act (the “Act” or “Acts”) in both Alberta and Ontario contain the following identical provision:

Court intervention limited

6 No court may intervene in matters governed by this Act, except for the following purposes as provided by this Act:

1. to assist the arbitration process;
2. to ensure that an arbitration is carried on in accordance with the arbitration agreement;
3. to prevent manifestly unfair or unequal treatment of a party to an arbitration agreement;
4. to enforce awards.

Recent decisions from the Courts of Appeal in both provinces highlight a stark and critically important difference in the way they interpret this section. The difference lies in whether courts see this provision as creating avenues for court intervention in itself, or as expressing an overall policy or benchmark important for understanding other provisions of the Acts.

In Alberta, this section has been interpreted to mean that a party may seek relief from a court and the court may grant relief for any of the purposes set out in s. 6, independently of any other section in the Act and without regard to any of the particular conditions or restrictions in those other sections: Sivitilli v PesoRama Inc, 2024 ABCA 249 (“Sivitilli”).

In Ontario, the section has been interpreted to mean that any relief sought or granted must be as provided under one or more other provisions of the Act, whether or not s. 6 is cited: Toronto Standard Condominium Corporation No. 2299 v Distillery SE Development Corp., 2024 ONCA 712 (“Distillery”).

Each of the two cases can be very simply summarized.

The Sivitilli Decision

In Sivitilli, PesoRama sought to stay an arbitration. It did so under s. 47(1)(b) of the Alberta Act on the ground that the arbitration agreement was invalid. It also did so under s. 6, on the ground that court intervention was necessary to prevent manifestly unfair or unequal treatment. The application was rejected on both grounds by the application judge. PesoRama initiated an appeal. It sought leave to appeal as required by the Act in relation to a decision under s. 47 of the Act. But it took the position that no leave was necessary with respect to the order under s.6, as the Act imposed no limitation on the right to appeal an order made under that section. Justice Hawkes, the leave application judge in the Alberta Court of Appeal, conducted an extensive review of the Alberta Rules of Court and section 3(b)(iv)(A) of the Judicature Act to determine what rights of appeal exist from an order made by a judge under a statutory provision which has no explicit right of appeal or limitation on any right of appeal. He concluded that in such a case, there is an unconditional right of appeal. On that basis, he found that PesoRama had an appeal as of right from the order made by the judge under s. 6.

The important point for the present discussion is that Justice Hawkes’s decision assumes that there was an order made under s. 6. Beginning from that premise, his analysis led directly to an entitlement to appeal that order. In coming to this conclusion, Justice Hawkes followed an earlier decision of the Alberta court of Appeal in New Era Nutrition Inc. v Balance Bar Company,[2] which explicitly held that a party can apply for a stay of the arbitration under s. 6, even though s. 6 does not explicitly provide for an application to stay an arbitration.[3] In New Era, the Alberta Court of Appeal had cited legislative history in Alberta which demonstrated that an earlier proposal to restrict court intervention under s. 6 to other specific provisions in the Act was rejected in favour of the current version, which lists what seem to be exceptions to the general rule of exclusion of court intervention.

Although the decision of the Alberta Court of Appeal in New Era has been called into question by at least one lower court decision,[4] it was never overturned and has now been affirmed in Sivitilli.

The Distillery Decision

In Distillery, the Condo Corp applied to the court requesting the appointment of an arbitrator. It did so under ss 6, 7, and 17 of the Ontario Act, and r. 14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. It made no reference to s 10 of the Act, which authorizes the court to appoint an arbitrator and excludes any right of appeal from that decision. The court appointed an arbitrator and Distillery appealed the decision under s. 6 of the Act, noting that neither this provision nor the Rules of Civil Procedure imposed any express restriction on appeals under s 6. The Ontario Court of Appeal rejected this submission, stating as follows:

[18] Distillery’s first point can be dealt with briefly. Although the Condo Corp. did not expressly cite s. 10 of the Act, the notice of application stated that it was made under the Act. It stated it was seeking directions (including the appointment) to ensure the arbitration was conducted in accordance with the SFA and the agreement to appoint Mr. Campbell. Section 6 of the Act, which the application did cite, permits court intervention for such purposes “in accordance with the Act”. Section 10 is the only arguably applicable provision of the Act that contemplates the court appointing an arbitrator.

[20] Nor is it significant that the application judge did not cite the source of her authority to make the appointment. If the authority to appoint came from the Act, it came from s. 10, whether or not the application judge referred to it.

The Ontario Court of Appeal conducted no examination of prior jurisprudence or statutory history in arriving at its conclusion, saying only that:

In accordance with the modern approach to statutory interpretation, the meaning of [the provision in issue – here s. 10 of the Act] must be determined by considering its text, context and purpose ….

It is noteworthy that, in its interpretive process, the Ontario Court of Appeal considered s 10, not s 6, to be “the provision in issue” for the purpose of determining a right of appeal. This is consistent with its view that the order sought could only have been made under s 10, not s 6.

It might also be noted that, while the Court did not cite Brian Casey’s treatise on arbitration in Canada, , its position is consistent with Casey’s:

The words “as provided by this Act” [in s 6] limit court intervention to matters that are expressly set out in the Act. The court cannot treat the itemized purposes as creating some sort of general jurisdiction to intervene.[5]

Correctness and Consequences

The purpose of this case comment is not to consider the correctness of either decision. Decisions of the Alberta Court of Appeal are not binding on the Ontario Court of Appeal, and vice versa. Additionally, the legislative history in Alberta which was cited in the New Era decision is not directly relevant to the interpretation of the Ontario Act, despite the identical wording in the two Acts’ s 6. The modest goal of this case comment is to draw attention to the massive consequences that could arise from the different approaches in the two provinces.

It might fairly be said that the effect of both approaches to the interpretation of s 6 is to give it a meaning that could be more clearly expressed with minimal change to the statutory language. To illustrate:

Under the Alberta approach, the restrictive words of the lead-in to the enumerated purposes in the actual text of the section have no meaning. Obviously, a court may intervene where the Act says it can in other sections of the Act. The gist of the Alberta interpretation is to say that a court may also intervene for the additional enumerated purposes. On the Alberta interpretation, the enumerated grounds are additive, so any curtailment of court intervention is read out of the section.

Under the Ontario approach, the words “as provided by this Act” are interpreted to not include s 6. The enumerated purposes are treated as a limitation on the exercise of jurisdiction under other provisions of the Act.

While both judgments arose in relation to rights of appeal, the underlying analysis turns on an issue of much broader application: whether or not s 6 provides a separate and independent basis for applications to the court and for court jurisdiction and rights of appeal in dealing with those applications. If it does not, any analysis based on rights of appeal from a court order made under a statute that makes no provision for a right of appeal is irrelevant because there is no statutory basis for the order in the first place. This is the nub of the issue on which the Alberta Court of Appeal and the Ontario Court of Appeal differ.

The clear implication is that, in Alberta, applications that parties bring in reference to arbitrations need not be confined to—or even invoke—any of the other provisions of the Act as long as they engage (or are alleged to engage) one of the very broad purposes enumerated in s 6. For example, s 6 would appear to be broad enough, on this interpretation, for directions to the tribunal to be sought from the court during the course of an arbitration “to prevent manifestly unfair treatment”. In Alberta, if s 6 provides an independent basis for judicial intervention, this can be done either by bringing applications only under s 6 or in combination with applications under other sections of the Act. In either case, the results of those applications can be appealed as of right. Possibly, the unconditional appeal rights would exist even if an application is not brought under s 6 but s 6 is invoked as a ground for a decision made under another section by the judge who makes the order. The effect is to eliminate any limitations on rights of appeal under other sections of the Act as long as grounds for the application can be stated under s 6.

Indeed, if s 6 is treated as an independent basis for applying to the court, it is not clear why any other sections granting specific jurisdiction to the court in particular circumstances are necessary. The purposes enumerated in s 6 would appear to be broad enough to cover almost any situation. The exceptions will have swallowed the rules.

This observation highlights another feature of s 6, namely that the section does not refer to any specific form of application that may be brought or any specific relief that the court is empowered to grant. Legal and judicial creativity, based on an appeal to the equitable discretion of the court, exercised in reference to the enumerated “purposes”, is encouraged by this approach. The salient point on this interpretation is the judge’s intention in granting or refusing an order under s 6.

On first reading, the overall impression of s 6 is that it is imposing a restriction. But if read as providing an independent power of the court to intervene based on any of a number of widely-stated purposes, with an unconditional right of appeal, it would appear to confer jurisdiction to intervene larger even than the shoe size of the Chancellor with the biggest foot. This approach could easily lead to many and long court interventions during the course of an arbitration. But that appears to be the law in Alberta. It does not appear to be so in Ontario.

The Trend away from Court Intervention

It is worth concluding with the note that, while Sivitilli and Distillery may correctly state the law in their respective provinces, the general trend in Canada and internationally has for some time been to move in the direction of greater and more specific limitations on Court intervention. The Uniform Arbitration Act promulgated by the Uniform Law Conference of Canada in 2016[6] recommends using the simpler wording of the equivalent provision of the UNCITRAL Model Law on International Commercial Arbitration:

6 No court may intervene in matters governed by this Act, except as expressly provided by this Act.[7]

The same recommendation was made by the Arbitration Act Reform Committee of the Toronto Commercial Arbitration Society in February, 2021[8].

The new Arbitration Act enacted in British Columbia in 2020 contains the following provision, which presumably addresses additional issues which have arisen in that province:

4 In matters governed by this Act,

(a)    a court must not intervene unless so provided in this Act, and

(b)    the following must not be questioned, reviewed or restrained by a proceeding under the Judicial Review Procedure Act or otherwise except to the extent provided in this Act:

(i)      an arbitral proceeding of an arbitral tribunal or an order, ruling or arbitral award made by an arbitral tribunal;

(ii)     a determination or direction by the designated appointing authority.[9]

Thus, regardless of the correctness of Sivitilli, or perhaps especially because it should be taken as correct in terms of Alberta law, the need for legislative reform and greater clarity seems obvious and urgent. The entrenchment in Alberta, or elsewhere in Canada, of the notion that Courts can intervene in an arbitration, directly and independently, for any of the the purposes set out in s.6 with any such intervention being subject to an absolute right of appeal literally implies the dismantling of all other protections against Court intervention which have previously been assumed to be integral to Canadian arbitral legislation.

[1] Independent Arbitrator: www.wgh@wgharb.com.

[2] 2004 ABCA 280.

[3] S 7(4) provides for a stay of the arbitration only if an application to stay a court proceeding is refused. A respondent can move under s. 47 of the Albert Arbitration Act (or s.48 of the Ontario Act) to have the arbitration declared invalid, but only on specified grounds. If those grounds do not exist, the respondent may commence an action and wait for the claimant in the arbitration to move to stay the action. If the Claimant’s motion is defeated the arbitration will be stayed under s. 7(4). But if the Respondent does not have the grounds to have the arbitration declared invalid and does not wish to commence its own action, there is no provision for the Respondent to apply for a stay of the arbitration. One might view that as a lacuna in the legislation or an expression of a legislative intent that a stay of the arbitration should not be allowed in those circumstances.

[4] Alberici Western Constructors Ltd v Saskatchewan Power Corporation, 2015 SKQB 74 at para 56. In any event, the decision in Alberici Western Constructors seems to miss, or gloss over, the question as to whether an order can be made independently under s 6. Indeed, it seems to assert without providing reasoning that s 6 permits “intervention” in an ongoing arbitration to prevent “manifestly unfair treatment”.

[5] J Brian Casey, Arbitration Law of Canada, 4th ed (Huntington: Juris, 2020) at 315.

[6] https://www.ulcc-chlc.ca/Civil-Section/Uniform-Acts/Uniform-Arbitration-Act/Uniform-Arbitration-Act-(2016)

[7] UNCITRAL Model Law on International Commercial Arbitration, Annex 1, UN Doc A/40/17 (1985), with amendments as adopted in 2006 (7 July 2006), art 6.

[8] https://torontocommercialarbitrationsociety.com/arbitration-act-reform-committee/

[9] Arbitration Act, SBC 2020, c2: https://torontocommercialarbitrationsociety.com/arbitration-act-reform-committee/