Success at the Ontario Court of Appeal - Motion to Quash Appeal of
Arbitrator's Appointment
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On September 27, 2024, Rahool Agarwal and Lars Brusven were successful on a motion to quash an appeal seeking to overturn the Ontario Superior Court's appointment of an arbitrator. This was an important case of first impression before the Court of Appeal dealing with the application of subsection 10(1)(b) of Ontario's Arbitration Act (the "Act") to disputes over the appointment of arbitral panels.
In 2023, LOLG brought a successful application before Justice Shin Doi to appoint an arbitrator pursuant to the terms of a shared facilities agreement between LOLG's client, a condominium corporation, and a developer. The developer appealed Justice Shin Doi's decision, and LOLG brought a motion to quash the appeal on the basis that appeals of appointments made under section 10 of the Act are prohibited under subsection 10(2).
In its decision granting LOLG's motion to quash, the Court of Appeal rejected the developer's primary argument that subsection 10(1)(b) of the Act did not apply in the circumstances. The developer argued that, because the condominium and the developer were in a dispute over the appointment of an arbitrator under their shared facilities agreement, 10(1)(b) did not apply because that subsection contemplates a court appointing an arbitral panel where "a person with power to appoint the arbitral tribunal has not done so after a party has given the person seven days notice to do so". The Court of Appeal found that the power of a court to appoint an arbitrator under section 10 of the Act exists when parties jointly have the power to appoint, and they either fail to agree on the arbitrator or, having reached an agreement, one party then refuses to follow through on it. The Court of Appeal specifically rejected the developer's argument that Justice Shin Doi appointed the arbitrator under the court's inherent jurisdiction to enforce contracts, finding that to accept the developer's argument would do an end run around the restrictions on appeal rights which are carefully crafted under the Act.
The Court of Appeal’s decision provides important guidance confirming that section 10 of the Act is available to parties caught up in preliminary disputes over the appointment of an arbitral tribunal. Where no agreement can be reached on an appointment, or where a party refuses to take the necessary steps to follow through on an agreed-upon appointment, an applicant may seek necessary relief under section 10 of the Act.
The Court of Appeal’s reasons for decision can be found here: Toronto Standard Condominium Corporation No. 2299 v. Distillery SE Development Corp., 2024 ONCA 712