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Court's decision on leave tests important to all arbitrators

A recent case that considered the different tests for leave to appeal an arbitral award under the Arbitration Act and the Rules of Civil Procedure has broad implications for any party involved in an arbitration, Toronto family lawyer Herschel Fogelman writes in Lawyers Weekly.

“The test under the Arbitration Act focuses on the rights of the specific parties, whereas the test under the rules looks at broader implications of the decision under review,” writes Fogelman, principal with Fogelman Law.

In Collie v. Collie, the Ontario Superior Court was faced with the choice of which was the appropriate test to apply in a motion for leave arising out of an arbitral award, says Fogelman. The award in question was an interim award, which he says made the decision more difficult.

In Collie, Justice Suzanne Stevenson ruled that “the appropriate test for leave from an interim award of an arbitrator was the test in section 45 of the Arbitration Act, not the test in the Rules of Civil Procedure,” says Fogelman. The parties, said Stevenson, signed the arbitration agreement “for the purpose of having interim issues determined.”

To some extent, says Fogelman, the fact that interim arbitral awards can be appealed seems to run counter to the nature of the process, but he adds that parties cannot opt out of s. 45.

“It does, however, make sense in any arbitral agreement to specifically articulate the appeal routes from interim awards and to distinguish them from those flowing from final awards,” writes Fogelman.

As a result of this case, he says, “given the differing tests between the rules and the act, parties must turn their minds to the test they believe is most appropriate and include a specific provision in their agreements – if not, according to Collie, the more limited test under the act would apply.”

“As a result of the Collie decision, many family law arbitrators are now adopting a very limited appeal route from interim awards while preserving more expansive appeal routes from final awards,” writes Fogelman.

“This practice is more in keeping with the spirit and intent of the arbitration process.”

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