Arbitrator's decision isn't detailed enough and disregards relevant evidence, judge finds
The Court of King’s Bench of Alberta recently set aside an arbitration award on the basis that the arbitrator failed to provide sufficiently intelligible reasons and failed to consider relevant evidence.
The parties in this case used to cohabit before their common-law relationship broke down. They participated in an arbitration process to decide the issues of property division and spousal support.
In April 2021, they entered into an arbitration agreement, which allowed for appeals based only on errors of law. The arbitrator issued his award in December 2022, a correction and clarifications in April 2023, and a costs award in November 2023.
Both parties challenged the arbitration results. The man argued that the arbitrator failed to apply the appropriate legal test for unjust enrichment, failed to review essential materials, and failed to give sufficient reasons for his decisions.
The woman echoed her former partner’s concern about the arbitrator’s handling of the unjust enrichment issue.
Arbitral award set aside
In Giacchetta v Beck, 2024 ABKB 481, the Alberta Court of King’s Bench issued a ruling setting aside the arbitrator’s main decision, the correction and clarifications, and the costs award upon finding errors of law.
The court returned the matter to the arbitration stage, this time under a new arbitrator. The new arbitrator should receive the same record and briefs submitted during the original arbitration but could specifically request the parties to provide additional evidence or updated briefs, the court ordered.
First, the court ruled that the arbitrator’s explanations regarding the quantification of certain assets, including a Las Vegas property and certain firearms, were insufficient. The arbitrator’s lack of detailed reasons for these findings made a proper review difficult, the court explained.
The court cited the case of Custom Metal Installations Ltd v Winspia Windows (Canada) Inc, 2020 ABCA 333, which established that a failure to give sufficiently intelligible reasons amounted to an error of law.
Second, the court held that the arbitrator failed to review the man’s affidavit of records, which was a part of the evidence during the arbitration. The court referenced the ruling in Ball v. Imperial Oil Resources Limited, 2010 ABCA 111, which stated that a failure to consider relevant evidence was a legal error.
Lastly, the court determined that the arbitrator’s application of the legal test for unjust enrichment did not amount to error of law. The court stressed that it should give arbitral decisions wide discretion, given the general purposes of Alberta’s Arbitration Act, 2000.
Judicial intervention is limited, given that arbitrations aim to provide parties a faster and cheaper dispute resolution process, the court said. The court cited the judgments in ENMAX Energy Corporation v TransAlta Generation Partnership, 2022 ABCA 206 and Esfahani v Samimi, 2022 ABCA 178.
