Brent R.H. Johnston

The appellants appealed the dismissal of their application to set aside a NAFTA Chapter 11 arbitration award.

They argued the tribunal exceeded its jurisdiction by misapplying the causation standard and that the award violated public policy.

The Court of Appeal dismissed the appeal, affirming the narrow scope of judicial review for arbitration awards under the Commercial Arbitration Code.

The court held that the tribunal acted within its jurisdiction and that the award did not conflict with Canadian public policy, which requires a very high standard for intervention.

The applicants sought to set aside a NAFTA Chapter 11 arbitral tribunal's damages award, arguing the tribunal exceeded its jurisdiction, breached procedural fairness, and rendered an award contrary to Canadian public policy.

The tribunal had previously found Canada breached its NAFTA obligations regarding an environmental assessment for a proposed quarry, but in the damages phase, awarded only $7 million USD for the lost opportunity of a fair assessment rather than the $440 million claimed for lost profits.

The Superior Court of Justice dismissed the application, finding the tribunal correctly applied the international law standard of proof, did not breach natural justice in its procedural rulings regarding expert reports, and rendered a decision that was not contrary to public policy.