The applicant sought appointment of an arbitrator to determine post‑closing purchase price adjustments under a share purchase agreement after the respondents refused to engage the designated accounting firm arbitrator and raised allegations of bias based on the accounting firms having previously retained the applicant’s law firm in unrelated matters.
The court reviewed the legal test for reasonable apprehension of bias applicable to arbitrators and held that the mere fact that an accounting firm had retained counsel for one party in unrelated insolvency matters does not give rise to a reasonable apprehension of bias.
The court found the respondents’ allegations meritless and concluded their conduct had derailed the agreed arbitration process.
Although a former judge was ultimately appointed as arbitrator on consent, the court determined the applicant had lost its contractual right to the designated arbitrator due to the respondents’ unjustified conduct.
Significant costs were ordered against the respondents for acting in bad faith and breaching earlier court orders.