Eileen Church Carson

The appellants appealed an arbitrator's costs award under section 45 of the Arbitration Act, 1991.

The arbitrator had awarded the respondent its full legal expenses, including fees paid to its corporate counsel for 'litigation support'.

The court first determined that leave to appeal an arbitral costs award is not required under section 133(b) of the Courts of Justice Act, as that provision applies only to courts.

On the merits, the court found that the arbitrator did not err in principle or act plainly wrong in awarding full indemnity costs, noting that the Arbitration Act does not bind arbitrators to the scales of costs in the Rules of Civil Procedure.

The court also upheld the arbitrator's decision to allow recovery of the litigation support fees.

The appeal was dismissed.

The respondent moved to quash an appeal of an arbitral costs award on the basis that the appellants failed to seek leave to appeal under s. 133(b) of the Courts of Justice Act.

The appellants argued that the Arbitration Act and their arbitration agreement provided broad appeal rights without the need for leave.

The court dismissed the motion to quash, finding that the appeal was not manifestly devoid of merit and that the requirement for leave in commercial arbitrations with broad appeal agreements remains an open question to be determined by the judge hearing the appeal.

The defendants were successful in obtaining a temporary stay of the Ontario action and sought costs of the motion on a partial indemnity scale.

The plaintiff argued that costs should follow the cause and be awarded upon final disposition, or that the parties should bear their own costs because the defendants were only partially successful.

The court rejected the plaintiff's arguments, finding the defendants were the successful parties and entitled to costs payable forthwith.

Costs were fixed at $23,687.55 on a partial indemnity scale.