Myriam Seers

The appellant brought a NAFTA Chapter 11 claim against Mexico, which was dismissed by a three-member arbitration tribunal.

The appellant later discovered that the Mexican-appointed arbitrator had communicated with Mexican officials during the arbitration regarding potential future appointments.

The application judge found a reasonable apprehension of bias but declined to set aside the award, reasoning that the other two arbitrators were impartial.

The Court of Appeal allowed the appeal and set aside the award, holding that a reasonable apprehension of bias concerning one member of a tribunal taints the entire panel and cannot be balanced away as a minor procedural error.

The respondent in an application to set aside an international arbitral award brought a motion to strike three affidavits filed by the applicant.

The court determined that the test for admitting fresh evidence on an application to set aside an international arbitral award on procedural fairness grounds is akin to the test applied on judicial review, which requires reasonable diligence, rather than the Palmer test for appeals.

Applying this test, the court struck two affidavits in their entirety because the evidence could have been raised before the arbitral tribunal.

The court also struck portions of a third affidavit that contained improper opinion evidence and speculation.

The applicant sought to challenge an arbitral award, arguing the arbitrator exceeded his jurisdiction by misapplying French law to read a diligent management requirement into an Earn-Out Clause, despite an Entire Agreement Clause.

The applicant also alleged a denial of natural justice due to the arbitrator's refusal to allow a sur-sur-reply.

The Superior Court of Justice dismissed the challenge, finding the arbitrator's interpretation was an unreviewable issue of mixed fact and law, not a true jurisdictional error.

The court also held the arbitrator's procedural ruling was a reasonable exercise of discretion that did not deny the applicant a fair hearing.

The respondent's parallel application to recognize the award was granted.

The defendants moved to stay the plaintiff's action on the basis that the dispute was subject to an arbitration agreement contained in a Share and Asset Purchase Agreement.

The plaintiff had commenced an action claiming oppressive conduct regarding the calculation of EBITDA, which affected the purchase price of the remaining shares.

The court found that it was arguable the dispute fell within the arbitration clause, which covered disputes over any amount shown in an EBITDA report.

The action was stayed pending the arbitrator's determination of jurisdiction and the merits.