Court File and Parties

COURT FILE NO.: CV-23-00091107 DATE: 2023/02/27 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Canadian Soccer Association Incorporated o/a Canada Soccer, Applicant AND Association de Soccer de Brossard, Respondent

BEFORE: The Honourable Justice Robyn M. Ryan Bell

COUNSEL: Danesh Rana, for the Applicant/Moving Party Timothy Cullen and Ricki-Lee Williams, for the Respondent/Responding Party

HEARD: January 24, 2023

Endorsement on motion and cross-motion

Overview

[1] The Canada Soccer Association Incorporated o/a Canada Soccer moves for an interim stay of an arbitral award pending a decision in its application. Association de Soccer de Brossard (“ASB”) opposes the motion and has brought a cross-motion to enforce the arbitral award. The matter was argued before the court on February 24, 2023. Due to the urgency of the matter, I rendered an oral decision following argument in which I dismissed the motion and granted the cross-motion, with written reasons to follow. These are my reasons.

Background

[2] Canada Soccer is the governing body for soccer at the national level in Canada. ASB is a youth soccer organization in the Brossard region of Quebec.

[3] ASB applied to Canada Soccer for a National Youth Club License. A National Youth Club License would allow ASB to attract top players and be admitted to a higher-level competition. In particular, ASB would be permitted to place teams in two elite youth soccer leagues in Quebec: the Première Ligue de Soccer Juvénile du Québec and the Ligue de développement Provinciale.

[4] On December 12, 2022, ASB’s application for a National Youth Club License was rejected.

[5] ASB appealed Canada Soccer’s decision to the Sport Dispute Resolution Centre of Canada (“SDRCC”). On January 7, 2023, an arbitrator appointed by the SDRCC overturned Canada Soccer’s decision and ordered Canada Soccer to grant a National Youth Club License to ASB for the 2023 and 2024 soccer seasons.

[6] Soccer Canada then commenced this application, seeking to set aside the arbitral award. No hearing date has been set for the application.

The Canada Sport Dispute Resolution Code

[7] The arbitration was conducted pursuant to the Canada Sport Dispute Resolution Code. The Code provides that the applicable law for arbitrations is the law of Ontario and that, subject to the relevant provisions of the Arbitration Act, 1991, S.O. 1991, c. 17, parties to arbitration under the Code “expressly and irrevocably” waive their rights to request further or alternative relief: Code, s. 5.16.

[8] Section 6.12(c) of the Code provides:

The award shall be final and binding upon the Parties. There is no right of appeal on questions of law, fact or mixed questions of fact and law.

Canada Soccer’s Application

[9] In its application, Canada Soccer seeks to set aside the arbitral award, relying on s. 46(1)6 of the Arbitration Act, 1991. Section 46(1)6 provides:

On a party’s application, the court may set aside an award on any of the following grounds:

6. The applicant was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator.

[10] The grounds upon which Canada Soccer relies are set out at paragraph 3 of its notice of application:

a. The arbitrator failed to apply the criteria required by Canada Soccer for awarding a National Youth Club License when he awarded ASB a National Youth Club License. As a result Canada Soccer was not treated equally and fairly by the arbitrator, therefore his decision should be set-aside [sic] as per section 46(1)6 of the Arbitration Act.

b. The arbitrator applied the incorrect test in setting aside the decision of Canada Soccer’s Club Licensing Committee and as such, this violates the natural justice rights of Canada Soccer, and therefore the decision of the arbitrator should be set-aside [sic] per section 46(1)6 of the Arbitration Act.

c. An order pursuant to section 50(5)(b) of the Arbitration Act staying the decision of the arbitrator is required because there are numerous soccer associations who had their applications rejected by Canada Soccer’s Club Licensing Committee. Therefore, Canada Soccer, Canada Soccer’s Club Licensing Committee and the SDRCC need guidance from this Court to properly assess these applications and it is only equitable to stay the current decision of the SDRCC.

[11] Ground c. in the notice of application is the basis for the relief requested on this motion, not the application.

[12] Section 50(5) of the Arbitration Act, 1991 provides:

If the period for commencing an appeal, application to set the award aside or application for a declaration of invalidity has not yet elapsed, or if such a proceeding is pending, the court may,

(a) enforce the award; or

(b) order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced, or until the pending proceeding is finally disposed of.

[13] Canada Soccer brings its motion under s. 50(5)(b). ASB moves under s. 50(5)(a) to enforce the arbitral award.

Test for an Interim Stay

[14] The three-part test for obtaining a stay of a decision pending an application is (i) is there a serious question to be determined on the application, (ii) will the moving party suffer irreparable harm if the stay is not granted, and (iii) does the balance of convenience favour granting the stay: RJR-MacDonald Inc. v. Canada (Attorney General), at p. 334.

[15] In applying the three-part test, the court is mindful that “[t]hese three criteria are not watertight compartments. The strength of one may compensate for the weakness of another” and generally, “the court must decide whether the interests of justice call for a stay”: Circuit World Corp. v. Lesperance, at p. 677; BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, at para. 16.

[16] ASB submits that where a stay would effectively amount to a final determination of the merits, the test under the first criterion is whether the moving party has a strong prima facie case, rather than whether there is a serious issue to be tried. ASB says that a stay of the arbitral award for any length of time would deprive ASB of a National Youth Club License for the 2023 season.

[17] As mentioned, with a National Youth Club License, ASB would be permitted to place teams in two elite youth soccer leagues in Quebec. Soccer Quebec oversees these leagues and, at present, takes the position that it cannot recognize ASB’s registration in either league in the absence of recognition from Canada Soccer. Soccer Quebec was scheduled to release its calendar for the 2023 soccer season to member teams on February 13, 2023. Member teams would then have until February 28, 2023 to finalize schedules for the 2023 season.

[18] ASB submits that even if a stay were ultimately reversed following the court’s determination of Canada Soccer’s application in time to be included in the 2023 soccer schedule – a seemingly remote possibility given that no hearing date for the application has been scheduled – ASB would have lost the ability to recruit players and coaching staff, to develop the profile of its team, and to “lock in” team sponsorship funding in the interim period.

[19] I need not determine whether the higher standard applies in this case because I find that Canada Soccer has not met the low threshold of establishing a serious issue to be tried.

No Serious Issue to be Tried

[20] Canada Soccer asserts that the awarding of a National Youth Club License to ASB is a “serious issue.” With respect, the first branch of the test requires, not that the issue be meaningfully important, but rather that there be a serious issue to be determined on the application.

[21] Canada Soccer cannot establish that there is a serious issue to be tried on the application because, on their face, the grounds for the application relate to the merits of the arbitrator’s decision. In Tall Ships Development Inc. v. Brockville (City), 2022 ONCA 861, the Court of Appeal for Ontario emphasized the narrow basis for setting aside an arbitral award under s. 46 of the Arbitration Act, 1991, “which is not concerned with the substance of the parties’ dispute and is not to be treated as an alternate appeal route.”

[22] Canada Soccer seeks to set aside the arbitral decision on two bases: a. the arbitrator “failed to apply the criteria” required by Canada Soccer and therefore, Canada Soccer was not treated “equally and fairly”; and b. the arbitrator “applied the incorrect test” in violation of Canada Soccer’s natural justice rights. I agree with ASB that these grounds disclose an impermissible appeal of the merits of the arbitral decision, thinly disguised as a procedural grievance. Section 46 of the Arbitration Act, 1991 “cannot be used as a broad appeal route to bootstrap substantive arguments attacking an arbitrator’s findings” that are immune from appeal: Tall Ships, at para. 95.

[23] In The Tire Pit Inc. v. Augend 6285 Yonge Village Properties Ltd., 2022 ONSC 6763, Vermette J. discussed the phrase “equally and fairly” as used in s. 46(1)6 of the Arbitration Act, 1991:

The court has a supervisory responsibility to ensure that all parties receive the benefit of a fair procedure. The obligation to treat parties “equally and fairly” in both ss. 19(1) and 46(1)6 of the Act incorporates the requirement of natural justice and procedural fairness. In the context of these provisions, procedural fairness generally refers to the right to be heard and the right to an independent and impartial hearing. It is important to remember that the duty of fairness is concerned with ensuring that adjudicators act fairly in the course of making decisions, not with the fairness of the actual decisions they make.

[24] I agree with and adopt the reasoning of Vermette J. in The Tire Pit. “Equally and fairly” as used in s. 46(1)6 incorporates the requirement of natural justice and procedural fairness in the conduct of the arbitration. Canada Soccer cannot use s. 46(1)6 to bootstrap its substantive concerns with the arbitrator’s findings which, pursuant to s. 6.12(c) of the Code, are immune from appeal.

[25] I therefore find Canada Soccer has not established that there is a serious issue to be tried on the application.

Irreparable Harm and Balance of Convenience

[26] While my finding that there is no serious issue to be tried on the application is sufficient to dispose of the motion, I have also considered the issues of irreparable harm and balance of convenience. For the following reasons, I find that neither warrants the granting of a stay.

[27] There is no evidence that Canada Soccer will suffer any harm if a stay of the arbitral award is not granted. While Canada Soccer cites “confusion” that has been created following the arbitral award in the evaluation of other teams’ applications for a National Youth Club License, Canada Soccer’s affiant agreed on cross-examination that Canada Soccer can assess every pending and future application for a license. In any event, the arbitral award is not a “precedent.” The Code, which is the framework for the arbitration, provides that “[e]ach case must be determined on its facts and the Panel shall not be bound by previous awards or decisions, including those of the SDRCC”: Code, s. 5.13(e). The arbitral award is confined to the facts surrounding ASB’s license application.

[28] Canada Soccer also asserts that there will be “devastation” to players who are recruited by ASB if a stay is not granted and the arbitral award is ultimately reversed. Canada Soccer’s professed concern for the players is belied by its position on the application and this motion. In any event, harm to players is not harm to Canada Soccer.

[29] The balance of convenience strongly favours ASB. There is evidence that the granting of a stay would harm ASB. ASB would be deprived of fielding teams in the highest level of youth soccer in Quebec for at least the 2023 season. The uncertainty regarding ASB’s ability to participate in the 2023 soccer season has already resulted in some players transferring to other teams. There is a legitimate concern that ASB would lose sponsorship opportunities in relation to those sponsors interested in sponsoring ASB’s elite level teams. Revenues in the form of player premiums would be lost.

[30] On the balance of convenience, while Canada Soccer relies on the fact that it has two SDRCC proceedings that allegedly seek to rely on the arbitral award at issue in this case, Canada Soccer has obtained stays of those proceedings. I agree with ASB that they are irrelevant to the assessment of the balance of convenience in the case before me.

[31] Canada Soccer claims that by writing to the Minister of Sport, ASB “has taken steps to deny Canada Soccer its funding from the Federal Government.” Canada Soccer maintains that if it loses its funding, its ability to grow and manage the game of soccer nationally will be compromised. However, Sport Canada has made no change and has proposed no change to Canada Soccer’s funding in response to ASB’s letters. There is no evidence to suggest that this court’s determination of the motion and cross-motion poses any risk to Canada Soccer’s funding.

[32] For these reasons, Canada Soccer’s motion for a stay of the arbitral award is dismissed.

Order Enforcing the Arbitral Award

[33] The arbitral award is legally binding. However, in the absence of Canada Soccer granting ASB a National Youth Club License, Soccer Quebec has, thus far, refused to confirm the enrolment of ASB’s youth teams in the elite leagues. Enforcement of the award is therefore necessary to allow ASB and its players the benefits of the award.

[34] I reject Canada Soccer’s submission that ASB should be denied equitable relief under s. 50(5)(a) of the Arbitration Act, 1991 because it has “unclean hands.” Canada Soccer maintains that in writing to the Minister of Sport and “accus[ing] Canada Soccer of bullying and referencing its funding” ASB acted improperly. Only conduct that is immediately and necessarily related to the claim in question will bar a claim in equity: Taylor v. Guindon, at para. 48; Boni v. Leonardo Worldwide Corporation, 2018 ONSC 1875, at para. 73. On their face, the letters are unrelated to ASB’s cross-motion to enforce the arbitral award. There has been no change and no proposed change to Canada Soccer’s funding as a result. Canada Soccer’s allegation that the letters are defamatory is unrelated to the application to set aside the arbitral award. There is nothing in the evidence to support Canada Soccer’s submission that the alleged defamatory nature of the letters constitutes irreparable harm.

Disposition

[35] Canada Soccer’s motion for an interim stay of the arbitral award is dismissed. ASB’s cross-motion is granted. An interim order will go under s. 50(5)(a) of the Arbitration Act, 1991, enforcing the arbitral award pending the determination of the application.

[36] In the event the parties are unable to agree on costs of the motion and cross-motion, they may make written submissions limited to a maximum of three pages, exclusive of relevant attachments. ASB shall deliver its costs submissions by March 13, 2023. Canada Soccer shall deliver its responding costs submissions by March 27, 2023. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

Madam Justice Robyn M. Ryan Bell Date: February 27, 2023