Sabrina Allaudin Bandali

This appeal concerns the admissibility of fresh evidence in an application to set aside an arbitral tribunal's jurisdictional decision under the UNCITRAL Model Law.

The Court of Appeal for Ontario affirmed the Divisional Court's ruling that such applications are hearings de novo, allowing parties to introduce evidence not previously before the arbitral tribunal, and that the "competence-competence" principle does not limit the court's fact-finding ability in this context.

The Court dismissed the appeal, upholding the Divisional Court's decision to admit the fresh evidence.

A dispute arose from the administration and eventual sale of a rental property held in trust where one party held legal title as trustee for himself and another beneficiary.

The trustees failed to maintain financial records over a 13‑year period, leading both sides to rely on competing accounting experts to reconstruct profits.

The trial judge accepted the respondent’s expert report and awarded damages for breach of trust, aggravated damages, and substantial indemnity costs.

On appeal, the Court of Appeal held that the trial judge erred in relying on the respondent’s expert because the assumptions about rental income were inconsistent with the evidence.

The court reassessed damages directly on the record, reducing the award and costs, while upholding aggravated damages and allowing the cross‑appeal of the solicitor on the basis that no duty of care or fiduciary duty was owed to the beneficiary.

The applicant sought recognition and enforcement in Ontario of an international arbitral award issued in New York requiring the respondent to pay over USD $3.5 million.

The respondent argued the application was premature because it was commenced within the three‑month period for setting aside an award under the UNCITRAL Model Law and that enforcement would be contrary to public policy due to ongoing regulatory proceedings before the U.S. Securities and Exchange Commission.

The court held that the relevant inquiry is whether the award is binding at the time of the enforcement hearing, not when the application was commenced.

As no application to set aside or suspend the award was pending and the regulatory proceeding did not undermine the arbitral decision, there was no basis under Article 36 of the Model Law to refuse recognition or enforcement.

The award was recognized and enforced in Ontario.