{"id":290720,"date":"2026-05-25T11:00:00","date_gmt":"2026-05-25T09:00:00","guid":{"rendered":"https:\/\/dailyjus.com\/?p=290720"},"modified":"2026-06-01T13:41:32","modified_gmt":"2026-06-01T11:41:32","slug":"2025-arbitration-year-in-review-canada","status":"publish","type":"post","link":"https:\/\/dailyjus.com\/index.php\/2026\/05\/25\/2025-arbitration-year-in-review-canada\/","title":{"rendered":"2025 Arbitration Year In Review – Canada"},"content":{"rendered":"\n
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THE AUTHORS:<\/strong>
Andrew Kalamut<\/strong>, Partner at McCarthy T\u00e9trault<\/a><\/strong>.
Jocelyn Turnbull Wallace<\/strong>, Partner at McCarthy T\u00e9trault<\/strong><\/a>
Kyle R. McMillan<\/a><\/strong>, Associate at McCarthy T\u00e9trault<\/strong><\/a>
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This article was featured in Jus Mundi<\/a>‘s 2025 Arbitration Year in Review<\/strong>, an annual publication analyzing arbitration developments across 40+ jurisdictions on 6 continents. This edition brings together young practitioners and senior experts to capture the year’s most significant legislative reforms, enforcement trends, and institutional innovations.<\/p>\n\n\n\n

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Download now<\/a><\/div>\n<\/div>\n<\/blockquote>\n\n\n\n
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Courts Consider the Interplay of Court Proceedings and Arbitration <\/strong><\/h2>\n\n\n\n

Several decisions from various jurisdictions in Canada<\/a> considered the circumstances in which court proceedings ought to be stayed in favour of arbitration. <\/p>\n\n\n\n

In <\/em>Sivitilli v PesoRama Inc.<\/em><\/a> (2025 ABCA 56), the Court of Appeal of Alberta (\u201cABCA<\/strong>\u201d) examined whether a chambers justice failed to consider section 6(c) of Alberta\u2019s Arbitration Act<\/em><\/a> (RSA 2000, c A-43) which permits the court \u201cto prevent manifestly unfair or unequal treatment of a party to an arbitration agreement\u201d in a decision not to enjoin an arbitration. The first instance judge allowed a wrongful dismissal dispute to proceed to arbitration despite ongoing related oppression litigation, finding the matters sufficiently separable. The appellant had argued that the arbitration duplicated the court proceeding and should be stayed. However, the first instance judge found that the overlapping facts and the use of the oppression litigation as leverage in the arbitration claim did not warrant staying the arbitration. The ABCA determined that although the chambers justice did not expressly reference section 6(c) of the Arbitration Act<\/em>, it found the judge\u2019s decision was well reasoned and entitled to deference. <\/p>\n\n\n\n

In Halton Healthcare Services Corporation v. Plenary Health Milton LP<\/em><\/a> (2025 ONSC 2223), the Ontario Superior Court of Justice (\u201cONSC<\/strong>\u201d) considered a party\u2019s application seeking to stay litigation in favour of arbitration. The Court denied the stay and permitted the litigation to proceed. The ONSC found that there was no valid arbitration agreement; it also determined that the party seeking the stay had taken steps in the same litigation and that it had unduly delayed bringing the stay application. The Court was clear that it would respect agreements to arbitrate, but would not allow a matter that was never subject to an arbitration agreement to proceed in the place of litigation, particularly ongoing litigation.<\/p>\n\n\n\n

In Zanin v. Ooma, Inc.<\/em><\/a> (2025 FC 51), the Federal Court of Canada considered an arbitration agreement in a motion to certify a class action relating to marketing of a voice-over-internet-protocol telecommunication service. The Court found that the underlying contract contained a valid arbitration agreement, and that the competence-competence principle applied. The Court noted that only in exceptional circumstances would it not enforce an otherwise valid arbitration agreement, and finding no such exceptional circumstances in the case at bar, staying the action in favour of arbitration. The Court was not persuaded by unconscionability arguments, signalling that although courts will consider such arguments (following the Supreme Court of Canada\u2019s decision in Uber Technologies Inc. v. Heller<\/em><\/a>, 2020 SCC 16), the competence-competence principle will continue to apply in cases where it is not impossible for the parties to arbitrate, which is a very high bar.<\/p>\n\n\n\n

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Courts Provide Clarification on Appeals of Arbitral Awards<\/strong><\/h2>\n\n\n\n

Canadian courts also considered whether and how arbitration awards may be appealed to courts.<\/p>\n\n\n\n

In\u00a02501373 Ontario Inc. et al. v. Selfe et al.<\/a><\/em>, 2025 ONSC 5216, the ONSC considered an application for leave to appeal an arbitral award. Under Ontario\u2019s\u00a0Arbitration Act, 1991<\/a>\u00a0<\/em>(SO 1991, c 17) where an arbitration agreement is silent on appeals, arbitral awards may be appealed on questions of law, with leave from the Court. The applicant argued that the terms of the arbitrator\u2019s appointment was the relevant arbitration agreement, and was silent on appeals on questions of law, and that it was therefore permitted to seek leave to appeal. The Court disagreed, finding the share purchase agreement, over which the parties were arbitrating,\u00a0was controlling, and expressly prohibited appeals.\u00a0Citing the high bar for leave underscored in a previous 2025 case from the same Court (Ontario Minister of Transportation v. Link 427 General Partnership<\/a><\/em>, 2025 ONSC 2375), the Court also found that even if appeals had not been precluded, it would not have granted the applicant leave because no truly extricable question of law had been identified.<\/p>\n\n\n\n

In\u00a0HZPC Americas Corp. v. Skye View Farms Ltd<\/em>.<\/a>, 2025 PESC 25, the Supreme Court of Prince Edward Island (\u201cPEISC<\/strong>\u201d) considered the issue of which province was the proper seat of an arbitration in an application to set aside or appeal an award. The parties had proceeded to arbitration without discussing the seat of arbitration. The arbitration occurred under the auspices of the Fruit & Vegetable Dispute Resolution Corporation, whose arbitration rules stipulated that the seat of arbitration was Ontario, unless otherwise agreed. The hearing physically took place in Prince Edward Island. In the set-aside proceeding, the PEISC considered whether it was the proper reviewing court. The Court found that it was not, as the arbitration agreement stipulated Ontario as the seat and that the decision to physically conduct the arbitration in Prince Edward Island did not displace that choice of seat. The\u00a0Ontario Arbitration Act 1991\u00a0<\/em>allows non-Ontario courts to intervene in some matters governed by the Act, but not in hearing applications to set aside or appeal awards, which must be brought in Ontario.<\/p>\n\n\n\n

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Canadian Courts Confirm High Bar for Setting Aside Arbitral Awards<\/strong><\/h2>\n\n\n\n

Two 2025 decisions from the ONSC highlight the high bar that courts apply for setting aside arbitral awards. <\/p>\n\n\n\n

In\u00a0The United Mexican States v. Gordon G. Burr<\/a><\/em>\u00a0(2025 ONSC 5724),<\/em>\u00a0the ONSC dismissed Mexico\u2019s application to set aside an international arbitral award over allegations of procedural unfairness and denial of natural justice based on the arbitral tribunal\u2019s refusal to order production of alleged \u201ckey documents\u201d and failing to expressly reference each argument of the losing party in the decision. The Court emphasized that it would only intervene \u201cwhen the Tribunal\u2019s conduct is so serious that it cannot be condoned\u201d and if the process offended \u201cour most basic notions of morality and justice\u201d (paragraph 75). Routine procedural decisions like the ones complained of do not meet this standard.\u00a0<\/p>\n\n\n\n

Similarly, in\u00a0Tehama Group Inc. v. Pythian Services Inc.<\/a>\u00a0<\/em>(2025 ONSC 4134), the ONSC refused to set aside an arbitral award based on allegations that the arbitrator\u2019s process was unfair or contrary to the parties\u2019 agreement. Pursuant to a previous decision of the Court (2024 ONSC 1819<\/a>), the arbitration was heard by the global accounting firm PwC in Toronto. The Court determined that a lack of certain procedural steps (such as sur-reply or cross-examination), accorded with the parties\u2019 agreed arbitration process, and did not meet the test to set aside under the\u00a0Model Law on Commercial Arbitration<\/em>, scheduled to the\u00a0International Commercial Arbitration Act, 2017<\/a>\u00a0<\/em>(S.O. 2017, c. 2, Sched. 5).<\/p>\n\n\n\n

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Ontario Courts Apply Objective Test for Reasonable Apprehension of Bias of an Arbitrator<\/strong><\/h2>\n\n\n\n

Two Ontario decisions considered the reasonable apprehension of bias. <\/p>\n\n\n\n

In\u00a0Vento Motorcycles Inc. v. Mexico<\/a><\/em>\u00a0(2025 ONCA 82<\/a>), the Court of Appeal for Ontario (\u201cONCA<\/strong>\u201d) held that a reasonable apprehension of bias by one member of a three-member tribunal \u201ctaints\u201d the process and justifies the set-aside of an arbitral award. In this case, undisclosed communications between Mexico\u2019s arbitrator nominee and government officials (which included professional advancement opportunities for the arbitrator) during an investor-state arbitration compromised the process\u2019s integrity. The ONCA overturned the lower-court decision, which denied set-aside where there was no bias issue in play with respect to two members of the tribunal. By contrast, the ONCA determined that impartiality is paramount and that neither the lack of direct financial gain by the subject arbitrator nor the presence of other unbiased tribunal members mitigates the taint of bias.\u00a0<\/p>\n\n\n\n

In\u00a0MTCC No. 1251 v. Windsor Arms Hotel Corp.<\/a><\/em>\u00a0(2025 ONSC 5009), the ONSC considered the importance of\u00a0how<\/em>arbitrators manage disclosure of conflicts of interest in arbitration proceedings. In this case, the arbitrator promptly disclosed a conflict arising from a business referral that he had received from an expert involved in the arbitration over which he presided. He indicated that he would not proceed with the arbitration unless all parties to the arbitration agreed to waive the conflict. He subsequently reversed position, stating that he would not recuse himself as arbitrator despite the absence of the waivers he had requested. He also continued to interact with the expert on the second matter and refused to disclose his emails with the expert to allow a party in the arbitration to assess the seriousness of the issue. The ONSC applied the objective test for assessing reasonable apprehension of bias set out by the ONCA in\u00a0Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc.<\/a><\/em>\u00a0(2024 ONCA 839), which focuses on what a reasonable and informed observer would conclude, and does not require proof of actual bias. The Court found that the combination of the referral and the arbitrator\u2019s subsequent conduct (including admitting then denying the conflict, withdrawing his offer to resign without full waivers, refusing disclosure, ongoing interaction with the expert, etc.), rather than the referral alone, created an environment where a reasonable person could question the impartiality of the arbitrator. Therefore, the Court granted the application and removed the arbitrator.<\/p>\n\n\n\n

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New ADRIC Arbitration Rules – Effective March 1, 2025<\/strong><\/h2>\n\n\n\n

The\u00a0Arbitration Rules of the ADR Institute of Canada<\/a>\u00a0(\u201cADRIC<\/strong>\u201d), which are commonly used in Canada, particularly in domestic disputes, were updated, effective March 1, 2025 (\u201c2025 Rules<\/strong>\u201d). Significant updates from the previous version of the rules (which had been in effect since\u00a0December 1, 2016<\/a>\u00a0(\u201c2016 Rules<\/strong>\u201d)) include:<\/p>\n\n\n\n