Appealing Arbitral Awards—A New Option Outside the Courts

An arbitration conducted by an experienced, skilled arbitrator using effective rules of procedure can reach a binding resolution with confidentiality, flexibility and efficiency—and at reduced cost. However, even arbitral awards made in British Columbia can be appealed to the courts, albeit on limited grounds.

While finality is an attractive aspect of arbitration, in some instances even the limited opportunity to appeal an award may be a welcome option to a seriously aggrieved losing party. Or both disputing parties may recognize—in advance of an arbitration—that the legal issues in the dispute are so important to their businesses or ongoing relationship that the right to appeal a flawed award offers significant comfort.

An appeal of an arbitration to the courts can cause significant delay and cost. By way of example, a recent B.C. arbitral award, Teal Cedar Products Ltd. v. British Columbia, wended its way back and forth through our appellate courts—taking six long years from the date of the arbitral award until final confirmation of the arbitrator’s award by the Supreme Court of Canada.

This example illustrates the kind of frustration and consternation some parties and their legal counsel have experienced looking to benefit from a final, binding arbitral award but, instead, ended up in a long, judicial appeal process, much as they could have in litigation.

To quell these concerns, retain the benefits of arbitration, and provide additional value to its clients, the British Columbia International Commercial Arbitration Centre revised its Domestic Commercial Arbitration Rules of Procedure, effective September 15, 2016. The purpose was to provide a new process which the centre’s clients can use to appeal an arbitral award to a tribunal. The three-member appeal tribunal will be appointed by the centre from its panel of skilled, experienced arbitrators, several of whom are distinguished retired judges.

By having the BCICAC administer the arbitration under its rules, the parties may be able to define the scope of any appeal of an arbitral award at the time they enter into a commercial agreement, allowing the process to remain private and confidential.

Parties entering into new commercial agreements containing arbitration clauses may wish to consider whether and how they access this new arbitral appeal process. Intentions should be carefully worded to leave open any options they wish to have in future, and to help to avoid the costs and delay of going to court.

As for those with existing arbitration clauses in their commercial agreements, it may still be possible for the parties to access the BCICAC’s arbitration appeal services by having the centre administer their arbitration under its rules.

Hopefully, this new arbitral appeal process will assist businesses to continue to reduce the time and costs associated with resolving their business disputes while retaining the ability to challenge any arbitral award that is seriously flawed.

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