The Ontario Court of Appeal recently confirmed the proper appeal procedure for an arbitrator’s ruling on a preliminary question in an arbitration.
Joseph Lebovic Charitable Foundation v. Jewish Foundation of Greater Toronto, 2024 ONCA 933, concerned an appeal of an application decision. The application judge was asked to review a ruling from the parties’ arbitrator on his own jurisdiction to hear the issues before him, which was upheld. We invite you to read our firm’s blog on the application judge’s decision for more information.
The applicants sought leave to appeal the application judge’s decision to the Ontario Court of Appeal. The respondents brought a motion to quash this appeal on the basis that the Court of Appeal’s jurisdiction to hear it was precluded by section 17(9) of the Arbitration Act 1991, S.O. 1991, c. 17 (the “Act”).
The Court of Appeal agreed with the respondents and quashed the applicants’ appeal. Its reasons for this decision highlighted a key distinction in s. 17 of the Act: whether an objection was ruled on as a “preliminary question” by an arbitrator, or whether it was dealt with as part of a final award:
We agree with the [respondents]. It is plain from s. 17(9) of the Arbitration Act 1991, S.O. 1991, c. 17, that there is no appeal from the application judge’s decision. Section 17(8) provides that: “If the arbitral tribunal rules on an objection as a preliminary question, a party may, within thirty days after receiving notice of the ruling, make an application to the court to decide the matter.” Section 17(9) states: “There is no appeal from the court’s decision” (emphasis added).
We do not accept the [applicants’] argument that the arbitrator’s jurisdiction decision was not a ruling “on an objection as a preliminary question” and therefore that it was not made under s. 17(8) of the Arbitration Act, 1991. It is evident that the issue of jurisdiction was argued as a preliminary question before the arbitrator; he did not wait to deal with this issue in the award, but instead issued a separate, preliminary ruling…
Moreover, the [applicants] treated the jurisdiction decision as a ruling on a preliminary question by bringing a stand-alone application to review the arbitrator’s jurisdiction decision, and a separate application in respect of the arbitrator’s July 27, 2023 award. In the circumstances, we have no doubt that the application to review the arbitrator’s jurisdiction decision was brought under s. 17 (8) of the Arbitration Act 1991, and that any appeal from the application judge’s order is precluded by s. 17(9).” [insertions added. citations omitted.]
Parties who wish to appeal an arbitrator’s decision on an objection should first consider whether the arbitrator dealt with the objection as a preliminary question, or as part of a final award. In addition to the limitation period considerations arising from s. 17(8), appealing an application judge’s review of a preliminary question’s ruling to the Ontario Court of Appeal may not be available. Parties who improperly commence such an appeal could open themselves up to cost consequences for doing so.
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