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Alberta Court of King’s Bench Applies Reasoning from Vavilov: Esfahani v. Samimi, 2022 ABKB 795

1. Why this case matters:

Esfahani v. Samimi[1] is a recent decision from the Alberta Court of King’s Bench examining the standard of review applicable to appeals of arbitration awards brought pursuant to section 44 of the Alberta Arbitration Act (the “Act”). [2] This decision engages in the ongoing debate over whether the standard of review framework in Canada (Minister of Citizenship and Immigration) v. Vavilov[3] applies to statutorily governed appeals for private commercial arbitration.

In a departure from previous decisions, Justice Marion found that Sattva Capital Corp. v. Creston Moly Corp.[4]and Teal Cedar Products Ltd. v. British Columbia[5] are persuasive but not binding on courts in Alberta, due to the specific characteristics of the Act and the development of the case law in Alberta on standard of review. Further, the Court found the approach in Vavilov that utilizes the appellate standard of review applied to appeals of commercial arbitrations brought pursuant to section 44 of the Act.

2. Background

Following the breakdown of their marriage, Esfahani and Samimi sought to resolve their child support and division of matrimonial property matters through binding arbitration under the Act, pursuant to a Mediation/Arbitration Agreement dated August 2019. A number of procedural decisions and directions were made by the arbitrator before and during the arbitration. A Final Award was issued on October 19, 2020 and an Amended Final Arbitration Award was issued on December 11, 2020, followed by a Costs Award in 2021.

In 2021, Samimi filed an appeal pursuant to section 44(1) of the Act seeking to set aside the determinations made within the various arbitral awards and procedural awards. Samimi did not appeal pursuant to section 45 of the Act.

3. Issues

Although the Alberta Court of King’s Bench addressed several issues in relation to the division of the property itself and a re-evaluation of the division was undertaken, this post focuses on the procedural or foundational issues faced by the court, which included:

  1. What is the appropriate standard of review of an arbitrator’s decision under section 44 of the Act?
  2. Can allegations of breaches of procedural fairness or natural justice be relied upon in section 44 appeals?
  3. What is the appropriate record before the court on appeal under section 44 of the Act?

4. Standard of Review

Statutory Interpretation

Justice Marion confirmed the objective of the Alberta arbitration legislation was to provide a faster and more efficient dispute resolution process, with the role of the courts being one of non-intervention.[6] He also highlighted several aspects of the Act that foster the benefits and purposes of arbitration (i.e., efficiency, speed, finality, and party autonomy) including the appeal provisions, which provide a non-consensual appeal right (with leave) to ensure that arbitration awards are not “wrong in law”, and an appeal right to ensure that arbitrations are not based on factual errors, if the parties agree to that.

He also held that nothing in the text of the Act limited its use to commercial arbitrations and the Act broadly applies to any “arbitration agreement”. Importantly, he found that for some parties to arbitration—who could include families, not-for-profit organizations, educational institutions, and athletes—the motivation to arbitrate may be different than for a commercial party, and “the correct application of the law may be more important”.[7] He concluded that this broad applicability, the use of the word “appeal”, and the provisions in the Act that prohibit parties from excluding the court from having jurisdiction to interfere on questions of law, supported the application of an appellate standard of review [8] 

Sattva and Teal Cedar Are Not Binding in Alberta

Sattva and Teal Cedar both came before the Supreme Court of Canada on appeal from the British Columbia Court of Appeal. 

Justice Marion acknowledged that many Canadian courts, including the Alberta Court of King’s Bench, have applied the deferential standard of review articulated in Sattva and Teal Cedar in respect of appeals of arbitration awards without considering the impact of specific (and different) provincial legislation.[9] He expressed skepticism about whether Sattva and Teal Cedar were ever binding in Alberta, because the Alberta Court of Appeal had not directly considered the standard of review under section 44 of the Act, post-Sattva.[10]

In concluding that Sattva and Teal Cedar were not and are not binding in Alberta, and only highly persuasive, Justice Marion found that:

(a) Sattva and Teal Cedar were limited to the interpretation of the 1996 British Columbia arbitration legislation (the “1996 BC Act”), and all generalized statements made by the Supreme Court of Canada must be viewed in that light;

(b) It cannot be assumed that the legislative intent between the Act and the 1996 BC Act is the same;

(c) The standard of review for questions of fact and mixed fact and law were not before the Supreme Court of Canada in Sattva and Teal Cedar but they are at issue in the question of the standard of review applicable to appeals pursuant to section 44 of the Act; and

(d) Sattva and Teal Cedar appear to be applicable only to commercial arbitration (which was the focus of the 1996 BC Act) but does not consider the many different types of arbitrations that are governed by the Alberta Act.[11]

The SCC’s Reasoning in Vavilov Applies to Statutory Right of Appeal

Justice Marion thoroughly canvassed the current state of the law finding that the only appellate decision directly addressing the standard of review in an appeal from a non-statutorily mandated arbitration, post-Vavilov, is Northland Utilities (NWT) Limited v Hay River (Town of).[12]

In all of the circumstances, and in light of neither appellate authority from the Alberta Court of Appeal nor consistent findings from the Court of King’s Bench, Justice Marion found that he could not ignore the strong statements in Vavilov pertaining to the legislative intent associated with the Legislature’s choice to create a statutory appeal in the Act.[13] Justice Marion ruled that the Court’s reasoning in Vavilov applies to any statutory appeal right, including appeals of an arbitration award. Further, the Court held that the appellate standard of review does not undermine the purpose of the Act, but rather that the context and legislative history is consistent with the presumption of consistent expression and the desire of the Legislature to create an appellant standard of review.[14]

5. Procedural Fairness or Natural Justice

Interestingly, Samimi appealed under only section 44 of the Act, while raising procedural fairness and natural justice issues (normally raised in the context of section 45). Additionally, in arguing the arbitrator failed to meet the required procedural fairness, Samimi relied on the procedural decisions that were made prior to the hearing, which had never been appealed. Esfahani argued that Samimi was precluded from arguing an absence of procedural fairness in relation to the procedural decisions which he failed to appeal.

Justice Marion conducted a thorough review of the case law in Alberta, finding that while section 44 and 45 generally serve different purposes, allegations that an arbitrator breached principles of natural justice, failed to provide appropriate procedural fairness, or breached section 19 of the Act, all give rise to questions or law which can be appealed through section 44 of the Act.

Further, Justice Marion found that procedural determinations or directions are not interim or final “awards” under the Act. Therefore, they cannot independently be the subject of an appeal under Section 44 or section 45. Because Samimi did not have the right, nor the obligation, to appeal earlier procedural rulings he was entitled to rely on the Arbitrator’s procedural decisions to challenge the procedural fairness of the arbitration generally.

6. Appropriate Record for Appeal under Section 44

Neither the Act nor the Alberta Rules of Court expressly describe what the appeal record must contain for an arbitration appeal. Justice Marion found that an arbitration appeal is not a trial de novo and should be considered on the same basis that an appeal from a judgment of the Court of King’s Bench to the Court of Appeal.

7. Conclusion

This decision presents a unique approach to the standard of review issue by suggesting that the applicable standard of review may be different by jurisdiction and will depend on a fulsome analysis of each province’s respective arbitration legislation. The decision adopts the reasoning from Vavilov and Northland to support the principle that appeals should mean the same in the commercial context as they do in the administrative law context where both appeals are governed by the same legislation.

[1]Esfahani v Samimi, 2022 ABKB 795 [Esfahani].

[2]Arbitration Act, RSA 2000 c A-43

[3]Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 [Vavilov].

[4]Sattva Capital Corp. v. Creston Moly Corp. 2014 SCC 53 [Sattva].

[5]Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 [Teal].

[6]Esfahani at paras. 32-34.

[7]Esfahani at para. 53.

[8]Esfahani at para. 54.

[9]Esfahani at para. 63.

[10]Esfahani at para. 65.

[11]Esfahani at paras. 66-67.

[12]Esfahani at paras. 70-74; Northland Utilities (NWT) Limited v Hay River (Town of), 2021 NWTCA 1 [Northland].

[13]Esfahani at paras. 76-77.

[14]Esfahani at paras. 78-84.

arbitration Arbitration awards arbitration agreement commercial arbitration standard of review



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