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A.1       Legislation

International arbitration in Canada is, for the most part, a matter of provincial jurisdiction. Each province and territory has enacted legislation adopting the UNCITRAL Model Law, occasionally with slight variations, as the foundational law for international arbitration. Canada’s federal parliament has also adopted a commercial arbitration code based on the UNCITRAL Model Law, which is applicable when the federal government or one of its agencies is a party to an arbitration agreement or where a matter involves an area of exclusive federal jurisdiction under Canada’s constitution. In addition, each of the provinces and the federal government have adopted the New York Convention.

Three Canadian provinces have adopted the 2006 amendments to the UNCITRAL Model Law, which offer a more flexible interpretation of some of the more rigid requirements of the New York Convention. In 2017, Ontario adopted the amendments to the International Commercial Arbitration Act (“Ontario ICAA“). British Columbia followed suit in 2018, amending its International Commercial Arbitration Act (“BC ICAA“). In 2023, Prince Edward Island amended its International Commercial Arbitration Act (“PEI ICAA“). Ontario and Prince Edward Island attached the UNCITRAL Model Law as a schedule to their acts, and British Columbia incorporated the 2006 amendments directly into the BC ICAA along with other developments, including a higher threshold to successfully challenge an arbitrator and broad powers for tribunals to grant interim measures and preliminary orders. In 2019, the Alberta Law Reform Institute recommended that Alberta adopt the 2006 amendments, but Alberta has yet to amend its act.

The legal framework for investor-state arbitration in Canada is evolving. Canada is a party to 38 bilateral investment treaties, known as Foreign Investment Promotion and Protection Agreements, which typically contain investor-state arbitration provisions. In May 2021, the Government of Canada revised its model BIT, the Foreign Investment Promotion and Protection Agreement Model.

On 1 July 2020, USMCA, the successor to NAFTA, came into effect. The USMCA limits investors’ ability to file investment arbitration disputes against member states. As of 30 June 2023, US and Mexican investors cannot file ISDS claims against Canada and vice versa. However, Mexico and the US have negotiated an annex allowing expropriation and nondiscrimination claims to be resolved by investment arbitration.

Canada is also a party to the Canada-European Union Comprehensive Economic Trade Agreement and the CPTPP, both of which contain provisions for investment arbitration. Although Canada did not sign on to the investor-state dispute settlement mechanism under USMCA, investor-state disputes between investors in Mexico and Canada may be brought under the CPTPP.

A.2       Institutions, rules and infrastructure

Canada remains a jurisdiction that strongly supports international arbitration, making major Canadian cities like Toronto, Vancouver, Calgary, Ottawa and Montreal a welcome “seat” of arbitration. Canadian organizations such as the Chartered Institute of Arbitrators Canada Branch, the Toronto Commercial Arbitration Society, the Western Canada Commercial Arbitration Society and Young Canadian Arbitration Practitioners are dedicated to the continued awareness and promotion of arbitration. Canada Arbitration Week takes place annually, bringing together practitioners, users of arbitration, institutions and other stakeholders to discuss important developments in the field.

Canada is distinct in having a dual heritage of common law and civil law (in the province of Québec). Canada offers highly regarded international arbitrators and experienced arbitration counsel. It has excellent hearing facilities, quality interpretation and translation services, modern and efficient transcription services and highly qualified experts. It also has a stable political system and reasonable visa entry requirements.

Local arbitration institutions in Canada include ADR Chambers, the ADR Institute of Canada, ICDR Canada and the Vancouver International Arbitration Centre. Canada has also attracted the presence of renowned international institutions that have partnered with Arbitration Place, a hearing venue with resident arbitrators in Toronto and Ottawa. These include the International Institute for Conflict Prevention and Resolution, ICDR, the ICC International Court of Arbitration, ICC Canada and the LCIA.

B.         CASES

B.1       Arbitrator disclosure obligations and reasonable apprehension of bias

In Aroma Franchise Company Inc. et al. v. Aroma Espresso Bar Canada Inc. et al.,[1] the Ontario Superior Court (ONSC) set aside arbitral awards on the basis of reasonable apprehension of bias after the arbitrator failed to disclose an engagement he accepted from the lead counsel for the successful parties midway through the arbitration process.[2]

B.1.1    Background

A dispute arose between Aroma Espresso Bar Canada Inc., along with three other respondents (together, “Respondents“), and Aroma Franchise Company Inc., along with six other applicants (together, “Applicants“), concerning, among other things, termination of a master franchise agreement (MFA). The arbitration agreement in the MFA stated in part:

The parties shall jointly select one (1) neutral arbitrator from the panel of arbitrators maintained by the ADR Institute. The arbitrator must be either a retired judge, or a lawyer experienced in the practice of franchise law, who has no prior social, business or professional relationship with either party.[3]

In correspondence between counsel, relationships between arbitral candidates and counsel had been identified at the outset as an issue of concern to both sides. One candidate proposed by counsel for the Respondents was rejected because his office had been unilaterally contacted by that counsel. Another was rejected because of past engagements by counsel for the Respondents. After establishing that no such prior engagements by either side existed for another candidate, P. David McCutcheon, the parties appointed him as arbitrator (“Arbitrator“). The arbitration spanned over two years.

A few days before releasing his final award, the Arbitrator emailed the parties to advise that he had completed it and that it would be delivered upon his receipt of an additional payment from the parties. In his email, the Arbitrator inadvertently copied a lawyer (Mr. Hamson) at the Respondent’s law firm, who had not been involved in the Aroma arbitration, omitting others who had been involved. Counsel for the Applicants replied to this email from the Arbitrator, copying opposing counsel, and inquired as to why Mr. Hamson had been included but not the others. Counsel for the Respondents responded without addressing Mr. Hamson’s inclusion. The Arbitrator did not respond.[4]

The Arbitrator delivered the final award on 11 January 2022 (which strongly favored the Respondents and ordered the Applicants to pay in excess of CAD 10 million. The Arbitrator again copied Mr. Hamson.[5] On 13 January 2022, the Applicants again inquired as to why Mr. Hamson had been copied by the Arbitrator, specifically asking why he was copied, including whether there is or has been any other relationship of any kind between the Arbitrator and Mr. Hamson’s firm, including any other appointments as arbitrator or mediator.[6] The Arbitrator initially responded without addressing those questions before eventually admitting that he had indeed been engaged by the Respondent’s firm as the sole arbitrator in another matter 15 months prior and 17 months after the Aroma arbitration was commenced (“Undisclosed Engagement“).[7] The Arbitrator admitted that he had not considered the IBA Guidelines and did not address follow-up questions inquiring whether he had some reason to believe that Mr. Hamson would be involved in the matter going forward. The Applicants advised that they would seek to set aside the final award and challenged the Arbitrator to withdraw. He declined, without addressing the substantive arguments raised on the challenge, and proceeded to make a further award in favor of the Respondents worth in excess of CAD 2 million for interest and costs.

B.1.2    Analysis

The Application to set aside the awards was heard in January 2023 by Madam Justice Steele of the ONSC. As the arbitration was seated in Ontario, the court applied the UNCITRAL Model Law (as adopted in theOntario International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (ICCA)). Per Article 34(2)(a)(iv) of the UNCITRAL Model Law, a court may set aside an award as follows:

The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law[8]

Pursuant to Article 18 of the UNCITRAL Model Law, these circumstances include where an arbitrator’s conduct gives rise to a reasonable apprehension of bias/justifiable doubts as to their impartiality or independence.[9] Article 18 requires that “[t]he parties shall be treated with equality and each party shall be given a full opportunity of presenting his case.”[10]

The court also relied on Article 12 of the UNCITRAL Model Lawand various provisions of the IBA Guidelines on Conflicts of Interest in International Arbitration, which the court held “are widely recognized as an authoritative source of information as to how the international arbitration community may regard particular fact situations in reasonable apprehension of bias cases.”[11]

Justice Steele distinguished between actual bias and reasonable apprehension of bias and highlighted that such an inquiry is highly fact-specific and that “context matters.”[12] She zeroed in on a key question involving the decision of the lead counsel for the Respondents (Mr. Dick) to engage the Arbitrator in the Undisclosed Engagement: “With all the commercial arbitrators in Toronto, why was it necessary that this Arbitrator be retained on the [Undisclosed] Engagement while the Aroma arbitration was ongoing?” She concluded that “[i]t is a bad look that mid-way through the Aroma arbitration, where Mr. Dick is the lead partner, the Arbitrator is retained on another matter in respect of which Mr. Dick is the lead partner.”[13] She also noted: “[F]rom cross-examinations of Mr. Dick, he certainly expected that if an arbitrator was engaged by a party or counsel prior to, or at the time of, his or her engagement that would have been disclosed. The obvious rhetorical question flows from this — If it was necessary to disclose an engagement of an arbitrator prior to engaging him or her, why would it not be required to disclose an engagement of the arbitrator by the same lawyer on another matter while the arbitration is extant?”[14]

The court established that there was a reasonable apprehension of bias and set aside the arbitral awards. In addition to relying on the UNCITRAL Model Law and IBA Guidelines, the court relied on the MFA,[15] the pre-appointment correspondence highlighting the importance to the parties that the selected arbitrator not have a professional or personal relationship with either party or their counsel,[16] the fact that the Arbitrator was a sole arbitrator and, accordingly, controlled the outcome,[17] and the fact that the Undisclosed Engagement was hidden from the Applicants for 15 months while the Aroma arbitration was ongoing.[18] The court also found that the Arbitrator deprived the parties of the opportunity to address an issue as to whether one of the Respondents was a proper party to the arbitration and, accordingly, there was a breach of procedural fairness and natural justice contrary to Article 34(2)(a)(ii) of the UNCITRAL Model Law.

B.1.3    Significance

Aroma has provided important guidance and practical implications for parties, counsel and arbitrators regarding disclosure obligations during an arbitration. The Ontario Court of Appeal heard the appeal of the ONSC’s decision on 6 December 2023. This case will remain important to watch as the legal community awaits the release of the Ontario Court of Appeal’s decision.

B.2       Reasonable apprehension of bias involving a party appointee

In Vento Motorcycles, Inc. v. United Mexican States[19] (“Vento v. Mexico“),decided seven months after Aroma, a different judge of the ONSC found reasonable apprehension of bias in relation to an arbitrator appointed by Mexico in an arbitration under the ICSID Additional Facility Rules. However, unusually, the judge exercised her discretion and opted not to set aside the award rendered in favor of Mexico (“Award“).

B.2.1    Background

Vento Motorcycles Inc. (“Vento“), a Texas company, filed a NAFTA claim[20] alleging that Mexico had wrongly applied certain tariffs to its products. A three-member tribunal, including Mr. Hugo Perezcano, appointed by Mexico, held that Mexico did not breach its obligations under NAFTA and dismissed the claim. After the Award was released, Vento learned that Mexico’s lead counsel, Mr. Perez, had undisclosed communications with Mr. Perezcano during the arbitration. Mr. Perez requested Mr. Perezcano’s CV so that Mexico could nominate Mr. Perezcano as a candidate for panels of arbitrators under two different trade agreements. These communications were not disclosed to Vento, which relied on these facts, among others, in seeking to set aside the Award.

B.2.2    Analysis

Relying on Article 34(2)(iv)[21] and Articles 12 and 18 of the UNCITRAL Model Law,[22] Vento contended that the reasonable apprehension of bias arose not only from the undisclosed ex parte communications themselves but from the fact that they concerned prestigious and potentially lucrative appointments, which were awarded to Mr. Perezcano during key phases of the arbitration without being disclosed. Vento submitted that the apprehension of bias is compounded by the fact that Vento had to “fight to obtain disclosure of the communications, which neither Mr. Perezcano nor Mexico disclosed in a forthright manner.” Vento also submitted that “the reasonable apprehension of bias is further compounded by the fact that Mr. Perezcano appears to have written the lion’s share of the award.”[23]

The court held that the conduct of Mr. Perezcano gave rise to a reasonable apprehension of bias:[24]

[A]n informed person, viewing the matter realistically and practically, would conclude that it is more likely than not that Mr. Perezcano, whether consciously or unconsciously, would have “a leaning, inclination bent or predisposition towards” Mexico, or that he could be influenced by factors other than the merits of the case as presented by the parties in reaching his decision.[25]

However, the court chose to exercise its discretion under Article 34(2) not to set aside the Award.[26] In its analysis, the court distinguished Aroma, noting:

… the context of this case is different from the context in Aroma. Among other things, the Award was made by three arbitrators instead of one, and the parties did not have the same concerns as in Aroma regarding prior relationships between the arbitrators and the parties or their counsel.[27]

In making this determination, the court considered the following question: “What did the procedural error do to the reliability of the result, or to the fairness, or the appearance of fairness of the process?”[28] These procedural errors must produce a “real unfairness or real practical injustice.”[29]

In what appears to be an unprecedented result for a case in which reasonable apprehension of bias is established, the court ultimately held that because Mr. Perezcano was part of a three-arbitrator panel, the entirety of the Award was not tainted.[30] However, it appears that Mr. Perezcano spent substantially more time on the matter than the other two arbitrators, suggesting he wrote the majority of the Award. Nonetheless, the court declined to find that the other two arbitrators were not involved in the drafting and passively accepted Mr. Perezcano’s views. Doing so “would be contrary to the strong presumption of impartiality and independence that applies with respect to Professor Gantz and Dr. Sureda.”[31] Moreover, the court concluded that it would be prejudicial if the arbitration had to be redone.[32]

B.2.3    Significance

Similar to Aroma, Vento v. Mexico demonstrates the highly fact-specific inquiry conducted by reviewing courts on a set-aside application. Vento v. Mexico is currently pending an appeal before the Ontario Court of Appeal.

B. 3      No appeal from arbitration award that is “finally settled”

In Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C.[33] (“Baffinland“), the Ontario Court of Appeal confirmed that no appeals are available where the arbitration agreement establishes that disputes are to be “finally settled” by arbitration. While the arbitration award was governed by Ontario’s domestic Arbitration Act,[34] the parties agreed that all disputes shall be settled under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules“), which informed the result.

B.3.1    Background

The parties, Baffinland Iron Mines (BIM) and Tower-EBC (TEBC) entered into two nearly identical construction contracts.[35] The dispute resolution provisions provided three options to resolve disputes:

  1. The parties could refer the disputes to a Dispute Adjudication Board (DAB), under which the DAB’s decision would be “final and binding.”
  2. The dispute could be settled amicably.
  3. If a dispute was not the subject of a final and binding DAB decision and has not been settled amicably, the dispute would be “finally settled” by international arbitration in accordance with the ICC Rules.[36]

Through adopting the ICC Rules, the parties incorporated ICC Rule 35(6) into the contracts, which provides:

Every award shall be binding on the parties. By submitting the dispute to arbitration under the Rules, the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.[37]

Upon receiving the final award, BIM sought leave to appeal on a question of law.[38] Per the Domestic Arbitration Act, appeals on questions of law may occur if the arbitration agreement expressly so provides or with leave of the court.[39] Appeals are precluded where the agreement expressly bars them. Thus, the issue before the application judge was whether the language that a dispute would be “finally settled” by international arbitration precluded appeals.

B.3.3    Application judge’s decision

The application judge held that the parties had contracted out of all rights of appeal, given that the contract referred to disputes being finally settled by arbitration and incorporation of ICC Rule 35(6). The application judge also rejected the argument that since the contracts used the term “final and binding” in relation to DAB decisions but used the phrase “finally settled” in relation to arbitration, the parties must have intended a different meaning for the latter.

B.3.4    Court of Appeal

On appeal, BIM argued that the application judge incorrectly applied the presumption of consistent expression. The presumption is that language in a contract is used consistently with the same words meaning the same thing and, by corollary, using different words indicating an intention to refer to different things. In using the words “final and binding” when referring to decisions of the DAB and using the term “finally settled” for arbitration, BIM argued that “finally settled” must have a different meaning, such that it allows an appeal.

The Court of Appeal dismissed this argument and held that the presumption of consistent expression does not overwhelm the ordinary and grammatical meaning of the text, and that there is more than one way to state that appeals are precluded. The plain meaning of “finally settled” in the context of the contract clearly means that there is no further recourse by way of appeal in the same way as “final and binding would. Further, reading the provision in hand with ICC Rule 35(6), under which parties waive the right to any further recourse, it is clear that appeals are precluded.

B.3.5    Significance

Baffinland confirms the willingness of Ontario courts to respect party agreement as to the conduct of an arbitration. It also highlights the importance of carefully selecting the applicable arbitration rules.

B.4       Fresh evidence may be admitted on appeals from jurisdictional awards

In Russian Federation v. Luxtona,[40] the Ontario Court of Appeal held that parties may introduce fresh evidence on a set-aside application under the UNCITRAL Model Law, enacted in Ontario as Schedule 2 to the ICAA.

B.4.1    Background

Luxtona Limited (“Luxtona“) alleged that the Russian Federation (“Russia“) breached its rights pursuant to the Energy Charter Treaty[41] and commenced an arbitration seated in Toronto. Russia unsuccessfully challenged the arbitral tribunal’s jurisdiction over Luxtona’s claims.

Russia applied to the Ontario Superior Court to set aside the arbitral tribunal’s decision on jurisdiction on the basis of Articles 16(3) and 34(2) of the UNCITRAL Model Law. On the set-aside application, Russia filed fresh evidence that had not been put before the arbitral tribunal, to which Luxtona objected. In the first instance, the court held that Russia could not file new evidence as of right. On the initial appeal, the Divisional Court disagreed. Luxtona then appealed the matter to the Ontario Court of Appeal.

B.4.2    Analysis

Luxtona argued that kompetenz-kompetenz requires that parties put as much of the record before the tribunal as possible in order to enable the tribunal to rule on its own jurisdiction.

The Court of Appeal disagreed and held that kompetenz-kompetenz only goes as far as to provide the tribunal with the first opportunity to resolve questions as to its jurisdiction. Further, citing the “weight of international authority” and the UK Supreme Court in Dallah,[42] the court held that kompetenz-kompetenz does not restrict the fact-finding powers of a court assessing a tribunal’s jurisdiction. In other words, “an application to set aside an arbitral award for lack of jurisdiction is a proceeding de novo, not a review of or appeal from the tribunal’s decision.[43]

However, the court also cautioned that parties should not be encouraged “to seek two evidential bites of the cherry, and that a failure of a party to raise evidence before the tribunal may be relevant as to the weight of that evidence before a reviewing court.[44]

B.4.3    Significance

The Ontario Court of Appeal in Luxtona has confirmed that there is strong international consensus in favor of a de novo hearing as it pertains to the court’s role in assessing the jurisdiction of arbitral tribunals. However, parties should be wary of introducing new evidence, as the court still retains the power to limit the weight of such evidence.

The authors thank articling student Ravneet Minhas for her valuable contributions to this chapter.

[1] Aroma Franchise Company Inc. et al. v. Aroma Espresso Bar Canada Inc. et al., 2023 ONSC 1827. Authors Matthew Latella and Praniet Chopra represent Aroma Franchise Company on this matter.

[2]Matthew Latella and Praniet Chopra acted as counsel on behalf of the applicants.

[3] Aroma, supra note 2 at para 7.

[4] Ibid, at para 11.

[5] Ibid, at para 12.

[6] Ibid, at para 13.

[7] Ibid, at para 14.

[8] Ibid, at para 22.

[9] Ibid, at para 29.

[10] Ibid.

[11] Ibid, at para 33.

[12] Ibid, at paras 71 and 79.

[13] Ibid, at para 87.

[14] Ibid, at para 48.

[15] Ibid, at para 40.

[16] Ibid, at para 41.

[17] Ibid, at para 55.

[18] Ibid, at para 90.

[19] Vento Motorcycles, Inc. v. United Mexican States, 2023 ONSC 5964 [Vento].

[20] Vento Motorcycles, Inc. v. United Mexican States, ICSID Case No. ARB(AF)/17/3.

[21] Article 13 of the ICSID Rules requires that an arbitrator, before or at the first session of the arbitral tribunal, provide a statement of: (a) the arbitrator’s past and present professional, business and other relationships (if any) with the parties; and (b) any other circumstance that might cause the arbitrator’s reliability for independent judgment to be questioned by a party. The arbitrator is also required to sign a declaration that, among other things, acknowledges the arbitrator’s continuing obligation to notify the Secretary-General of the ICSID promptly of any relationship with the parties or any circumstance that arises during the proceeding and that might cause the arbitrator’s reliability for independent judgment to be questioned by a party.

[22] Vento, supra note 26 at para 47.

[23] Ibid, at para 95

[24] Ibid, at para 117.

[25] Ibid, at para 120

[26] Ibid, at para 123.

[27] Ibid, at para 111.

[28] Ibid. 

[29] Ibid.

[30] Ibid, at para 124.

[31] Ibid, at para 126.

[32] Ibid, at para 131.

[33] Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245 [Baffinland].

[34] Arbitration Act, 1991, S.O. 1991, c. 17 [Arbitration Act].

[35] Baffinland, supra note 45 at para 10.

[36] Ibid, at para 12.

[37] Ibid, at para 13.

[38] Ontario’s domestic Arbitration Act allows for appeals on questions of law in two circumstances: 1) if the arbitration agreement expressly provides for appeals; and 2) if the agreement is silent, an appeal may be granted with leave.

[39] Arbitration Act, at s. 45(1).

[40] Russian Federation v. Luxtona Limited, 2023 ONCA 393 [Luxtona].

[41] Energy Charter Treaty, 17 December 1994, 2080 U.N.T.S. 95.

[42] Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan, [2010] UKSC 46.

[43] Luxtona, supra note 52 at para 40.

[44]Ibid, at para 42.


Matthew Latella is a senior partner in Baker McKenzie's Toronto office and head of the Firm's Canadian International Arbitration Practice. He has been lead counsel on several of the leading Canadian court cases involving international arbitration, successfully arguing precedent-setting cases up to the Supreme Court of Canada. He has been recognized as an "outstanding professional" by the Legal 500 Canada in Dispute Resolution and is described by clients as "a brilliant advocate and cross-examiner." One client stated: "Matthew is adept at identifying and nailing the core issues to a successful conclusion. I've seen him simply out-work and out-strategize opposing counsel." He frequently litigates and arbitrates multijurisdictional disputes, including groundbreaking asset recovery and enforcement matters.


Christina Doria co-chairs Baker McKenzie's North American International Arbitration Group and is a steering committee member of the Firm's Global Arbitration Group. Among other rankings, she is recognized by Who's Who Legal (WWL) Canada - Arbitration as a national leader and by WWL Arbitration as a Future Leader. She has been praised for her "[e]xtraordinarily strong counsel skills and an excellent command of international arbitration practice." Christina has served as an arbitrator and has acted on commercial arbitrations under UNCITRAL, AAA/ICDR, BCICAC, ADRIC and CPR rules, as well as on investor-state arbitrations under ICSID, UNCITRAL and NAFTA.


Brendan O'Grady is a senior associate advising on complex commercial arbitration and litigation. He is a member of Baker McKenzie's North American Litigation & Government Enforcement Practice Group in Toronto. Brendan has represented Fortune 500, state-owned and private companies in high-stakes litigation, class actions, and international commercial arbitrations in Canada and around the world. He is recognized by Chambers & Partners (2024) among the top commercial arbitration practitioners in Canada, and he is the sole recipient of the Lexology Client Choice Award (2024) for commercial arbitration in Canada. Both distinctions are based on client feedback, including: "He is a fantastic attorney—he is whip-smart, has a very high IQ and is great in high-pressure situations" (Chambers 2024) and "Working with Brendan O'Grady has enabled us to win difficult cases where the outcome was not certain." (Lexology 2024)


Praniet Chopra is a mid-level associate in Baker McKenzie's North American Litigation & Government Enforcement Practice Group in Toronto. She has a strong track record advising and representing clients in complex commercial litigation and arbitration matters. She is fluent in English, Hindi and Punjabi. Praniet has been recognized by Best Lawyers as "One to Watch."