Standard of Review of Arbitration Awards: Buffalo Point First Nation v Buffalo Point Cottage Owners Association Inc, 2025 MBCA 72

Readers will know that one of the unresolved questions still lingering post-Vavilov is the standard of review applicable to appeals of arbitration awards (see Part III here and also here). This is a subtly difficult question. Prior to Vavilov, the Supreme Court of Canada had held that the judicial review framework applies to arbitration appeals: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 established reasonableness as the presumptive standard with Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 SCR 23 applying correctness to a question of precedential value, namely the interpretation of standard-form contracts. In Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, [2017] 1 SCR 688, the Supreme Court reaffirmed Sattva again, a majority holding that the reasonableness standard should generally be applied to questions of law determined by arbitrators.

But it is not obvious (1) that any judicial framework should apply to arbitration appeals, because they are less the exercise of public power than a dispute resolution mechanism chosen by parties pursuant to the principle of private ordering (see Plotkin and Mancini); (2) that the Vavilov framework is a good fit, because its narrower correctness categories do not map neatly onto the correctness categories that might apply in the arbitration context; or (3) that Vavilov itself requires anything other than the application of appellate standards of review to an “appeal”.

That said, the question is not mentioned at all in Vavilov and one might legitimately therefore observe that until the Supreme Court itself has clarified the state of the law, lower courts are bound to the pre-Vavilov position that the same framework applies on arbitration appeals as on judicial review. On the only occasion since Vavilov that the question has arisen in one of its own cases, a majority of the Supreme Court avoided answering it (Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7).

Now there is a split in the (limited) appellate authority on the question. Previously, the Court of Appeal for the Northwest Territories concluded that the appellate standards of review should apply: Northland Utilities (NWT) Limited v. Hay River (Town of), 2021 NWTCA 1. Now the Manitoba Court of Appeal has weighed in on the side of the judicial review framework: Buffalo Point First Nation v. Buffalo Point Cottage Owners Association Inc, 2025 MBCA 72.

Monnin JA’s analysis is sharp and to the point.

First, Vavilov did not overrule Sattva and, therefore, the judicial review framework continues to apply:

I start from the premise that Vavilov did not expressly or impliedly overturn Sattva or Teal Cedar.  Vavilov was a decision with respect to a review of an administrative decision.  Commercial arbitration awards are not administrative decisions, which are generally recognized as decisions emanating from a government entity.  Commercial arbitration awards are the product of contractual agreements between parties who have chosen to reach a resolution of their own making.  While there may be merit in considering the rationale of how to review an administrative decision when considering the review of decisions of commercial arbitrators, that was not the issue in Vavilov.  It was, however, the issue in Sattva and Teal Cedar and, until a different outcome is stipulated by the Supreme Court, I am of the view that stare decisis should guide us in reaching the proper conclusion as to what standard of review currently applies.  Accordingly, the surest route to the answer to this question is that Sattva and Teal Cedar are still good law until directed otherwise.

I am reinforced in that conclusion by the comments of Kasirer J in Wastech, to the effect that, even though the issue was raised with the Court in Vavilov by counsel for arbitrators who filed briefs, the Court, in its wisdom, chose not to deal with the precedents of Teal Cedar and Sattva.  In my view, it does not “[cut] both ways”, as suggested in Northland (at para 36).  Unless specifically or impliedly overturned, the previous decisions remain and the failure to address it by the Court should not be used as a means of invalidating precedent.  Commercial arbitration awards take place “under a tightly defined regime specifically tailored to the objectives of commercial arbitrations” (Sattva at para 104).  As well, “parties engage in arbitration by mutual choice, not by way of a statutory process” (ibid).  The parties to an arbitration select the number and identity of the arbitrators.  In Teal Cedar, this was described as being a “preference for a reasonableness standard . . .  with the key policy objectives of commercial arbitration, namely efficiency and finality” (at para 74).  Such factors militate in favour of retaining a reasonableness standard for reviewing commercial arbitration awards (at paras. 44-45).

Second, the fact that under Vavilov the appellate standards of review apply where there is a statutory right of “appeal” is not conclusive, because there are significant differences between the administrative law and commercial arbitration contexts:

The historic development of commercial arbitration through the centuries has been primarily as a result of contractual mechanisms to enable parties to resolve their disputes.  This is contraposed with the development of administrative law and the review of governmental decisions, which have followed a different legal and jurisprudential path.  When one considers both the jurisprudence and the institutional differences, the argument for less intervention or legalistic approach to the review of commercial arbitration is justified.  A different approach to the meaning of the word appeal in The Arbitration Act, CCSM c A120, dovetails with the key policy objectives of commercial arbitration; namely, efficiency and finality (at para. 47).

This point was also made by Joyal CJ in Christie Building Holding Company, Limited v Shelter Canadian Properties Limited, 2022 MBKB 239.

On the merits, Monnin JA upheld the award at issue, part of a long-running dispute between the parties.

Clearly this issue still has legs. Monnin JA’s point about the difference between arbitration and public administration is well taken and calibrating the appropriate level of deference in the arbitration context can be a difficult endeavour (see also Christie, at para. 92). Vavilovian reasonableness review is flexible and so, in principle, can expand or contract in response to the relevant context, being more demanding where the questions are relatively more legal in character but less so when they are fact-heavy. That said, Vavilov’s demands of responsiveness will typically require well-reasoned decisions that, in a private setting, might not always suit the parties.

For my part, I am attracted by the call of the Vavilovian sirens — “simplicity” — that also lured the Court of Appeal for the Northwest Territories. “Appeal” in a statute providing for court review of arbitration awards means the appellate standards of review are applicable.

If the appellate standards applied in the arbitration context, this would bring arbitration into line with contractual disputes. When these are litigated in the courts, the appellate standards of review apply (see e.g. Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20): correctness on extricable questions of law but palpable and overriding error on everything else. Correctness on extricable questions of law favours consistency in the law. Palpable and overriding error on questions of fact and mixed law and fact furthers the efficiency and finality objectives of commercial arbitration especially given the modern tendency, exemplified by Earthco, of treating most questions of contractual interpretation as applications of law to fact rather than as pure questions of law.  And party autonomy can be taken into account: this is only a general framework. Consistent with the primacy of private ordering, the parties remain free to fashion dispute resolution mechanisms that suit their interests.

As I say, this is a subtly difficult question that, ultimately, the Supreme Court will have to resolve at some point. Otherwise, as with any other issue that still has legs, it will run and run.

This content has been updated on September 5, 2025 at 19:08.