For many decades, the standard of review of a commercial arbitration decision on appeal to a court has been reasonableness. There are good policy reasons for this. Making arbitral decisions more difficult to reverse on appeal increases certainty for parties who have contracted for arbitration rather than litigation as their preferred method of dispute resolution. It also enhances the viability of arbitration as an alternative forum to the courts, reducing the burden on overstrained judicial resources.
In just two short weeks, Canadian courts in different provinces have reached opposite conclusions on whether the new standard of review framework for administrative tribunals, as set out in Bell and Vavilov, applies to local commercial arbitrations.
The Ontario Superior Court of Justice Divisional Court just quashed the grievance settlement board's decision that a probationary employee's termination was arbitrary and discriminatory and granted the application for judicial review. The evidence was clear that the employer's decision to terminate the probationary employee was neither arbitrary nor discriminatory. In fact, the decision to terminate came after numerous reviews of the employee's work and conversations about performance concerns.
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