Alberta Court of King’s Bench found that it is an error of law for an arbitrator not to consider all the evidence filed in an arbitration and not to provide sufficient reasons in an award.

Facts

In this family law-based dispute, both parties appealed an arbitrator’s awards pursuant to section 44 of the Alberta Arbitration Act (the “Act”), which provides for rights to appeal an arbitral award. The arbitration agreement under which the arbitration was commenced included a provision allowing for appeal only on errors of law.

The issue to be determined by the Court was whether there were errors of law by the arbitrator giving rise to a right of appeal.

Decision

The Court confirmed that the scope of appeal was restricted to errors of law by the arbitration agreement and that the test for any appeal under section 44 of the Act is the appellate standard of review, which in the case of errors of law is a standard of correctness.

The Court first highlighted that failure to consider relevant evidence constituted an error of law. In this case, the Arbitrator admitted that he did not have a copy of, and had not reviewed, one party’s Affidavit of Records—which had been put into evidence and relied on by that party. The Court held the failure to review and consider this evidence to be an error of law.

The Court also identified a second, interconnected error of law: the Arbitrator’s reasons set out in the award were insufficient. The Court found that this was “not surprising” given the Arbitrator’s failure to consider all the evidence. The applicable standard in assessing sufficiency of reasons is whether they are sufficient to permit a review on appeal; in this case, the Arbitrator's decision lacked the necessary detail to meet this test. The Court described the Arbitrator’s reasons regarding two assets at issue between the parties as “thin”.

Having found the two errors of law, the Court set aside the two substantive awards of the Arbitrator. The Arbitrator’s cost award, which was inextricably linked to the main awards, was also set aside. The Court directed that the matter return to arbitration in accordance with subsection 44(5) of the Act. However, as the parties preferred not to remit the matter to the original arbitrator, the Court ordered that they select a new arbitrator.

Finally, the Court ordered that the new arbitration would include only the existing records, with no new evidence or briefs of argument to be included—a direction most likely made to maintain the procedural efficiency, which is so central to arbitration, despite the initial awards being set aside on appeal.

Analysis

An arbitrator’s written award is not required to refer to all of the evidence. Considerable latitude is given by the courts on the assumption that the arbitrator has considered all relevant evidence even if not referenced in the award. While unsuccessful parties may form the view that an arbitrator has failed to consider relevant evidence in rendering an award against them, it will often be difficult, if not impossible, to prove this was the case.

Only where the arbitrator failed to engage with a fundamental issue, failed to provide sufficient reasons to permit a review on appeal, or reached a factual conclusion irrefutably contradicted by the evidence, is a court likely to find that an arbitrator has failed to consider relevant evidence. In this case, the Arbitrator openly admitted that he did not review, and appeared to have misplaced, one party’s Affidavit of Records, making the allegation of failure to consider relevant evidence irrefutable and ultimately fatal to the award.

Giacchetta v. Beck, 2024 ABKB 481