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Jan Advocate 2017

44 V O L . 7 5 P A R T 1 J A N U A R Y 2 0 1 7 THE ADVOCATE British Columbia (Ministry of Forests) v. Teal Cedar Products Ltd. This case is unusual in a number of respects. The arbitration itself took over five years. Unlike most commercial arbitrations, the parties were directed by statute to submit the dispute in question (valuation of assets used in timber operations) to arbitration. One aspect of the dispute involved interpretation of a statute. The other aspect involved the interpretation of a contract. The arbitration award was made on April 27, 2011. Both parties brought an application for leave to appeal the arbitration award. On April 16, 201243 Chief Justice Bauman (then of the British Columbia Supreme Court) granted leave to appeal and set aside a portion of the award, remitting that portion back to the arbitrator for reconsideration. That decision was appealed to the British Columbia Court of Appeal. On July 10, 201344 the Court of Appeal allowed the appeal with respect to the portions of the award not set aside by Chief Justice Bauman. Chief Justice Finch dissented. Based on the majority’s decision, the whole award was now set aside. An application for leave to appeal to the Supreme Court of Canada was filed on October 30, 2013.45 After the Supreme Court of Canada released the Sattva decision it remanded the matter back to the Court of Appeal for reconsideration in accordance with Sattva. A reconsideration hearing was held by the British Columbia Court of Appeal on May 19, 2015. The Court of Appeal’s reconsideration decision was released on June 9, 2015 confirming the Court of Appeal’s previous decision allowing the appeal.46 Leave to appeal to the Supreme Court of Canada was granted on November 30, 2015.47 The appeal was argued before the Supreme Court of Canada on November 1, 2016. The decision was reserved. Unlike the Court of Appeal’s decision in BCNET, which applied the principles laid down by the Supreme Court of Canada in Sattva, the Court of Appeal’s decision in Teal appears to seek to distinguish Sattva in a way that would appear to eviscerate its obvious policy objectives with respect to arbitration appeals.48 Whereas Sattva creates the impression that a reviewable arbitration award would be a rare occurrence, especially on a point of contract interpretation, the Court of Appeal in Teal strongly suggested that the application of legal principles in the interpretation of contracts is generally a question of law of central importance to the legal system as a whole and suggests that the restriction of appeals from arbitration awards “would be at the expense of the certainty which lies at the heart of the common law of contract”.49


Jan Advocate 2017
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