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Alternative Dispute Resolution - Binding arbitration - Jurisdiction of the court to review - Standard of review - Reasonableness -

Thursday, July 07, 2016 @ 8:00 PM  

Appeal by Coliseum Inc. (Coliseum) from a decision setting aside an arbitrator’s award. The appellant leased a stadium from the respondent City of Ottawa (City). A dispute between the parties about Coliseum’s right of possession was resolved by Minutes of Settlement in 2004. One term of the settlement was that the City could terminate the lease in the event it had bona fide plans to redevelop the stadium. In case of such termination, the City was required to offer the appellant an alternate City-owned site for lease that was within 10 kilometres of the stadium. In 2010, the City purported to terminate the lease, as it intended to redevelop the stadium property. The City offered the appellant an alternate site, but the appellant objected to this site. The parties explored other options unsuccessfully. The appellant felt the City had breached the Minutes of Settlement and invoked the arbitration clause in the lease agreement. The arbitrator held that the City breached the settlement due to the City’s failure to provide the appellant with an option to lease a property which complied with the requirements of the settlement. The arbitrator found that the City had to provide a site similar to the alternate site named in the lease as it was in 2004, provided that the alternative site was appropriate for the appellant’s operations. On appeal, the application judge found that the arbitrator’s interpretation of the termination and alternate site provisions of the Minutes of Settlement was both an error of law and unreasonable.

HELD: Appeal allowed. The application judge erred by concluding that the arbitrator’s interpretation of the Minutes of Settlement was unreasonable. While the arbitrator’s interpretation did not flow entirely from an analysis of only the words inside the four corners of the Minutes of Settlement, his reasoning and result could not attract the label “unreasonable”. The fact that the application judge’s interpretation was also reasonable did not affect the result, as the arbitrator was owed deference on his reasonable interpretation.