Why this Decision Matters
In MTCC No. 1251 v. Windsor Arms Hotel Corp., the Ontario Superior Court of Justice (Commercial List) disqualified an arbitrator on an application under s. 13(1) of the Arbitration Act, 1991, c. 17, after finding that the circumstances gave rise to a reasonable apprehension of bias.1 This decision underscores that the way a potential conflict is managed in real time, rather than the conflict trigger itself, can be decisive.
The Court expressly applied the objective test: what an informed, reasonable person would conclude when viewing the matter realistically and practically, and confirmed that a finding of actual bias is not required for a conflict to be made out.2 The endorsement situates the analysis within long‑standing authorities,3 while adopting the Ontario Court of Appeal's recent guidance in Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc.4 on arbitrator impartiality and disclosure.
Background and Factual Overview
The Arbitration
The parties' relationship stems from a 1999 reciprocal agreement governing shared services at 18/22 St. Thomas Street, Toronto, where the Windsor Arms Hotel operates on the building's lower floors and MTCC 1251 owns the residential common elements. After years of operational disputes, the parties moved to a mediation-arbitration process. Mediation failed in September, 2023, and a five‑day arbitration was set to begin July 7, 2025. A central issue was whether HST applied to certain fees payable between the parties.5
Months earlier, MTCC had served its Arbitration Record, including an expert report from tax lawyer Jesse Brodlieb addressing both the applicability of HST and a methodology for quantifying any amounts owing.6
The Weekend Emails that Changed Everything
At 11:58 p.m. on Saturday, July 5, 2025, fewer than 36 hours before the hearing, the arbitrator emailed counsel to disclose "a clear appearance of conflict". He explained that Mr. Brodlieb had recently referred an unrelated litigation matter to the arbitrator's law firm. The arbitrator had been assigned carriage of that file, including drafting pleadings, and he had already exchanged emails with Mr. Brodlieb about it. He offered the parties three options: (i) he could resign, (ii) the arbitration could proceed only if both parties waived the conflict; or (iii) the expert could be excluded with an adjournment to permit MTCC to retain a new expert. The arbitrator invited other suggestions from the parties as well.7
On Sunday, July 6, counsel for Windsor Arms questioned whether any conflict truly existed and suggested a fourth option: Mr. Brodlieb's client could retain different counsel so that the arbitrator's firm would no longer act for them. The arbitrator replied that, "given recent case law", he was prepared to proceed only if everyone signed off on what might be perceived as a conflict.8
By Monday, July 7, MTCC declined to waive the conflict. Windsor Arms maintained there was no conflict. At this point, the arbitrator reversed course: despite MTCC's objection, he declined to resign, and announced he would continue absent a two‑party waiver "in light of" Windsor Arms' position. A series of further emails followed, including direction for a counsel‑only case conference and confirmation that Mr. Brodlieb had advised the arbitrator to deal directly with the client and take instructions exclusively from them on the unrelated file.9
MTCC sought disclosure of the arbitrator-expert emails to assess the seriousness of the issue but disclosure was refused on the grounds of privilege. The arbitrator pointed to Article 9 of the parties' mediation-arbitration agreement (addressing prior retainers of experts by the mediator/arbitrator) as possibly relevant. MTCC disagreed. After the arbitrator dismissed a July 10 recusal motion, MTCC brought this court application.10
Decision
The Legal Test (and Aroma's Role)
Section 13(1) of the Arbitration Act, 1991, c. 17, empowers the court to remove an arbitrator where "circumstances exist that may give rise to a reasonable apprehension of bias". Justice Osborne emphasized two features of the statutory wording: (1) the court need only be satisfied that the circumstances may give rise to a reasonable apprehension; and (2) proof of actual bias is unnecessary. The test is objective, grounded in MDG Computers, Kingdon v. Kramer, and the Supreme Court's classic articulation in Committee for Justice and Liberty.11
Importantly, the Court relied on the Court of Appeal's approach in Aroma. Although decided under the UNCITRAL Model Law and the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5, Aroma applied essentially the same standard. The Court also cautioned, as in Aroma, that the apprehension must be reasonable as assessed through the lens of an informed observer, an objective standard.12
The Court's Analysis: Not the Referral Alone, but the Management of the Conflict
Justice Osborne accepted that a single business referral from a proposed expert might not, by itself, warrant disqualification. What distinguished this case was how the conflict was managed after disclosure. The timing of the disclosure (Saturday night) was "unfortunate", but the promptness of the disclosure itself was appropriate. The reasonable apprehension arose from what happened next.13
The Court highlighted several factors that, taken together, created a reasonable apprehension of bias:14
- The arbitrator's own characterization, twice, of a "clear appearance of conflict", coupled with his initial insistence that he would not proceed absent two‑party waiver or resignation. An informed observer would accord this significant weight because the arbitrator alone knew the facts of both files.
- Refusal to disclose the arbitrator-expert emails (potentially justified by privilege) left MTCC in the dark about the nature of the parallel retainer and relationship dynamics with its key expert, sustaining an objective apprehension.
- An abrupt, largely unexplained reversal: after saying he would not proceed without both waivers, the arbitrator declined to withdraw when MTCC refused to waive but Windsor Arms objected to his resignation. This about‑face was central to the apprehension.
- The arbitrator's direction of a counsel‑only case conference in the heat of conflict management, heightened rather than alleviated concern. While case‑management with counsel is not inherently problematic, the context mattered.
- Ongoing interactions with the expert: The arbitrator reported that Mr. Brodlieb directed him to deal directly with the client and take instructions exclusively from them on the unrelated matter did not reduce the apprehension of bias. If anything, it underscored ongoing interactions between the arbitrator and the party‑retained expert.
- Misplaced reliance on Article 9 of the mediation-arbitration agreement, which addressed situations where an arbitrator had previously retained experts in other matters, not where the expert had referred work to the arbitrator.
- The arbitrator's own award on recusal, which downplayed the referral as a one‑off business event, failed to engage with the cumulative management issues that followed disclosure.
Synthesizing these elements, the Court concluded that an informed, reasonable person would see a realistic risk that the arbitrator, "consciously or unconsciously, would not decide fairly".15 The apprehension flowed less from the referral itself than from the way it was handled: the arbitrator's initial self‑assessment of conflict, his subsequent reversal, and his ongoing interactions with the expert and process controls (e.g., client exclusion).
Result and Costs
The Court granted the application and removed the arbitrator. On costs, MTCC was awarded $4,500 all‑inclusive, payable within 30 days, reflected the streamlined record, absence of cross‑examinations, and a hearing of less than half a day.16
Concluding Thoughts
This short, focused endorsement delivers an important lesson: when late‑breaking disclosure arises on the eve of a hearing, process discipline matters. Prompt disclosure is essential, but so is following through logically on its implications. If the arbitrator candidly says there is a "clear appearance of conflict" and ties proceeding to a two‑party waiver, the next steps must align with that position. A later reversal, especially when coupled with additional interactions involving a key expert, can transform a manageable issue into a reasonable apprehension of bias.
For parties to arbitrations, this case underscores the Aroma message: the test for a reasonable apprehension of bias is objective, grounded in real‑world perceptions, and sensitive to context. Where disclosure is followed by measured, transparent, and consistent management, a single referral may not imperil the process. Where it is not, removal may become the only viable remedy.
Footnotes
1. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 2, 5, 30 and 57.
2. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 7-10 and 51.
3. MDG Computers Canada Inc et al v MDG Kingston Inc et al, 2013 ONSC 5436; Kingdon v Kramer, 2015 ONSC 397; Committee for Justice and Liberty et al v National Energy Board et al, 1976 CanLII 2 (SCC).
4. Aroma Franchise Company, Inc v Aroma Espresso Bar Canada Inc, 2024 ONCA 839.
5. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 12-13 and 15-16.
6 .MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 17-18.
7. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 19-22.
8. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 23-24.
9. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 25-27 and 44.
10. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 28-29, 38 and 45
11. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 6-9.
12. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at para 50.
13. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at para 32.
14. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 34-56.
15. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at para 9, citing Committee for Justice and Liberty et al v National Energy Board et al, 1976 CanLII 2 (SCC) at p 394.
16. MTCC No 1251 v Windsor Arms Hotel Corp, 2025 ONSC 5009 at paras 57-59.
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