The Ontario Superior Court's decision in2501373 Ontario Inc. et al. v. Selfe et al.,2025 ONSC 5216,1illustrates why appellate review of arbitration awards is the exception and not the rule. In Ontario, an arbitration clause providing that awards are to be "final and binding" may be enough to foreclose an appeal on questions of law. Even if such appeals are potentially available, leave to appeal requires identifying an extricable question of law. Courts will not do this readily.
The Dispute
A dispute arose between the parties to a Share Purchase Agreement ("SPA") after closing. The SPA included an arbitration clause that provided:
The decision of the Arbitrator shall be final and binding upon the parties and not subject to appeal either on an issue of law or an issue of mixed fact and law. Judgment upon the award or decision rendered by the Arbitrator may be entered in any court having jurisdiction.2
The unsuccessful party at arbitration sought leave to appeal the arbitration award on what it submitted were questions of law.
The Appeal
The proposed appellants argued that the arbitration clause in the SPA did not apply. They submitted that the arbitration was instead governed by the Terms of Appointment of the arbitrator, which were silent on appeal rights.3Under Ontario'sArbitration Act, 1991, an arbitration clause that is silent on the availability of appeals on questions of law permits such appeals, but only with leave of court.4
The application judge rejected the proposed appellants' argument. He relied on a plain reading of the Terms of Appointment, which provided that the parties were submitting disputesin relation to the SPA.5The Court noted that, where parties agree to "final and binding" arbitration, as these parties had done in the SPA's arbitration clause, this reflects an intention to exclude a right of appeal.6
The proposed appellants also claimed that they had not considered the waiver of appeal rights during the negotiation of the SPA. The Court held that this was irrelevant to the clause's legal interpretation.7In reaching this conclusion, the Court considered the sophistication of the parties and the fact they ought to have received legal advice.8
The application judge also stated that even if the arbitration clause had not foreclosed appeals, an appeal still would not have been available because the proposed appellants had failed to identify an extricable question of law arising out of the arbitrator's alleged errors.9An "extricable question of law" arises when a legal question can be separated from the factual matrixentirely.10The Supreme Court of Canada has cautioned courts against too readily identifying extricable legal questions in contract disputes.11The Ontario court would not have done so here.
In the result, the application for leave to appeal was dismissed and the arbitration award was recognized as a judgment of the court.12
Key Takeaways
TheSelfecase offers two key takeaways for parties negotiating arbitration agreements:
- Take care in excluding appeals.InSelfe, the Court concluded that the language of the arbitration clause foreclosed appeals on legal questions, but it also noted that merely providing for "final and binding" awards may be enough to exclude appeals on questions of law in Ontario undersection 45(1)of theArbitration Act. Subjective evidence of what the parties thought they were agreeing to will not avoid the effect of this contractual language, particularly when the arbitration agreement is between sophisticated commercial parties.
- Extricable legal questions are elusive.Courts are not generous in construing alleged errors in an arbitration award as raising extricable questions of law. Absent such a question, leave to appeal will not be granted, even where appeals are not foreclosed by contract.
Footnotes
1 2501373 Ontario Inc. et al. v. Selfe et al.,2025 ONSC 5216. [Selfe]
2 Selfeat para[15].
3 Selfeat para[18].
4 Arbitration Act,1991, S.O. 1991, c. 17,s.45(1).
7 Selfeat para[28].
8 Selfeat para[28].
9 Selfeat para[29].
10 Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras[53]-[54].
11 Selfeat paras[30]-[31];Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 at para[45];Ontario Minister of Transportation v. Link 427 General Partnership,2025 ONSC 2375at paras[17]-[18];Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc.,2024 SCC 20at para[28].
12 Selfeat paras[4],[37]-[41].
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