Providing clear, logical reasons for decisions is fundamental to ensuring fairness, transparency, and accountability both in the judicial and arbitral settings. This principle was recently reinforced by the Ontario Court of Appeal's decision in Marketology Media Inc. v. DGA North American Inc., 2024 ONCA 799 (CanLII), particularly in paragraphs 31 to 36, where the court underscored the importance of reasoned awards.
Arbitrators are tasked with making decisions that can have significant consequences for the parties involved, often in disputes where judicial review is limited or unavailable. Without detailed and logical reasoning, a decision may appear arbitrary or unsubstantiated, undermining the integrity of the arbitration process. The Ontario Court of Appeal makes it clear that reasons for decision must not only be based on the evidence presented but also explained in a manner that demonstrates how that evidence was weighed and applied. This applies equally in the context of arbitral awards.
The court's emphasis on the duty to provide clear reasons reflects a broader principle of justice – that parties should understand the basis of a decision, even if they disagree with the outcome. This transparency helps parties assess the fairness of the process and supports the efficient resolution of disputes by minimizing the need for costly and time-consuming appeals, or challenges to the arbitration award on the basis of procedural unfairness or bias.
Moreover, the absence of clear reasoning can erode trust in the arbitration process itself. Arbitrators are not merely decision-makers; they are stewards of a system designed to ensure that disputes are resolved based on principles of fairness and equity. By providing reasoned decisions, arbitrators objectively demonstrate to the parties that their judgments are grounded in logical analysis, respect for the law, and a thorough understanding of the facts.
The Ontario Court of Appeal's decision reiterates that a judgement (or award) should not only answer the questions posed by the dispute but also explain how those answers are derived. This is not merely a procedural nicety—it is an essential element of the arbitration process that safeguards its legitimacy and promotes the rule of law.
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