Appellants allege actual bias, say comments on false statements amount to perjury finding
The Ontario Court of Appeal has dismissed an appeal upon disagreeing with the appellants’ claim of a reasonable apprehension of bias in the arbitrator’s nondisclosure that he and one of the parties’ counsel were involved in another arbitration.
The parties’ commercial dispute commenced in 2018. In 2020, they resorted to commercial arbitration amid the COVID-19 pandemic’s effects on court operations. They executed an arbitration agreement with the arbitrator in October 2020.
The appellants asserted multiple procedural issues, which caused procedural delays. Under Ontario’s Arbitration Act, 1991, they filed a motion alleging a reasonable apprehension of bias, as the arbitrator failed to disclose his financial/business relationship with a lawyer acting for the respondents, given that they were involved in another arbitration as arbitrator and counsel.
The arbitrator dismissed the appellants’ motion. First, he determined that they brought their challenge well beyond the 15-day period required by s. 13(3) of the Arbitration Act, given that they knew about the other arbitration at the time of his appointment or by December 2020.
Second, the arbitrator said his involvement in the other arbitration did not constitute a reasonable apprehension of bias.
The appellants applied to the Ontario Superior Court of Justice to disqualify the arbitrator and require the litigation of the dispute in court. They claimed that the arbitrator wrongly decided they had untimely filed their motion to remove him based on bias.
The appellants again asserted reasonable apprehension of bias and newly alleged actual bias. According to the application, the arbitrator’s comments that one appellant made false statements in his affidavit amounted to a perjury finding.
On Sept. 20, 2024, Dhaliwal v. Richter International Ltd., 2024 ONSC 5103, a judge of the Ontario Superior Court dismissed the application to remove the arbitrator for bias.
First, the application judge deemed the appellants’ motion time-barred under s. 13(3) of the Arbitration Act.
Second, the judge found no reasonable apprehension of bias since the two arbitration proceedings were unrelated. The judge said the arbitrator did not need to disclose his involvement in the other arbitration, as there was no concern he would address this arbitration with a closed mind.
Third, the judge saw no actual bias in the arbitrator’s comments that the appellant had made false statements. The judge explained that arbitrators could freely make such findings without being accused of bias.
The appellants challenged the judge’s rejection of their application to disqualify the arbitrator for bias.
Last July 15, Dhaliwal v. Richter International Ltd., 2025 ONCA 522, the Court of Appeal for Ontario dismissed the appeal.
First, the appeal court said it did not need to address the judge’s finding that the motion was untimely because it agreed with her refusal to find a reasonable apprehension of bias or actual bias.
Second, the appeal court saw no merit in the appellants’ argument that the non-disclosure amounted to a reasonable apprehension of bias. The appeal court ruled that mere involvement in another arbitration with a party’s lawyer would not automatically give rise to a reasonable apprehension of bias.
The appeal court said the arbitration agreement’s terms did not compel the arbitrator to reveal his and counsel’s involvement in another arbitration and did not require the parties to select an arbitrator with whom neither had worked before. The appeal court noted that lawyers sometimes chose arbitrators precisely due to their work history together.
Third, the appeal court also rejected the claim of actual bias. The appeal court found the arbitrator justified in calling the appellant’s statements false, in the sense that they were incorrect.
The appeal court said there would be no basis to find actual bias even if the arbitrator had concluded that the appellant committed perjury, which he did not. The appeal court added that the arbitration process could become unwieldy if a party could request a removal based on allegations that the arbitrator’s findings were “unnecessary” or “went too far.”
