Court finds appeal bar applies despite tribunal issuing an award rather than a preliminary ruling
The Ontario Court of Appeal has quashed Mexico's appeal of a Superior Court decision that set aside an arbitration award involving claims under the North American Free Trade Agreement (NAFTA).
In Grace v. United Mexican States, 2026 ONCA 700, the court ruled that s. 11 of Ontario's International Commercial Arbitration Act, 2017 (ICAA) prohibits appeals from Superior Court decisions concerning an arbitral tribunal's jurisdiction.
The dispute arose from an arbitration that several claimants commenced against Mexico in Toronto in 2018 under Chapter 11 of NAFTA. The arbitration proceeded over four years before the tribunal issued an award in 2024 finding that it lacked jurisdiction over the claims.
The claimants subsequently applied to the Ontario Superior Court of Justice to set aside the award. They argued that the tribunal erred in its jurisdictional analysis and that one tribunal member created a reasonable apprehension of bias.
The application judge accepted their arguments and set aside the award in April 2026. Mexico appealed the decision, prompting the claimants to bring a motion seeking to quash the appeal.
The claimants argued that s. 11 of the ICAA expressly prohibited appeals concerning jurisdictional determinations. They further submitted that the court should quash the remaining bias issue because it would have no practical effect on the parties.
Mexico maintained that s. 11 applied only to preliminary jurisdictional decisions rather than awards. It argued that issuing an award meant the applicable recourse fell under article 34 of the UNCITRAL Model Law on International Commercial Arbitration, allowing an appeal.
The Court of Appeal rejected Mexico's position, finding that the tribunal's award addressed only jurisdictional and bias issues. The tribunal did not evaluate the substantive claims or determine liability or damages.
The court held that the tribunal's decision not to separate the jurisdictional question from the proceedings did not prevent s. 11 from applying.
The court concluded that the statutory language clearly prohibited an appeal from the Superior Court's jurisdictional determination. It also found that article 16(2) of the Model Law did not alter that prohibition.
The Court of Appeal quashed Mexico's appeal without addressing the bias finding and awarded the claimants $20,000 in agreed costs.
