BC Supreme Court dismisses petitioners’ application to remove arbitrator for having a reasonable apprehension of bias

A party may be able to extend the limitation period for raising a reasonable apprehension of bias where only an accumulation of events gives rise to justifiable doubts as to the impartiality of a decision-maker; however, this is not the case where those events are independent of one another.

Administrative law – Judicial Review -Decisions reviewed – Arbitrations and arbitrators – Limitations of actions – Reasonable apprehension of bias

Johnston v. Octaform Inc., [2024] B.C.J. No. 584, British Columbia Supreme Court, April 4, 2024, C.J. Giaschi J. (In Chambers)

The petitioners, former employees of the respondent, sought an order removing an arbitrator and setting aside the arbitrator’s decisions on the basis that circumstances existed that gave rise to a reasonable apprehension of bias on the part of the arbitrator.

The arbitration was governed by the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 [ICAA]. Section 12 of the ICAA provides the specific grounds upon which an arbitrator’s appointment may be challenged. Pursuant to section 12(3)(a) an arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s independence or impartiality.

The Court noted that by the conjunction of ss.12(3) and 12(3.1) of the ICAA, there must be “a real danger of bias” for there to be justifiable doubts as to an arbitrator’s independence or impartiality, and there is no distinction as between “a real danger of bias” and “a reasonable apprehension of bias”. Further, the test to be applied to remove an arbitrator on the grounds of reasonable apprehension of bias is the test set out in the leading case of Wewaykum Indian Band v. Canada, 2003 SCC 45 and is: whether an informed person, viewing the matter realistically and practically and having thought the matter through would conclude it was more likely than not the arbitrator, consciously or unconsciously, did not decide fairly. This inquiry is very fact specific and depends on the particular circumstances.

The respondent argued that pursuant to s. 13(2) of the ICAA, the petitioners were required to bring their challenges to the arbitrator within 15 days after becoming aware of the various circumstances said to give rise to justifiable doubts as to arbitrator’s impartiality, and they failed to do so in respect of at least 5 of the grounds raised.

The petitioners submitted that “becoming aware of” was an open and fluid concept with aware meaning time to read the respective decisions, consult counsel, review the law and formalize submissions. They further submitted that the 15-day limit did not apply to specific events, but to the cumulative effect of the various events.

The court concluded that the interpretation urged by the petitioners would render the 15-day limit completely meaningless. There may be circumstances where only an accumulation of events give rise to justifiable doubts as to the impartiality of an arbitrator and, in those circumstances, it might properly be said that the 15-day limit does not apply to each ad every specific event; however, this was not such a case. The petitioners had not pled that it was only the cumulative effect of the various circumstances that gave rise to a reasonable apprehension of bias. To the contrary, they pled that the various grounds advanced were independent or even fully independent. And, the rulings and orders complained of were, indeed, independent. Thus, the court held that the petitioner’s challenges made outside of the 15-day limit were out of time.

In any event of them being out of time, the court carefully assessed the facts surrounding each of the challenges and concluded that none of the challenges met the test for establishing a reasonable apprehension of bias. The arbitrator was dealing with a hard-fought arbitration where every issue appeared hotly contested, over three and one-half years, involving over 57 days of hearings. The record revealed the arbitrator had been courteous in his dealings with the parties, treated them equally, and gave the parties a reasonable opportunity to make submissions based on his rulings on proper legal principles.

Thus, the petition was dismissed.

This case was digested by Renée Gagnon of Harper Grey LLP and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter. If you would like to discuss this case further, please feel free to contact her directly at [email protected]