In a brief October 5, 2017 decision, the Ontario Superior Court in Epicor Software Corp. v. RB Packing & Seals Inc., 2017 ONSC 5959 (“Epicor”) exercised its discretion to decline relief under article 34(2)(a)(ii) of the UNCITRAL Model Law on International Commercial Arbitration (1985) (“UNCITRAL Model Law”) despite finding that the applicant had met the grounds set out in that article.
Article 34 of the UNCITRAL Model Law provides that an application for setting aside is a party’s exclusive recourse against an arbitral award rendered in an international commercial arbitration. The recourse may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of article 34.
Article 34(2)(a)(ii) provides that an arbitral award may be set aside by the court only if the party making the application furnishes proof that “the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case.“
In Epicor, Mr. Justice Frederick L. Meyers held that the arbitrator did commit a reviewable error in deciding the issue on a theory of the case not argued by the parties. Meyers J. held that this amounted to Epicor having been unable to present its case, thereby triggering article 34(2)(a)(ii).
In his analysis, Meyers J. noted that Ontario’s International Commercial Arbitration Act, 2017, S.O. 2017, c.2, Sch 5 applied as the applicant’s place of business was in the U.S. as admitted in the Notice of Arbitration. In addition, the parties’ undertaking to arbitrate excluded any right of appeal as did their incorporation by reference of rule 5.4.7 of the ADR Institute of Canada Rules into their undertaking. The provisions of Ontario’s domestic arbitration legislation, Arbitration Act, 1991, SO 1991, c 17, were therefore unavailable to applicant and prevented any review on the merits by the court.
Having concluded that the threshold of article 34(2)(a)(ii) had been crossed, Meyers J. still declined to send the matter back to the arbitrator for argument on the merits. First, he held that the standard of reasonableness applied. Second, having heard the parties on the application, he held that the arbitrator’s decision was not only reasonable but “I agree with him.”
“ Where the question has little real-world effect and was reasonably decided (after having heard full argument) sending the parties back for a re-hearing serves no good purpose and I exercise the discretion to decline relief under section 34 of UNCITRAL despite the grounds made out in that section.”
The analysis and reasoning in Epicor, while brief, illustrates Ontario’s courts’ support for commercial arbitration and their deference for the process chosen by the parties.
In his analysis, Meyers J. relied on a recent Ontario Superior Court decision in Consolidated v. Ambatov, 2016 ONSC 7171 (“Ambatov”) to hold that “court intervention private arbitration is and should be rare. The parties did not want courts solving their contractual disputes and they are entitled to the process they agreed upon.”
Meyers J. specifically relied on the following passage from Ambatov:
“ In the international arbitration context, courts have been warned to limit themselves in the strictest terms to intervene only rarely in decisions made by consensual, expert international arbitration tribunals. Courts must be circumspect in their approach to determining whether a jurisdictional error is a “true” question of jurisdiction. And, when it does identify such an issue, the court must ensure that it does not, advertently or inadvertently, stray into the merits of the question that was decided by the tribunal: United Mexican States v. Cargill, supra, at paras 45-47.“
The latter decision, Mexico v. Cargill Incorporated, 2011 ONCA 622 a decision of the Ontario Court of Appeal, referred to by the court in Ambatov reminded arbitration practitioners that courts must be “circumspect”:
“ In the domestic law context, courts are warned to ensure that they take a narrow view of what constitutes a question of jurisdiction and to resist broadening the scope of the issue to effectively decide the merits of the case. This point was emphasized by Lebel J. in Dunsmuir, the leading case on standard of review in the administrative law context, in his discussion at para. 59:
These questions [of jurisdiction] will be narrow. We reiterate the caution of Dickson J. in [Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp., 1979 CanLII 23 (SCC),  2 S.C.R. 227,  S.C.J. No. 45] that reviewing judges must not brand as jurisdictional issues that are doubtfully so. (Emphasis added)
 This latter approach is magnified in the international arbitration context. Courts are warned to limit themselves in the strictest terms to intervene only rarely in decisions made by consensual, expert, international arbitration tribunals, including on issues of jurisdiction. In my view, the principle underlying the concept of a “powerful presumption” is that courts will intervene rarely because their intervention is limited to true jurisdictional errors. To the extent that the phrase “powerful presumption” may suggest that a reviewing court should presume that the tribunal was correct in determining the scope of its jurisdiction, the phrase is misleading. If courts were to defer to the decision of the tribunal on issues of true jurisdiction, that would effectively [page544] nullify the purpose and intent of the review authority of the court under art. 34(2)(a)(iii).
 Therefore, courts are to be circumspect in their approach to determining whether an error alleged under art. 34(2)(a)(iii) properly falls within that provision and is a true question of jurisdiction. They are obliged to take a narrow view of the extent of any such question. And when they do identify such an issue, they are to carefully limit the issue they address to ensure that they do not, advertently or inadvertently, stray into the merits of the question that was decided by the tribunal.“