By James Plotkin
In 108 Media Corporation v. BGOI Films Inc., 2019 ONSC 880, the Ontario Superior Court of Justice re-affirmed the predominant line of case law in Ontario holding that when parties insert the words “final and binding” into an arbitration agreement, they intend to preclude an appeal under section 45 of the Arbitration Act, 1991, S.O. 1991, c. 17, either as of right or with leave.
108 Media involved a “sales agency agreement” (SAA) wherein the Applicant, a film and television distributor, agreed to act as sales agent for the Respondent, who produces “low-budget horror films”. The SAA contained an arbitration clause that, among other things, stated the arbitrator’s determination shall be “final and binding”:
Should there be a disagreement or a dispute between the parties hereto with respect to this Agreement or the interpretation thereof, the same shall be referred to a single arbitrator, selected jointly by the parties, and the determination of such arbitrator shall be final and binding upon the parties hereto. (Emphasis added)
Relying on several decisions, including the Ontario Court of Appeal’s 1988 decision in Yorkville North Development Ltd. v. North York, 1988 CanLII 4701 (ON CA), the Court held that the words “final and binding” would have no meaning if they did not preclude an appeal.
Interestingly, Yorkville North Developments was decided three years before the Arbitration Act, a verbatim adoption of the Uniform Law Conference of Canada’s Uniform Arbitration Act (adopted in Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick), came into force. Ontario’s previous domestic arbitration legislation did not provide for appeals, which calls the Court of Appeal’s reasoning into question since parties evidently did not intend to exclude something (i.e. appeals) that did not exist in the law at the time.
It also fails to take account of the reason why this language is generally found in arbitration clauses. This reason is largely historical and has to do with the old recognition and enforcement regime in international arbitration before the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards came into play over 50 years ago. Under most international arbitration legislation, including that in force in Ontario, there is no right of appeal. Rather, this language was historically included in arbitration agreements to avoid the need for what was called “double exequateur”, a requirement that an award to be homologated/recognized at both the seat of arbitration and the enforcement jurisdiction. The New York Convention has done away with that requirement, but the boilerplate “final and binding” language remains in many arbitration agreements, both international and domestic, as a matter of course.
There remains a contrary line of cases that say the words “final and binding” are insufficient on their own to indicate the parties’ intention to exclude appeals (see: Denison Mines Ltd. v. Ontario Hydro (2002), 2002 CanLII 20161 (ON CA); Peters v. D’Antonio, 2016 ONSC 7141). This remains the minority view in Ontario, however.
Despite not resting on the most solid doctrinal footing, it appears the prevailing view in Ontario is that “final and binding” means no appeal, for now.