The Supreme Court of Canada will decide how closely courts should review arbitrators’ decisions on questions of law.
The issue matters to businesses because arbitration is often chosen precisely to avoid prolonged court proceedings and obtain a final resolution of a commercial dispute. Parties who litigate in court generally accept that questions of law may ultimately be reviewed by an appellate court for correctness. Arbitration reflects a different bargain: the parties agree to have their dispute decided privately by an arbitrator, often in exchange for greater efficiency and finality. The standard of review determines how far that bargain extends: whether an arbitrator’s legal conclusions receive deference, or whether a court hearing an arbitral appeal is entitled to decide those questions for itself.
It granted leave to appeal in Buffalo Point First Nation v. Buffalo Point Cottage Owners Association Inc., 2025 MBCA 72, on July 23, 2026, and in Vancouver School District No. 39 v. Kingsgate Property Ltd., 2026 BCCA 98, on September 24, 2026.
The Manitoba Court of Appeal held that reasonableness still applies to appeals from commercial arbitration awards.
The British Columbia Court of Appeal held that correctness applies to questions of law.
The Supreme Court is not likely to hear these appeals until sometime in mid to late 2027.
Background
In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the Supreme Court held that appeals from commercial arbitration awards are generally reviewed for reasonableness, with correctness reserved for rare questions such as constitutional issues.
Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, confirmed that approach and tied deference to arbitration’s goals of efficiency and finality. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the Court held that where a statute provides a right of appeal from an administrative decision to a court, ordinary appellate standards apply, meaning correctness on questions of law.
Most provincial arbitration statutes, including Manitoba’s and British Columbia’s, provide that kind of appeal. The Court noted the tension in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, but left it “for another day.” Three concurring justices would have held that correctness applies wherever a statute provides for an appeal from an award.
Buffalo Point: reasonableness still applies
The dispute arose between Buffalo Point First Nation and an association of cottage leaseholders. A 2015 settlement gave the association access to binding mediation over budget expenditures it considered clearly excessive or unnecessary. When the First Nations Tax Commission would not approve that mechanism, the arbitrator substituted a “debt mechanism” that made any such expenditure a debt owed to the association.
The Court of King’s Bench applied correctness and set the award aside as a rewrite of the bargain. The Court of Appeal reinstated it. Justice Monnin held that Vavilov did not overturn Sattva, which lower courts must follow until the Supreme Court says otherwise.
He stressed that parties choose arbitration, and their arbitrator, by agreement rather than through a statutory process, and that deference serves arbitration’s goals of efficiency and finality. He also declined to apply Vavilov‘s “presumption of consistent expression”, preferring the dissent’s view that “appeal” in an arbitration statute need not mean the same thing as in administrative statutes. On a reasonableness review, the award stood. Here, the standard of review decided the outcome.
Kingsgate: correctness applies
Kingsgate involves the Vancouver School Board’s ground lease of the Kingsgate Mall site. Renewal rent is based on the land’s value if ready for “immediate development” to its highest and best lawful use. In 1999, an arbitral panel read that as the outright uses permitted by the zoning, rather than slower, discretionary conditional uses.
In 2022, a new panel declined to apply issue estoppel and valued the same land, under the same zoning, on a conditional use basis at $116.5 million. The chambers judge set that aside and fixed the value at $20 million, reducing annual rent from about $9.6 million to $1.65 million.
The Court of Appeal unanimously held that Vavilov displaced Sattva and that correctness applies, expressly declining to follow Buffalo Point. Justice Willcock, whose analysis on this point the full panel adopted, found that Sattva rested on reasoning Vavilov had since replaced. He saw no principled reason to give arbitrators more deference than expert tribunals on questions of law, and noted that parties who value speed and finality can exclude appeals in their agreement. He also held that the Vavilov majority’s reliance on consistent expression settled that point.
On the merits, the court split. The majority held that the 2022 panel was bound by the 1999 interpretation. Justice Willcock, dissenting, would have restored the 2022 award.
How the cases connect
Together, the cases present a conflict between two appellate courts on the same question. They also offer different perspectives. In Buffalo Point, the standard decided the result. In Kingsgate, the judges agreed on the standard but not the outcome, and the case also raises how issue estoppel applies across successive arbitrations.
Questions worth watching
If correctness applies, how much will it change in practice? Many arbitral disputes turn on contractual interpretation, which is usually a question of mixed fact and law and attracts deference in any event.
Does the answer depend on the wording of each province’s arbitration statute? The B.C. court relied partly on specific language in its former Arbitration Act.
This article is provided for general information only and is not legal advice. Readers should obtain advice about their specific circumstances.
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Simon Q.K. Garfinkel
Associatesgarfinkel@tmlawyers.com
Simon practices in the Advocacy, Litigation and Dispute Resolution department.
Peter Mueller
Partnerpmueller@tmlawyers.com
Peter Mueller is a litigation lawyer who helps businesses, not-for-profits, and employers resolve disputes before courts, arbitration panels, and government tribunals. Licensed in Manitoba and Nunavut, Peter’s practice is designed around dispute resolution and advocacy, providing clear, strategic advice that supports practical business decisions and minimizes risk.