Getting the Green Light: Procedural Fairness can be a Question of Law when Challenging Arbitration Awards
In Green Light Solutions Corp. v. Kern BSG Management Ltd., 2025 BCCA 408 (“Green Light”), the British Columbia Court of Appeal (“BCCA”) held that breaches of procedural fairness in a domestic arbitration may qualify as questions of law that are appealable to the BCCA under s. 59(2) of the Arbitration Act (the “Act”).
A challenge of an award related to procedural issues may also fall under the jurisdiction of the Supreme Court of British Columbia (“BCSC”) pursuant to s. 58 of the Act.
A party seeking to challenge a domestic arbitration award on procedural grounds will now have to consider the appropriate route(s) of review and the overlapping jurisdiction with respect to reviews related to procedural matters.
As a result, Green Light may have significant practical implications for the arbitration community and parties in British Columbia.
Legislative Framework
Following amendments to the Act in 2020, there are two routes to a review of a domestic arbitration award:
Application for setting aside to the BCSC: Section 58 of the Act provides specific grounds upon which an arbitration award can be “set aside”, including due process issues such as lack of notice of the arbitration, arbitrator bias, and a party’s inability to present its case.
Appeals on questions of law to the British Columbia Court of Appeal: Section 59 allows for review based on “any question of law arising out of an arbitral award” if all parties consent or if a justice of the BCCA grants leave to appeal.
As reflected in Green Light, there may be overlap between these routes of review.
Background to Green Light: Appeal of Costs Award
Green Light arose from an arbitration between the owner of a cannabis growing facility, Green Light Solutions Corp. (“GLS”) and the contractor building it, Kern BSG Management Ltd. (“Kern”).
GLS applied for leave to appeal the arbitrator’s costs award to the British Columbia Court of Appeal based on five alleged legal errors: failing to apply the correct or relevant test, failing to consider a relevant principle, applying the wrong procedural rules and considering pre-litigation conduct. The chambers judge held that the alleged errors did not raise any question of law for the purposes of s. 59(2) of the Arbitration Act.
GLS sought leave to vary the order before a division of the BCCA, arguing that procedural fairness issues may be questions of law and a ground for appeal under s. 59.
The division agreed with GLS and found that leave to appeal should be granted.
Is Procedural Fairness a Question of Law?
The Court noted a substantial body of authority and statutory contexts that classify procedural fairness issues as questions of law and that breaches of procedural fairness can amount to jurisdictional errors, which are questions of law.
The Court also noted its 2013 decision Seaspan Ferries Corporation v. British Columbia Ferry Services Inc., 2013 BCCA 55 (“Seaspan”), where it found that while procedural fairness issues “might be thought to raised mixed questions of law and fact”, the broad statutory language at issue properly allowed appeals on issues that are “predominately, if not exclusively, issues of law."
While the Court found Seaspan was not determinative of the appeal, it supports the broader principle that questions of law can encompass procedural fairness depending on the statutory context.
Ultimately, the Court characterized procedural fairness as a type or category of questions of law, despite the possible inclusion of issues of fact within them.
Can there be overlap on procedural challenges under s. 58 and 59?
In short, yes.
In its interpretation of s. 59, the Court found:
The text of s. 59 does not evince an intention to exclude questions of law listed in s. 58(1). The phrase “any question of law arising from an arbitral award” signifies breadth and there are no limiting words that would indicate the BCCA lacks jurisdiction to review those questions of law.
Overlapping provisions are presumed to be intended to operate fully unless they conflict, and there is no conflict between s. 58 and s. 59. Section 58 lacks any language to indicate that the Supreme Court is the exclusive venue for a challenge on one of more of the listed grounds. The legislature considered the circumstances in which an appeal of an arbitral award on a question of law should be precluded and decided to preclude such appeals only by agreement of the parties.
While the broad interpretation would lead to overlap, it best accorded with the objectives of efficiency and finality that are crucial to the arbitration process.
The Court noted that a two-route structure for challenging an arbitration award predates the current version of the Act. Previous versions provided a right to apply to the BCSC to set aside arbitral awards on specific grounds, as well as allowed an appeal to the BCCA on any question of law by consent or with leave. The material difference is that the current process is streamlined.
In prior versions of the Act, appeals on questions of law were directed, at first instance, to the BCSC, with rights to appeal an order of the BCSC to the BCCA.
This structure preserved the integrity of the arbitration system while advancing efficiency and finality by restricting challenges as of right to an expressly limited list of grounds, limiting appeals to questions of law, and requiring leave to appeal to ensure only matters of consequence may be appealed.
The Court found interpreting ss. 58 and 59 as providing distinct, but overlapping, routes to challenge an arbitral award on a question of law does not damage to the objectives of efficiency and finality. Parties would likely favour s. 58 where possible, because an appeal under s. 59 has the additional hurdle of obtaining leave (where party consent is not provided).
By contrast, the narrower interpretation would compromise these objectives where a party seeks to challenge an arbitration award on multiple questions of law, only some of which fall within the s. 58(1) grounds. In this case, the party would be forced to invoke both the s. 58 and s. 59 processes simultaneously.
The Bottom Line
Ultimately, the Court concludes that the broader, overlapping interpretation is preferred, which means that:
The BCCA can hear appeals on all question of law under s. 59, including those issues that may overlap with the grounds in s. 58.
The BCSC can hear set aside applications on the enumerated grounds of s. 58.
Future decisions may continue to shape this area of the law. For now, Green Light provides the potential for overlapping routes of review.