Opening the Gate: Kingsgate Takes the Standard of Review for Arbitral Appeals to the Supreme Court of Canada

Nearly seven years after Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (Vavilov), Canadian courts still disagree on one question:

When a party appeals a domestic arbitral award on a question of law, how much deference does the arbitrator get?

In British Columbia, the answer is none. In Vancouver School District No. 39 v. Kingsgate Property Ltd., 2026 BCCA 98 (Kingsgate), three justices of the British Columbia Court of Appeal held that questions of law on arbitral appeals are reviewed for correctness, although they split on the outcome. That was a departure from two decisions of the Supreme Court of Canada (SCC), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 (Sattva) and Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 (Teal Cedar), which made reasonableness the standard of review for appeals of commercial arbitration awards.

Other appellate courts are split. The Northwest Territories Court of Appeal has applied correctness (Northland Utilities Limited v. Hay River, 2021 NWTCA 1)[1]. The Manitoba Court of Appeal has applied reasonableness (Buffalo Point First Nation v. Buffalo Point Cottage Owners Association Inc., 2025 MBCA 72 (Buffalo Point))[2]. Ontario and Alberta appellate courts have left the question open (Kingsgate).[3] The SCC itself sidestepped the issue in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 (Wastech).[4]

Now, that day may be soon. On September 24, 2026, the SCC granted leave to appeal in Kingsgate, two months after granting leave in Buffalo Point. Two of the questions in the leave application concern the courts’ role in reviewing arbitral awards:

1. Has the SCC’s decision in Vavilov changed the applicable standard of review for appeals of commercial arbitral awards as set out in Sattva and affirmed in Teal Cedar?
2. When a reviewing court identifies a new legal framework, must that issue be remitted to the arbitral tribunal so that it may exercise its discretion within that framework?

The SCC’s answers may decide how much deference an arbitral award will be provided on a question of law in Canada.

1. Background to Kingsgate Dispute

The dispute concerns rent under a 99-year ground lease of the land beneath Kingsgate Mall. The landlord is the Vancouver School Board (“VSB”), and the current tenants are Kingsgate Property Ltd. and Beedie Development LP (together, “Beedie”).[5]

At each renewal, rent is 8¼% of the land’s market value, assessed as if the land were “ready for immediate development to [its] highest and best lawful use”. [6] If the parties cannot agree, market value is fixed by arbitration. The case turned on the word “immediate”.

The zoning permits two kinds of development. Retail development up to 1.0 floor space ratio (FSR) is available as of right (the “outright use”). Denser development, including residential, up to 3.0 FSR requires discretionary approval (the “conditional use”) and makes the land far more valuable.[7]

In 1999, an arbitral tribunal held that only the outright use was “immediate.” VSB was refused leave to appeal.[8]

In the 2022 arbitration, Beedie argued that issue estoppel, which prevents parties from relitigating an issue already decided between them, bound a new tribunal to that interpretation.[9]

The new tribunal reinterpreted the lease afresh and declined to apply estoppel. It read the 1999 award as requiring a use that could be approved with certainty and without delay.[10] By 2017, even outright-use permits took six to eight months. On that reading, no use qualified, and the 1999 interpretation was unworkable.[11]

The tribunal instead valued the land on the conditional-use basis at $116.5 million, for annual rent of about $9.6 million, rather than at $20 million on the outright-use basis.[12]

2. Procedural History

Supreme Court of British Columbia

The Supreme Court of BC granted Beedie leave to appeal on two questions of law: 1) whether the 2022 tribunal misidentified what the 1999 award had decided, and 2) whether it relied on irrelevant factors in declining to apply estoppel.[13]

Chan J. allowed the appeal. Both parties said they would win under either standard of review, so she did not decide which applied.[14] Chan J. held that the 2022 award was both unreasonable and incorrect,[15] and the 1999 award had decided that the “immediate” use was the fastest and most certain use, not a use that could be approved within a particular time.[16] The tribunal had also relied on two irrelevant factors: 1) a supposedly reduced interest in finality in private arbitration, and 2) its own view of the parties’ “true intentions”. [17] Rather than sending the matter back, Chan J. adopted the tribunal’s $20 million outright-use valuation and fixed annual rent at $1.65 million. [18]

BC Court of Appeal

Standard of review – correctness: All three judges agreed that correctness applies. Willcock J.A. held that the Court was no longer bound by Sattva, because Vavilov had replaced its framework. [19] Where legislation provides for an “appeal,” the ordinary appellate standards apply, and an arbitrator’s expertise no longer justifies deference. Parties who value finality can exclude appeals in their arbitration agreement. [20]

Outcome (2–1). Willcock J.A., dissenting, read the 1999 award as meaning “without delay,” not “faster than the alternative,” and would have restored the 2022 award. The majority (Winteringham J.A., Fleming J.A. concurring) held that the 2022 tribunal erred in two ways: 1) it reinterpreted the lease before asking what the 1999 award had decided, and 2) it relied on irrelevant factors. [21] The majority also upheld Chan J.’s decision not to send the matter back, and dismissed the appeal. [22]

Supreme Court of Canada

The parties’ positions on the two questions set out in our introduction are summarized below: [23]

3. Why these questions before the SCC matter

(a) Question 1: The standard of review in commercial arbitrations

Vavilov held that a statutory right of appeal attracts the ordinary appellate standards, but it did not address commercial arbitration directly. [28] The SCC has since described Vavilov’s approach to statutory appeals as “categorical” (Law Society of Saskatchewan v. Abrametz, 2022 SCC 29 (Abrametz), at para. 27). [29]

VSB’s central argument is that commercial arbitration is different in kind. It is a private process founded on the parties’ agreement, and it runs alongside the courts rather than within them. On this view, Vavilov’s framework concerns the relationship between courts and legislatures, whereas deference to arbitrators rests on party autonomy. [30] VSB also warns that correctness review could discourage parties from arbitrating in Canada. [31]

Beedie responds that Vavilov raised a question Sattva never considered: whether a legislature’s choice to provide an “appeal” affects the standard of review. [32]

With both Buffalo Point and Kingsgate before it, the SCC appears poised to answer the question this time.

(b) Question 2: When courts should send matters back.

On an appeal, a court may confirm, amend or set aside an award, or send it back to the arbitrator with the court’s opinion on the law. [33] The question is when a court should decide the matter itself.

VSB argues that once a court identifies a new legal framework, respect for the parties’ chosen decision-maker requires the tribunal to apply it. [34] It also relies on earlier BC decisions holding that courts reviewing arbitral awards cannot make supplementary findings of fact. [35] Beedie responds that Vavilov’s approach to remittal suits arbitration, because it guards against delay and an “endless merry-go-round” of reviews. [36]

Correctness review combined with a broad power to substitute would give courts the final word on both the law and the result. By contrast, in Green Light (discussed below), the Court of Appeal sent the issue back to the arbitrator after finding a breach of procedural fairness. [37]

(c) Additional question: departing from SCC precedent

Kingsgate also raises a question about the hierarchy of courts. The Court of Appeal declined to follow an SCC precedent that the SCC had never overruled, [38] , while the Manitoba Court of Appeal considered itself bound by it. [39] The SCC’s response may affect how lower courts treat its precedents beyond arbitration.

(d) A wider BC trend: Green Light

Kingsgate is part of a wider trend towards more extensive appellate review of arbitral awards.

In Green Light Solutions Corp. v. Kern BSG Management Ltd., 2025 BCCA 408 (Green Light), the Court of Appeal held that an alleged breach of procedural fairness is a question of law that can be appealed under s. 59(2) of the Arbitration Act, SBC 2020, c. 2. That appeal route overlaps with the separate right, under s. 58, to apply to the BC Supreme Court to set an award aside. [40]

When the appeal itself was heard, the Court found that the arbitrator had breached procedural fairness and sent the costs issue back to the arbitrator. [41]

Green Light and Kingsgate rest on a similar premise: an appeal from an arbitral award should be treated similar to other statutory appeals. Both rely on Abrametz. [42] Together, they mean that the courts play a larger role in reviewing arbitration awards, which some may argue runs counter to Canada’s pro-stance arbitration and the principle of party autonomy.

The SCC’s decision will determine whether that trend continues.