Appeal Allowed - Court Sends Back Overbroad Arbitral Award

On January 15, 2013, Ontario's Superior Court of Justice (Commercial List) allowed in part the appeal of an arbitrator's decision in Meridian Gold v. Southwestern Gold, a dispute respecting Peruvian gold mining rights. The appellant alleged that the arbitrator made several errors of law, which, per Ontario's Arbitration Act, 1991, could be appealed with leave. Justice Pattillo allowed the appeal, on the basis that the arbitrator erred by providing the respondent with a remedy which did not align with the appellant's breach of contract. This case illustrates how the wrong remedy in a breach of contract case, even where the claimant is successful, can result in an arbitration proceeding ending up before the courts – something that commercial parties which have opted for a commercial arbitration would wish to avoid in most cases. Particularly where a breach of contract cannot be resolved through a damage award, it is important to ensure that the arbitral award is