A Case Of Interest: SCC Rules On Arbitrators' Ability To Award Interest In British Columbia

Commercial arbitration has a long, established history of allowing parties to resolve their disputes on their own terms. Despite this long history, the distinction between the scope of authority of arbitrators and courts is a subject that frequently arises. In British Columbia (Forests) v. Teal Cedar Products Ltd., the Supreme Court of Canada (SCC) considered the distinction between arbitrators and courts with respect to awarding interest. Specifically, the SCC considered whether arbitrators in British Columbia were subject to the same limitations as courts in ordering interest pursuant to B.C.'s Court Order Interest Act.

FACTUAL BACKGROUND

Teal Cedar Products Ltd. (Teal) is a forestry company that held a forest licence issued by the province (Province) to harvest timber in a particular area of B.C., including the right to cut a certain amount of timber known as an allowable annual cut. In 1999, following the creation of a provincial park, Teal's allowable annual