Aroma Of Controversy: Stirring Up Arbitrator Disclosure Duties

The Ontario Court of Appeal's decision in Aroma Franchise Company Inc v Aroma Espresso Bar Canada Inc has reshaped the disclosure obligations of arbitrators, particularly in cases involving multiple appointments of an arbitrator by the same party or counsel. In reinstating an arbitral award that had been set aside, the Court clarified that the duty to disclose potential conflicts of interest under Article 12 of the Model Law is objective. It considers whether relevant circumstances would likely give rise to justifiable doubts about impartiality from the standpoint of a fair-minded and informed observer rather than through the eyes of the parties. At the same time, the Court's substantive decision, in some ways, goes against the trend in international arbitrations, and it will be important for parties considering international arbitration to assess potentially differing interpretations of the Model Law in any given jurisdiction.