Executive Summary: Key Legal and Evidentiary Issues

• The appellant sought leave to appeal a procedural order arising from an arbitration between the parties over the sale of minerals.
   
• Central to the dispute was whether an arbitrator retains jurisdiction to reconsider a costs award after issuing a final decision on the matter.
   
• Section 59(4) of the Arbitration Act required the court to assess whether the proposed appeal met one of three statutory thresholds for granting leave.
   
• Doctrine of functus officio was examined to determine whether it applies to private arbitrators in the same manner as it applies to judges.
   
• A contractual clause in the parties' arbitration agreement purporting to bar appeals to any court factored heavily into the court's assessment.
   
• Ultimately, the court considered whether the proposed appeal carried sufficient merit to justify further scrutiny by a full division of the court.
   

Facts of the case

Silver Elephant Mining Corp. ("Silver Elephant") and Andean Precious Metals Corp. ("Andean") were parties to a Master Services Agreement ("MSA") and a purchase agreement, collectively the Transaction Agreements, under which Silver Elephant agreed to sell up to 800,000 tonnes of oxide material to Andean from its mining project in Bolivia. The agreements provided for three categories of payment, including additional consideration of USD $1 million payable if the spot price of silver exceeded a set threshold. That condition was met on December 18, 2024, but Andean refused to pay, asserting that Silver Elephant was in default of its contractual obligations. Silver Elephant terminated the Transaction Agreements on December 30, 2024, and commenced arbitration on January 14, 2025, seeking the USD $1 million payment plus pre-judgment interest. Andean counterclaimed for liquidated damages exceeding USD $1.2 million and the return of a USD $860,451 security deposit.

Following a four-day hearing, arbitrator Tina M. Cicchetti issued a Partial Final Award on January 26, 2026. She found none of Andean's defences made out, concluded that Silver Elephant's termination notice was valid, and held that Andean owed Silver Elephant USD $1 million in additional consideration. On the counterclaim, she rejected Andean's claim for liquidated damages but found that Silver Elephant owed Andean a security deposit of $274,553.55. Pre-judgment interest was awarded to both parties on their respective amounts. On costs, the arbitrator ordered each party to bear its own costs, citing Silver Elephant's lack of substantial success, its conduct in increasing Andean's costs, and its unjustified retention of the security deposit. Silver Elephant applied for reconsideration of the costs award, but the arbitrator dismissed the application on March 17, 2026 by Procedural Order No. 3, finding herself functus officio. Silver Elephant then sought leave to appeal that Procedural Order under section 59 of the Arbitration Act.

Policy and legislative provisions at issue

The application turned on section 59 of the Arbitration Act, S.B.C. 2020, c. 2. Section 59(3) permits a party to seek leave to appeal on any question of law arising from an arbitral award, unless the arbitration agreement expressly provides otherwise. Section 59(4) sets out three circumstances in which leave may be granted: where the importance of the result to the parties justifies court intervention and the point of law may prevent a miscarriage of justice; where the point of law is important to a class of persons of which the applicant is a member; or where the point of law is of general or public importance. Also central was section 16.10 of the arbitration agreement within the MSA, which stated that "[t]here shall be no appeal from the determination of the Arbitrator to any court," and that judgment on any award could be entered in any court with jurisdiction.

Reasoning and analysis

Justice Brundrett applied the three-part framework confirmed in Green Light Solutions Corp. v. Kern BSG Management Ltd., 2025 BCCA 408, requiring an extricable question of law, satisfaction of one of the section 59(4) circumstances, and an exercise of residual discretion. He accepted that Silver Elephant had identified a clear question of law, namely whether the doctrine of functus officio barred the arbitrator from reconsidering her costs award. Turning to section 59(4), he found the question important to the parties but was not persuaded that determination of the point would prevent a miscarriage of justice, since the arbitrator's reasons showed she had substantively engaged with the costs analysis despite not expressly citing the governing framework. He did accept that the question was important to the broader class of persons involved in arbitration proceedings, satisfying section 59(4)(b).

On residual discretion, Justice Brundrett gave significant weight to section 16.10 of the arbitration agreement, concluding that a plain reading barred appeals for any error, including errors of law, relying on ENMAX Energy Corporation v. TransAlta Generation Partnership, 2018 ABQB 142. He also found the merits of the proposed appeal doubtful, noting that this Court had previously applied the doctrine of functus officio to arbitrators in Bollhorn v. Lakehouse Custom Homes Ltd., 2024 BCCA 192, and Westnav Container Services Ltd. v. Freeport Properties Ltd., 2010 BCCA 33. He rejected the analogy to a judge's inherent jurisdiction to reconsider an order before entry, observing that arbitral tribunals, like administrative tribunals, possess no such inherent jurisdiction and that any reconsideration power must be grounded in statute, citing Premium Brands Operating GP Inc. v. Turner Distribution Systems Ltd., 2011 BCCA 75.

Ruling and overall outcome

Weighing the contractual prohibition on appeals and the limited merit of the proposed question of law, Justice Brundrett concluded that the appeal did not warrant scrutiny by a division of the court. He dismissed Silver Elephant's application for leave to appeal, a result favouring Andean. This decision did not itself order any monetary payment; it addressed only the procedural question of whether leave to appeal the costs-related Procedural Order should be granted, and no exact amount was determined or awarded in connection with this ruling.