Executive Summary: Key Legal and Evidentiary Issues

• The Applicant sought a stay of an ongoing arbitration under section 13(7) of the Arbitration Act, 1991, pending its court challenge to the Arbitrator for reasonable apprehension of bias.
   
• No prior case law interpreted section 13(7) directly, so the court applied the common law test for stays, informed by the tripartite framework in RJR-MacDonald Inc. v. Canada (Attorney General).
   
• Central to the dispute was whether the Arbitrator's active questioning of witnesses crossed into improper cross-examination, creating an appearance that he had adopted the Respondent's position on facts and credibility.
   
• Justice Myers held that a stay under section 13(7) requires the Applicant to demonstrate a strong prima facie case rather than merely a serious issue to be tried, given the deference owed to arbitral independence.
   
• Requiring the Applicant to continue before the Arbitrator while a strong prima facie bias claim remained unresolved was found to constitute irreparable harm.
   
• Weighing the brief anticipated delay against the risk to the integrity of the arbitration, the court found the balance of convenience favoured a short stay.

Facts of the case

Atkinsréalis Construction (Pacific) Inc. (the Applicant) and GIP Construction Ontario East Ltd. (the Respondent) are parties to a commercial arbitration arising from a construction project. The Arbitrator, known for an active questioning style during proceedings, faced a recusal motion from the Applicant on December 17, 2025, after eight days of evidentiary hearings, on grounds of reasonable apprehension of bias. The Arbitrator dismissed that motion in a decision released April 18, 2026. On May 15, 2026, the Arbitrator ruled that the arbitration should be completed by the end of June 2026, reasoning that the parties had bargained for an expeditious process. The Applicant then brought this application to challenge the Arbitrator's refusal to recuse himself. The application hearing began July 15, 2026, but did not conclude that day; it is scheduled to resume September 22, 2026. Meanwhile, the arbitration itself was set to reconvene October 5, 2026, to hear two or three days of expert evidence. Given the timing overlap, the Applicant brought this motion to stay the arbitration until the recusal challenge could be fully heard and decided.

Policy and legislative provisions at issue

The motion turned on section 13(7) of the Arbitration Act, 1991, SO 1991, c 17, which provides that while a bias challenge application is pending, "the arbitral tribunal, including the challenged arbitrator, may continue the arbitration and make an award, unless the court orders otherwise." Justice Myers noted that this default rule reflects a legislative preference for allowing arbitrations to proceed absent a court order to the contrary, and that neither party could locate case law construing this specific subsection. Both parties agreed the general common law test for stays should apply, adapted to account for the fact that the underlying process is a commercial arbitration governed by statute.

Reasoning and analysis

Justice Myers found that the statutory scheme's emphasis on arbitral independence and deference to arbitrators' decisions meant that a stay under section 13(7) demands more than showing a non-frivolous or "serious issue to be tried." Instead, he applied the higher "strong prima facie case" standard, reasoning that this respects the presumption of independence enjoyed by arbitrators and cautions courts against readily interfering in arbitral proceedings. He noted the evidentiary record was already fixed, since the application relied on transcripts of the arbitration to date rather than live cross-examinations. On the merits, the Applicant argued the Arbitrator's questioning of witnesses effectively amounted to cross-examination aimed at undermining the Applicant's case. Justice Myers separately drew assistance from an article by arbitrators Glaholt and Rotterdam outlining acceptable areas of arbitrator questioning, observing that extensive cross-examination on the merits falls outside that outline. He took issue with the Arbitrator's own reasoning that his questioning could not constitute cross-examination merely because he was not a party and intended only to find the truth, observing that such logic would immunize any judicial or arbitral questioning from scrutiny regardless of its effect. He distinguished the facts from Dufferin v. Morrison Hershfield, where similar bias allegations against the same Arbitrator were dismissed, finding the interventions here appeared to go further. He was careful to note that this assessment remained preliminary, pending further submissions from the Respondent and a fuller review of the transcripts. On irreparable harm and balance of convenience, Justice Myers found these issues merged: given the strong prima facie case on bias, requiring the Applicant to appear before the Arbitrator before the challenge was resolved would cause irreparable harm, and the anticipated delay from a stay was brief and did not outweigh that harm. He relied on the Ontario Court of Appeal's guidance in Vento Motorcycles, Inc. v. Mexico, which characterized a reasonable apprehension of bias as compromising the integrity of the adjudicative process irreparably, not something to be balanced away for reasons of cost or inconvenience.

Ruling and overall outcome

Justice Myers granted the Applicant's motion, staying the arbitration pending the outcome of the underlying application challenging the Arbitrator's refusal to recuse himself. He made no final findings on the merits of the bias allegations, characterizing his conclusions as based on a preliminary assessment that the Applicant had established a strong prima facie case, subject to further submissions from the Respondent. The decision did not involve any monetary award, damages, or costs order — the ruling was limited to procedural relief in the form of a stay.