The Appeal by Team Transport from the dismissal of its application for judicial review of the decision of two joint arbitrators was dismissed where the Court found that there was no reasonable apprehension of bias and Team Transport’s motive appeared to be a collateral attack on the legal validity of an Agreement which had been incorporated into an Order in Council, the constitutionality of which had been upheld

Administrative law – Labour law – Arbitration – Arbitration agreements – Terms of agreement – Arbitrators – Powers – Judicial review – Appeals – Bias – Legislation – Orders-in-council – Validity – Jurisdiction

Team Transport Services Ltd. v. Klair, [2008] B.C.J. No. 953, British Columbia Court of Appeal, May 28, 2008, M.A. Rowles, N.V. Newbury and R.T.A. Low JJ.A.

Team Transport is a trucking company in the business of transporting cargo containers to and from the Port of Vancouver. In the summer of 2005, a group of truckers withdrew their services from various trucking companies, including Team Transport. The purpose of the service withdrawal was to pressure the trucking companies to fix an industry-wide hauling rate. The Federal and Provincial Governments responded to the dispute by jointly appointing Vincent Ready as a Facilitator. In addition, the Provincial Government appointed Peter Cameron to assist Mr. Ready. Mr. Ready recommended that the Association representing the truckers and the trucking companies sign a Memorandum of Agreement, which was subject to ratification. The recommendations were not accepted by all parties, and initially Team Transport did not sign the Agreement. In July 2005, the Governor in Council issued an Order in Council (the “OIC”), which was later amended adding a requirement that the Port Authority establish a licensing system under which trucking companies would be required to sign and comply with the Agreement, including the arbitration provision, as a condition of receiving a licence to access the Port. Team Transport and another trucking company challenged the jurisdiction of the Governor in Council, on the basis that the OIC exceeded its jurisdiction. This application was dismissed.

Mr. Klair requested a hearing under the Arbitration provision, complaining that his termination by Team Transport contravened the Agreement. Team Transport objected to the referral to Arbitration, taking the position that the Agreement was unenforceable, as it was the product of coercion and intimidation by the truckers through their service withdrawal. Team Transport applied to the Arbitration Board, requesting that Messrs. Ready and Cameron recuse themselves from hearing issues related to the legality of the Agreement, because of their participation in the facilitation process and their recommendations to the Government. Team Transport submitted that it would call evidence to support an argument that the Agreement was illegal and void as a matter of public policy. Team Transport submitted that there was an apprehension of bias because Mr. Ready was being asked to rule on the legality of an Agreement that came out of his recommendations to the Government. This argument was later extended to express concern about Mr. Cameron’s involvement in the process. The Arbitrators received Written Argument on the issue and found that Team Transport had not established a basis for a finding of reasonable apprehension of bias on their part and dismissed the application. In June 2007, Team Transport sought a declaration in Supreme Court that the Arbitrators committed an arbitral error by refusing to recuse themselves from hearing Mr. Klair’s complaint. On June 14, 2007, Silverman, J. dismissed Team Transport’s application for judicial review. The reviewing Judge held that the legality of the MOA was not an issue which the Arbitrators could properly consider and, hence, the allegations of bias were irrelevant to any issue which was properly before them for their consideration. The learned justice found that the involvement of the Co-Chairs in this matter was as independent neutrals, with a mandate to assist the parties in reaching their own settlement. Team Transport appealed this decision.

The Court of Appeal held that the Chambers Judge was correct in finding that the Arbitrators had no power to inquire into the legal validity of the Agreement. The Agreement was no longer a stand alone document, as it had been incorporated into the Amended OIC. Therefore the Arbitration was about an alleged breach by Team Transport of a licence condition, not about an alleged breach of the Agreement. The Court held that there could be no reasonable apprehension of bias with respect to issues raised by Team Transport that the Arbitrators had no power to resolve. The Court further found that there was no suggestion of actual bias. The two Arbitrators acted together as a neutral third party in recommending the Agreement as a resolution to the dispute. There was no suggestion that either Arbitrator, at any time, advocated for either side. The process leading to the Agreement was not adjudicative and neither of the Arbitrators gave directions or made rulings. The Court concluded that there was no reason why the Arbitrators could not be impartial, and be seen to be impartial, in determining the substance of Mr. Klair’s complaint and dismissed the appeal.

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