Alberta Court of Appeal clarifies when an arbitral award may be set aside for unfairness


On June 9, 2022, the Alberta Court of Appeal discussed s. 45(1)(f) of Alberta's Arbitration Act (the Act) in ENMAX Energy Corporation v TransAlta, 2022 ABCA 206. The Court outlined when courts may set aside an arbitral award for unfairness arising from incomplete record disclosure.

The decision highlights the need to exercise precise diligence in carrying out record disclosure. A party must properly assert its access to an opposing party's records, and be wary of the consequences of making tactical decisions not to. Arbitrators and arbitration panels will not hold parties' hands in record disclosure.


An arbitration panel adjudicated the underlying dispute between TransAlta Generation (TransAlta) and the appellants, ENMAX Energy Corporation (ENMAX) and the Balancing Pool (the Arbitration).

The panel found in TransAlta's favour.

ENMAX and the Balancing Pool challenged the arbitral award under s. 45(1)(f) of the Act. ENMAX and the Balancing Pool argued that TransAlta did not disclose relevant and material records during the Arbitration (the Records), and that this gap in the evidence led to the panel's conclusion. The Chambers Judge dismissed the application, finding that the Records' exclusion did not rise to the level of manifest unfairness required to set aside the arbitral award under s. 45(1)(f) of the Act. ENMAX and the Balancing Pool appealed.


Did the Chambers Judge err in finding that the exclusion of the Records was not manifestly unfair under s. 45(1)(f) of the Act?


1. Principles that apply when a court reviews an arbitration proceeding

Based on the established jurisprudence, the Court of Appeal highlighted the following important general principles that apply when a court reviews arbitration proceedings:

  • Parties to an arbitration are entitled to a fair hearing, not a perfect hearing;
  • The overall fairness of the proceedings must be considered, not individual rulings;
  • Parties must take advantage of and exercise due diligence in pursuing issues and cannot later complain of some perceived unfairness resulting from their failure to do so;
  • Not every refusal to admit relevant evidence is a breach of natural justice; and
  • An arbitral award may only be set aside because of unfairness where something of a significant nature is required, or because excluded evidence was crucial to the case being presented. 

2. The interpretation of s. 45(1)(f) of the Act

Section 45(1)(f) of the Act states:

On a party's application, the court may set aside an award on any of the following grounds:

(f) the applicant was treated manifestly unfairly and unequally, was not given an opportunity to present a case or to respond to another party's case, or was not given proper notice of the arbitration or of the appointment of an arbitrator;

The Court of Appeal explained that s. 45(1)(f) focuses on the elements of natural justice and procedural fairness, and it is not intended to override arbitrators' discretion on procedural matters. Rather, courts must show deference to the arbitrators' procedural choices. 

The specific phrase "treated manifestly unfairly and unequally" in s. 45(1)(f) considers how apparent the unfairness is — it requires an assessment of whether the unfairness is obvious or clear. However, the procedural rigors of civil litigation do not apply to arbitrations under the Act. Consequently, not every procedural breach during an arbitration will result in judicial intervention.

The Court of Appeal also clarified that s. 45(1)(f) of the Act must be construed "narrowly and only to ensure the [arbitral] proceedings are not fundamentally or fatally flawed" (emphasis added). If the alleged unfairness does not impact the proceedings in a meaningful way, then it cannot justify setting aside an arbitration award under s. 45(1)(f).

Thus where excluded evidence is at the root of the alleged unfairness, the arbitral award may not be set aside unless that evidence was crucial to the party's case. To make this assessment, a reviewing court must look at the arbitration panel's reasons and whether the lack of evidence affected the arbitration panel's conclusions.

3. Determining unfairness in the Arbitration

On appeal, ENMAX and the Balancing Pool took issue with how TransAlta disclosed records over the course of the Arbitration. They alleged that TransAlta failed to produce the Records, to their detriment. They made this complaint even though: (i) ENMAX chose to stop seeking the Records during the Arbitration; (ii) the Arbitration panel advised the Balancing Pool that it could apply to the Court for the Records, and the Balancing Pool chose not to; and (iii) ENMAX and the Balancing Pool chose not to request the Records when they were alerted to their potential existence through additional (surreply) evidence that TransAlta provided.

The Court of Appeal acknowledged that the relevance of records can become more significant over the course of an arbitration. Given that reality, the Court of Appeal emphasized that as records become material and issues crystallize, parties must reassert their position on disclosure. That is true regardless of the method of disclosure adopted in an arbitration. Indeed, the Court noted that: "the system hinges on the integrity and diligence of the litigants in ensuring full disclosure is made, as well as the obligation of counsel to advise clients of their disclosure obligations".

On the facts of the case, the Court of Appeal concluded that while the Arbitration panel did not order production of the Records, it did not foreclose it either. ENMAX and the Balancing Pool had the opportunity to request further disclosure, but chose not to. Consequently, there was no manifest unfairness in the process.

4. Result

The Court of Appeal determined that the Chambers Judge did not commit a palpable and overriding error. Even though TransAlta did not disclose the Records, the Arbitration was not manifestly unfair, as ENMAX and the Balancing Pool still had the opportunity to present their case and respond to TransAlta's case.


The Court of Appeal clarified the indicia required to set aside an arbitral award under s. 45(1)(f) of the Act. A court will not set aside an award under s. 45(1)(f) unless the arbitration process was obviously and clearly unfair. 

This case emphasizes the importance of being proactive in asserting rights to record disclosure in arbitration, and of voicing concerns on record disclosure to the arbitration panel in a timely manner.

Parties can benefit from having counsel who are experienced in arbitration to help them navigate these types of disclosure issues as they arise.

If you need help or strategic advice on these types of matters, reach out to a member of our litigation group. BD&P is in your corner, we are here to help you every step of the way.