Appeals Court Upholds $4.4 Million Payout for Tabile Grant

The Supreme Court and the Court of Appeal upheld an arbitrator decision in a case related to Tbaytel.

THUNDER BAY – The Ontario Court of Appeals has rejected an application to overturn an arbitrator’s decision that awarded Tbaytel nearly $4.4 million.

The case dates back to 2016, when Tbaytel decided to update its systems by purchasing a new software package from a Toronto-based supplier for $8.5 million.

The installation was due to be completed by July 2018, but Tbail terminated the contract in March of that year, alleging various violations.

Subsequently, an arbitrator decided that the contract had been breached, and that Tbaytel was entitled to a refund of $4.39 million.

The supplier then petitioned the Supreme Court to set aside the arbitration award and asked for leave to appeal.

In April 2021, a Supreme Court judge rejected both requests, but the Appeals Court agreed to review the case, and heard the matter earlier this year.

Its decision was made last week.

One of the main issues considered in the appeal was whether the arbitrator was right to resolve some of the issues in the case by way of a summary judgment.

In the justice system, a summary judgment is a procedural tool available in certain circumstances to expedite a decision without a formal trial.

Tepetel suggested in the arbitration that the various confessions made by the supplier’s representatives established many material facts and eliminated the need for detailed expert evidence and submission of documents.

The supplier’s attorney raised concerns about the availability of an expedited judgment motion, but did not object to setting a timetable for preparing and submitting the necessary materials.

In the written submissions that followed, the Company provided that the arbitrator had no jurisdiction to consider a summary judgment proposal without the consent of the parties.

However, it concluded in a February 2020 decision that certain claims of Tbaytel must be rendered expedited, and that Tbaytel has the right to terminate the Agreement and recover the money paid by it as well as other related damages.

In the Supreme Court, the judge who heard the supplier’s motion to overturn his order asserted that the arbitrator had the right to impose a summary judgment, citing part of the Arbitration Law which states that the arbitral tribunal may determine the procedure to be followed in the arbitration.

In the Court of Appeal, after a hearing in March of this year, the three-judge panel noted that the parties negotiated an arbitration agreement as part of the contract, and that they “crafted their own rules governing arbitration conduct and their selection of an arbitrator agreed upon by the parties meant a very limited role for judicial oversight over conduct or result of that arbitration.”

They said the agreement gave the arbitrator broad powers, including “the jurisdiction to consider and decide all applications.”

The judges added that if the parties had wanted to rule out the availability of summary judgment procedures, they would have said so in the agreement.

In addition to dismissing the appeal, the court ruled a $30,000 hearing costs for Tbaytel.

TBnewswatch asked TBaytel if it had completed a program project with another supplier.

A court spokesperson acknowledged the case’s positive outcome, but said “we cannot comment further on this outstanding matter.”

Joseph Finkel, a Toronto-based attorney who has worked on a wide range of civil and commercial litigation cases, commented earlier this year on the significance of the original Supreme Court ruling.

He maintained that the parties to the arbitration could enjoy the potential advantages of the summary judgment process (ie efficiency, cost savings, etc.) without having to bring their case before the courts, but according to the language of the arbitration agreement between the parties.

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