Procedural Posture

This document is a judgment by the Court of Appeal for Ontario dismissing an appeal brought by the United Mexican States (the "Appellant") against a lower court decision that declined to set aside an international arbitral award. The underlying arbitral tribunal had found the Appellant liable for breaching the fair and equitable treatment standard under Article 1105 of the North American Free Trade Agreement (NAFTA), awarding the respondents over $80 million in damages.

Issues and Positions

The Appellant advanced two primary grounds of appeal. First, it argued that the application judge applied an incorrect standard of review when assessing the arbitral tribunal's decision. Second, the Appellant contended that the arbitral award should have been set aside on the basis of procedural unfairness, alleging that it was deprived of a full and fair opportunity to present its case, particularly concerning documentary production and judicial review issues.

Court's Analysis and Decision

The Court of Appeal rejected both grounds, finding no reversible error. The Court held that the application judge correctly articulated and applied the standard of review, which permits intervention only when a tribunal's conduct offends basic notions of morality and justice. The Court further affirmed the lower court's finding that no procedural fairness breach occurred during the heavily contested nine-year arbitration. The Court characterized the Appellant's arguments regarding documentary production as selectively isolating routine and inconsequential orders, noting that the Appellant's submissions on judicial review occupied a negligible portion of its overall pleadings. Consequently, the Court dismissed the appeal and ordered the Appellant to pay the respondents $60,000 in costs.