Vento Motorcycles filed an arbitral claim under NAFTA against Mexico, alleging that Mexico’s denial of preferential import tariffs caused substantial business losses.
The arbitral tribunal dismissed Vento’s claim, and the Ontario Superior Court declined to set aside the award.
Vento appealed, arguing it was denied procedural fairness because one of its witnesses was not allowed to submit additional evidence.
The Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (CIPPIC) sought to intervene on procedural fairness but was denied.
The appeal was scheduled for November 4, 2024. No monetary award was granted?.
2025 ONCA 82 Decision:
After the arbitration, Vento discovered that tribunal member Hugo Perezcano had communications with Mexican officials, including Mexico’s lead arbitration counsel, regarding potential appointments to arbitration rosters.
The application judge found these undisclosed communications created a reasonable apprehension of bias but refused to set aside the award, citing no real unfairness or practical injustice.
The Ontario Court of Appeal ruled that the reasonable apprehension of bias required setting aside the tribunal’s award, emphasizing that bias of one arbitrator tainted the entire tribunal.
The appeal was allowed, the arbitral award was set aside, and Vento was awarded $60,000 in appeal costs and $100,000 in application costs?.
Outcome:
The first decision upheld the arbitral award dismissing Vento’s claim.
The second decision overturned it due to bias, setting aside the award and awarding costs to Vento.
