Case: Vento Motorcycles, Inc. v. United Mexican States, 2024 ONCA 480

Keywords: motorcycles; international commercial arbitration; motion for leave to intervene

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The issue in dispute involves the United Mexican States’ denial of preferential import payment tariffs to motorcycles assembled by Vento Motorcycles Inc. in the United States and exported to Mexico. Vento says this results in substantial business losses and the destruction of its business. Vento commences an arbitral claim against Mexico pursuant to Chapter 11 of the North American Free Trade Agreement (“NAFTA”). (See para. 2).

The Tribunal dismisses Vento’s claim, and the Application Judge (Vermette J.) declines to set aside the dismissal. Vento appeals to the Court of Appeal, arguing it was denied procedural fairness as a result of the Tribunal’s decision to “preclude one of Vento’s witnesses from submitting additional evidence or testimony in response to a credibility challenge by Mexico”. (See para. 4). The Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic (“CIPPIC”) brings a motion for leave to intervene, pursuant to Rule 13.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. (See para. 1). Vento consents to CIPPIC’s intervention, but Mexico opposes. (See para. 9). Fairburn A.C.J.O., for the Court of Appeal, dismisses CIPPIC’s motion for leave to intervene. (See para. 24).


The underlying procedural fairness issue raised by Vento is an interesting one. There is disagreement about the applicable test for procedural unfairness under the “Model Law” incorporated into Ontario law under Schedule 2 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5.

As set out by Fairburn A.C.J.O., the test applied by the Application Judge was whether the Tribunal’s conduct was “sufficiently serious to offend our most basic notions of morality and justice”. For the Application Judge, judicial intervention for alleged violations of due process under the “Model Law” are warranted “only when the arbitral tribunal’s conduct is so serious that it cannot be condoned under Ontario law”. (See para. 6).

Vento says,

    • that test has become obsolete with the introduction of Article 2A(1) into the Model Law, which provides: “[i]n the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith”; and
    • the correct test was articulated by the Judicial Committee of the Privy Council in Gol Linhas Aereas SA (formerly VRG Linhas Aereas SA) v. MatlinPatterson Global Opportunities Partners (Cayman) II LP and others, 2022 UKPC 21, at para. 76: “[t]he court should be seeking to identify and apply basic minimum requirements which would generally, even if not universally, be regarded throughout the international legal order as essential to a fair hearing.” (See para. 7).

The appeal, in which this issue will be argued, is currently listed to be heard on November 4, 2024. (See para. 3).

The proposed intervener, CIPPIC, sought to participate and advance its own view of what the applicable test should be. In particular, CIPPIC says the proper threshold for setting aside an arbitral award is materiality. In other words, unless the procedural fairness violation can be shown to have reasonably affected the outcome (i.e., “but for the procedural fairness violation, the outcome may reasonably have been different”), there is no basis for appellate intervention. (See para. 8).

In dismissing CIPPIC’s motion for intervention, Fairburn A.C.J.O. considered and applied the test described by the Court of Appeal in Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd. (1990), 1990 CanLII 6886 (ON CA) at p. 167, Foster v. West, 2021 ONCA 263 at para. 10, and Reference re Greenhouse Gas Pollution Pricing Act, 2019 ONCA 29, at para. 8. The following factors are relevant to the determination under Rule 13.03(2) of the Rules of Civil Procedure:

    • the nature of the case;
    • the issues which arise; and
    • the likelihood that the proposed intervener can make a “useful contribution to the resolution of the appeal without causing injustice to the immediate parties”. (See para. 12).

To these factors, Fairburn A.C.J.O. added a further note that where the dispute is private as opposed to one involving “the state”, the standard to be met is “more onerous or more stringently applied”. (See para. 13; Jones v. Tsige, 2011 CanLII 99894 (ON CA), at para. 23).

Against this test, Fairburn A.C.J.O. emphasized that CIPPIC had not submitted a draft factum, noting that “[w]hile CIPPIC provided a high-level overview of its intended submissions, providing a draft proposed factum would have identified the authorities, arguments, and references to the travaux préparatoires upon which CIPPIC would rely, and permit the parties and Court to know CIPPIC’s precise position.” (See para. 16).

Ultimately, while Fairburn A.C.J.O. accepted that CIPPIC has “expertise in its area [i.e., “to advocate in the public interest on matters arising at the intersection of law and technology”] and undoubtedly does important work”, leave to intervene was dismissed because:

    • there was no sufficient link between CIPPIC’s expertise – the intersection of law and technology – and the particular issue;
    • no explanation was provided as to how CIPPIC’s proposed arguments were informed by its unique perspective on the issues before the Court of Appeal;
    • the nature of the case did not support the participation of an intervener to supplement the “detailed arguments for and against the test applied by the Application Judge” – “[p]articularly without the assistance of a draft factum”; and
    • the intervention “runs an unjustified risk of expanding the scope of the appeal, increasing cost and complexity, and causing injustice to the immediate parties”. (See paras. 18-23).

For future reference, it would appear that the Court of Appeal may prefer that proposed interveners to submit a draft factum at the leave stage – or, the Court of Appeal is signalling to us that strategically, doing so is a good idea. (See para. 16). It is unclear whether same is especially so when, as in this case, the Court is applying the “more onerous” standard described in Jones v. Tsige, 2011 CanLII 99894 (ON CA) at para. 23. However, to be extra careful, submitting a draft factum would certainly be well-considered in light of Fairburn A.C.J.O.’s comments.

On the other hand, one may reasonably ask whether asking a proposed intervener to submit a draft factum at the leave stage is unduly prohibitive. For example, the funding of interventions is, itself, often predicated on participation at the appeal. The approach taken in this case strongly indicates that proposed interveners must be prepared to fully fund an intervention with no guarantee that their efforts will be accepted or considered in the appeal proper. May now simply be the price of admission?

Counsel for the Appellant: John Terry (Torys LLP, Toronto) and Myriam Seers (Agora Law, Toronto)

Counsel for the Respondent: Vincent DeRose, Jennifer Radford, and Stéphanie Desjardins (Tereposky & Derose LLP, Toronto)

Counsel for the Proposed Intervener: James Plotkin and Courtney March (Gowling WLG, Ottawa)

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