On May 30, 2017, the Ontario Superior Court of Justice delivered its decision in Cricket Canada v Bilal Syed, whereby it partially allowed an application by Cricket Canada, a national sports organization incorporated under the CNCA, to set aside in part an arbitral award (the “Award”) that had ordered Cricket Canada to include specific provisions in its by-laws in order to implement the arbitrator’s decision.
The Award concerned a claim by a candidate for Cricket Canada’s board of directors who, after an unsuccessful bid for directorship, challenged the organization in arbitration before the Sport Dispute Resolution Centre of Canada (the “SDRCC”). Among other things, the claimant argued the election had not been carried out in accordance with Cricket Canada’s by-laws, and that the process had been compromised by discrimination and a lack of neutrality.
At the end of the proceeding, the arbitrator found no discrimination. However, he did find some “improprieties” in the election process. Specifically, the Award ordered Cricket Canada to amend its by-laws to include the following: i) that any person involved in selecting the members of the Nomination Committee be prohibited from running in the election; ii) that candidates who, as members of the board of a provincial sports organization, had voting rights to elect the board of Cricket Canada, must resign their position before the election; and iii) to prohibit the exchange of benefits for votes.
Cricket Canada brought an application before the Ontario Superior Court of Justice (“Court”) to challenge the portion of the Award instructing it to amend its by-laws. It alleged that, even though there was no formal arbitration agreement as required by Cricket Canada’s dispute resolution policy, the extent of the jurisdiction granted to the arbitrator was reflected in the provisions of the SDRCC Code, as well as in the party submissions in the arbitration. The Court agreed these documents did not grant the arbitrator the jurisdiction to order a change in the by-laws and policies of Cricket Canada because these were not part of the dispute. In the words of the Court: “[w]hile the Arbitrator could consider the by-laws as they affected [the claimant’s] candidacy, he had no jurisdiction to tell Cricket Canada that they should be changed.”
In the view of the Court, the aspects of the Award challenged by Cricket Canada were each a “core issue of internal governance” and outside the scope of authority of the arbitrator, who had been called to determine the procedural fairness of the election process and not the rules that governed that process, provided such rules were in compliance with the CNCA. Following previous decisions suggesting that, absent gross irregularities in the electoral process, a decision maker should not readily interfere with the internal governance of a corporation, the Court asserted that “[n]on-profit organizations […] should not be required to adhere rigorously to all of the technical requirements of corporate procedure for their meetings as long as the basic process is fair.” Finally, the Court concluded that introducing changes to Cricket Canada’s by-laws, policies and procedures was a matter for the members to decide after their own negotiations and consultations, and could not be imposed unilaterally by the arbitrator.