Facts
An intermediate residential resource and its representative association, the ARIHQ, claimed retroactive compensation from a Montréal health and social services centre, now part of Santé Québec, under a 2018 national agreement containing an arbitration clause. The centre refused, and about three years later the association filed a notice of disagreement and referred the matter to arbitration. The sole arbitrator dismissed the claim before the merits, holding that the notice was out of time under the contractual deadlines. The only authorities supporting his legal analysis, including purported Quebec Court of Appeal decisions and a doctrinal article, did not exist or matched unrelated decisions. The applicants sought annulment.
Question
Under articles 646 and 648 of the Quebec Code of Civil Procedure an award may be annulled only on limited grounds. The applicants relied on two. First, they argued that enforcing a 90-day contractual notice period, shorter than the three-year prescription in the Civil Code of Québec, was contrary to public order. Second, they argued that the non-existent authorities showed that the reasons had been generated at least in part by generative AI, so that the arbitrator had delegated his decision-making and the arbitral procedure agreed by the parties had not been followed.
Decision
Justice Martin F. Sheehan rejected the public order ground, since an annulment application is not an appeal on the correctness of the arbitrator’s interpretation. He upheld the procedural ground under article 646(3). Relying on party autonomy, the duty to give reasons personally, the secrecy of deliberations and the Canadian Judicial Council’s guidance that decision-making may not be delegated to a computer program, he found on a balance of probabilities that the arbitrator had abdicated part of his decision-making role. The non-existent authorities lay at the core of the reasoning and undermined the integrity of the process. The award was annulled and the parties were directed to appoint a new arbitrator within 60 days.
Why it matters
Some commentators describe it as the first publicly reported decision annulling an arbitral award because of AI-generated reasoning. The court did not prohibit AI: using it as a research or drafting aid, or an isolated citation error, will not automatically justify annulment. The test is contextual and looks at the seriousness of the defect, its effect on the integrity of the process and whether it likely affected the result. The line it draws runs between assistance, which is permitted, and delegation of the decision, which is not.