In the Court of Appeal of Alberta  
Citation: ENMAX Energy Corporation v TransAlta Generation Partnership, 2022 ABCA  
206  
Date: 20220609  
Docket: 1901-0237AC  
1901-0235AC  
Registry: Calgary  
1901-0237AC  
Between:  
ENMAX Energy Corporation  
Appellant  
(Applicant)  
- and -  
TransAlta Generation Partnership  
Respondent  
(Respondent)  
1901-0235AC  
And Between:  
The Balancing Pool  
Appellant  
(Applicant)  
- and -  
TransAlta Generation Partnership  
Respondent  
(Respondent)  
_______________________________________________________  
The Court:  
The Honourable Justice Marina Paperny  
The Honourable Justice Patricia Rowbotham  
The Honourable Justice Jo'Anne Strekaf  
_______________________________________________________  
Memorandum of Judgment  
Appeal from the Decision by  
The Honourable Justice P.R. Jeffrey  
Dated the 26th day of June, 2019  
Filed on the 6th day of November, 2019  
(2019 ABQB 486, Docket: 1601 16992)  
_______________________________________________________  
Memorandum of Judgment  
_______________________________________________________  
The Court:  
Introduction  
[1]  
The duty to comply with the rules of natural justice and procedural fairness is fundamental  
to a fair hearing. The nature and extent of that duty are fluid, depending on the context of the  
dispute, the issues to be decided and, importantly, the nature of the forum, whether that be a court,  
an administrative tribunal or, as in this case, an arbitral panel.  
[2]  
The Arbitration Act, RSA 2000, c A-43 (the Act), which governs domestic arbitrations in  
Alberta, expressly requires an arbitral tribunal to treat the parties equally and fairly (section 19(1))  
and give them an opportunity to present their case and meet that of the other side (section 19(2)).  
The Act also provides that a court may, on the application of a party, set aside an arbitration award  
if there is a fundamental flaw in the process or the make-up of the tribunal, including if the  
applicant was treated “manifestly unfairly and unequally” or “not given an opportunity to present  
a case or to respond to another party’s case”: section 45(1)(f).  
[3]  
The appellants say that, in the course of a lengthy and complex commercial arbitration,  
they were treated “manifestly unfairly and unequally” by the arbitration panel and not given an  
opportunity to present their case and that the arbitration award should therefore be set aside. This  
appeal requires us to consider what constitutes manifest unfairness such that judicial intervention  
in setting aside the award is warranted.  
[4]  
The fact that the issue arises in the arbitral context is important. The Act sets the guidelines  
and rules for parties who either choose, or are required, to use arbitration to resolve their disputes,  
recognizing that arbitration is intended to be timelier and more private, allow for specialized  
expertise, and offer finality. The Act intentionally limits access to the court system. An appeal to  
the court from an arbitration award is permitted only if the parties’ arbitration agreement so  
provides (section 44(1)) or if the court grants permission to appeal on a question of law (section  
44(2)). In this case, the arrangement that governs the parties’ relationship expressly precludes an  
appeal and permission to appeal, although sought, was not granted: see ENMAX Energy  
Corporation v TransAlta Generation Partnership, 2018 ABQB 142.  
[5]  
Section 45, pursuant to which the appellants made their application, allows the court to set  
aside an award in specific and limited circumstances. The chambers judge found those  
circumstances did not exist and declined to set the award aside. The matter before the arbitration  
panel was complex and has significant financial implications for the parties, but the specific issue  
raised and decided by the chambers judge was relatively discrete. The issue before this court on  
appeal is likewise narrow: did the chambers judge err in concluding that the arbitration panel’s  
Page: 2  
rulings on document disclosure with respect to one matter did not prevent the appellants from  
making their case in this multi-party commercial arbitration nor result in manifest unfairness. For  
the reasons that follow, we have determined that there was no manifest unfairness, and the  
chambers judge did not err in declining to set aside the arbitration award.  
Brief background  
[6]  
The dispute arises out of an arbitration between the respondent, TransAlta Generation  
Partnership (TransAlta), and the appellants, ENMAX Energy Corporation (ENMAX) and the  
Balancing Pool. TransAlta owns and operates the Keephills Generating Units. TransAlta, as  
owner, entered into a Power Purchase Arrangement (PPA), created pursuant to the Power  
Purchase Arrangements Determination Regulation, Alta Reg 175/2000, to supply electrical power  
from Keephills Generating Unit #1 (the Unit) to ENMAX, as buyer. The Balancing Pool is  
established by the Electric Utilities Act, SA 2003, c E-5.1, and has financial obligations under the  
PPA. It is entitled to participate in any arbitration between an owner and a buyer.  
[7]  
On March 5, 2013, the Unit “tripped” and went off-line for 216 days.  
[8]  
The issue underlying the dispute is whether the losses from the Unit being off-line should  
fall on the owner, TransAlta, or on ENMAX and the Balancing Pool. TransAlta claimed the  
shutdown was an event of force majeure, as defined in the PPA. If the event is a result of force  
majeure the Balancing Pool is required to pay TransAlta’s fixed and variable costs of generation,  
and TransAlta is relieved of its obligation to pay ENMAX for the time the Unit was off-line.  
However, if the shutdown was a foreseeable part of normal operations, then TransAlta is required  
to pay compensation in the form of an Availability Incentive Payment. The stakes are high. During  
the period the Unit was off-line, ENMAX incurred between $128 million to $168 million in costs;  
the Balancing Pool incurred $40 million.  
[9]  
TransAlta claimed force majeure. ENMAX and the Balancing Pool disagreed.  
[10] The dispute was referred to arbitration under the Act, as required by Article 19.4 of the  
PPA. The arbitration panel, in a lengthy award decision, concluded that the shutdown of the Unit  
was an event of force majeure as defined in the PPA. The arbitration panel found TransAlta had  
acted in accordance with Good Operating Practice, or GOP, pursuant to its obligations under the  
PPA, and that the circumstances were beyond TransAlta’s reasonable control.  
[11] ENMAX and the Balancing Pool sought to challenge the award. They each applied for  
permission to appeal the award pursuant to section 44(2) of the Act, which contemplates appeals  
on questions of law from an arbitration panel to the Court of Queen’s Bench with permission of  
the court in circumstances where the arbitration agreement does not provide for an appeal.  
Page: 3  
However, the PPA expressly precludes an appeal on any ground, and the chambers judge  
concluded no appeal of the arbitration award was available: see Article 19.4(f) of the PPA and  
ENMAX Energy Corporation v TransAlta Generation Partnership, 2018 ABQB 142. That earlier  
decision of the chambers judge not to grant permission to appeal pursuant to section 44(2) was not  
appealed to this Court, and is not before us now.  
[12] The appellants also applied to set aside the award pursuant to section 45 of the Act, which  
allows the court to “set aside” awards on specified grounds:  
45(1) On a party’s application, the court may set aside an award on any of the  
following grounds:  
(a) a party entered into the arbitration agreement while under a legal incapacity;  
(b) the arbitration agreement is invalid or has ceased to exist;  
(c) the award deals with a matter in dispute that the arbitration agreement does  
not cover or contains a decision on a matter in dispute that is beyond the  
scope of the agreement;  
(d) the composition of the arbitral tribunal was not in accordance with the  
arbitration agreement or, if the agreement did not deal with the matter, was  
not in accordance with this Act;  
(e) the subject-matter of the arbitration is not capable of being the subject of  
arbitration under Alberta law;  
(f) the applicant was treated manifestly unfairly and unequally, was not given  
an opportunity to present a case or to respond to another party’s case, or was  
not given proper notice of the arbitration or of the appointment of an  
arbitrator;  
(g) the procedures followed in the arbitration did not comply with this Act or  
the arbitration agreement;  
(h) an arbitrator has committed a corrupt or fraudulent act or there is a  
reasonable apprehension of bias;  
(i) the award was obtained by fraud.  
Page: 4  
[13] It is evident from this list that the Act contemplates the setting aside of awards on the basis  
of fundamental flaws in the establishment of the arbitration or its processes. The Act as a whole  
limits judicial intervention and contemplates that arbitration awards will bind the parties except in  
limited circumstances: see, e.g., sections 37 and 44. The provisions of section 45 permit the court  
to set aside an award in circumstances that go to the heart of the arbitration itself. Section 45 is not  
a substitute for an appeal or a judicial review and ought not be used to circumvent the statutory  
limitations on court intervention.  
[14] The appellants’ application to set aside the award was based on section 45(1)(f); they  
argued that procedural decisions made by the arbitration panel in relation to certain document  
disclosure resulted in “manifest unfairness” and deprived them of a fair “opportunity to present a  
case or to respond to another party’s case”. The application to set aside was dismissed by the  
chambers judge: ENMAX Energy Corporation v TransAlta Generation Partnership, 2019 ABQB  
486. This is the decision under appeal. For convenience, we will refer to the arbitration panel’s  
decision as “the award” and the decision of the chambers judge as “the reasons”.  
[15] The specific records that the appellants say should have been disclosed related to  
TransAlta’s reliance on a diagnostic test used to determine the location of a problem with the Unit,  
known as the Tennessee Valley Authority, or TVA, test. As part of their submissions in the  
arbitration, the appellants took the position that TransAlta unreasonably relied on the TVA test as  
showing that the problem with the Unit originated with the top T5 stator bar located inside the  
generator, and that TransAlta’s decision to take the generator off-line to do a complete stator  
rewind was unreasonable. In addition to arguing that the TVA test was not widely recognized as a  
reliable primary diagnostic test, ENMAX sought records relating to TransAlta’s experience with  
the TVA test at its other facilities (the fleet-wide records). Records with respect to the Keephills  
generator were disclosed, but the appellants did not receive records relating to the conduct of TVA  
tests at other TransAlta generating facilities that had not been taken off-line (and were not the  
subject of the dispute). In its procedural orders, the arbitration panel declined to require TransAlta  
to provide the fleet-wide records. The appellants submit the undisclosed records were relevant and  
material to their case and that the reasons for the award make clear that the arbitration panel relied  
on the absence of the undisclosed records to support its conclusion that the event was the result of  
force majeure.  
[16] The chambers judge identified issues with some of the procedures followed by the  
arbitration panel, but declined to set aside the award, stating at para 147 of the reasons:  
I dismiss the applications to set aside the Award. When the entirety of the process  
is considered within the particular circumstances of the dispute, I do not find any  
manifest unfairness or inequality, nor do I find the Applicants were prevented from  
Page: 5  
meeting the case of TransAlta. This is my conclusion not just on the individual  
concerns raised about the Panel’s process, but when assessing their cumulative  
effect.  
Issues on appeal  
[17] Permission to appeal was granted on one issue: whether the chambers judge erred in  
concluding the appellants were not treated manifestly unfairly and unequally, or prevented from  
presenting their case or responding to TransAlta’s case: ENMAX Energy Corporation v TransAlta  
Generation Partnership, 2020 ABCA 68.  
[18] In addressing that issue, it is necessary to consider the correct approach to an application  
to set aside pursuant to section 45, and whether the chambers judge erred in his assessment of  
whether the process adopted by the arbitration panel, in the whole context of the arbitration,  
resulted in manifest unfairness such that judicial intervention in the award is warranted. There are  
two aspects to that question: Did the arbitration panel deny the appellants document disclosure as  
they allege? Did the absence of the undisclosed records deny the appellants the opportunity to  
present their case or result in manifest unfairness within the meaning of section 45(1)(f) of the  
Act?  
Standard of review  
[19] The application before the chambers judge was a section 45 application to set aside the  
award on specific grounds that go to the fundamental nature of the arbitration. The chambers judge  
was required to identify the correct test under that provision and apply that test to the award to  
determine if the process followed was “manifestly unfair” or deprived the appellants of the  
opportunity to present their case or respond to the case of TransAlta, contrary to section 45(1)(f).  
Permission to appeal to this Court was granted pursuant to section 48 of the Act, which provides  
for appeals from decisions of the Court of Queen’s Bench under sections 44, 45 or 47 of the Act.  
[20] The appellants say this Court owes no deference to the assessment and decision of the  
chambers judge, referring to Alberta (Minister of Infrastructure) v Nilsson, 2002 ABCA 283 at  
para 38. In Nilsson, the Queen’s Bench judge was acting as an appellate court on a section 44  
appeal of an arbitrator’s decision; this Court held that “a second appellate court does not owe a  
duty of deference to a first appellate court”. In this case, the chambers judge was considering an  
application to set aside the award under section 45; he was not hearing an appeal from the  
arbitration panel. Nor was he presiding over a judicial review and, accordingly, the Agraira  
standard that this Court, on appeal, will “step into the shoes” of the chambers judge and perform a  
Page: 6  
de novo review of the arbitration panel’s decision does not apply: see Agraira v Canada (Public  
Safety and Emergency Preparedness), 2013 SCC 36 at para 46.  
[21] The appeal from the chambers judge to this Court is subject to the usual appellate standards  
of review, as set out in Housen v Nikolaisen, 2002 SCC 33. The interpretation of section 45(1)(f),  
which incorporates elements of natural justice and procedural fairness, is a question of law  
reviewable for correctness. The chambers judge’s factual findings are reviewed for palpable and  
overriding error. His application of the test under section 45(1)(f) to those facts is a matter of mixed  
fact and law that, in the absence of extricable legal error, is accorded deference on appeal. His  
determination of whether the process followed by the arbitration panel, in the circumstances of the  
arbitration as a whole, rises to the level of manifest unfairness or is otherwise contrary to section  
45(1)(f) is therefore reviewed for palpable and overriding error.  
[22] If there is a flaw in the arbitral process sufficient to contravene section 45(1) of the Act, the  
decision of whether to set the arbitration award aside engages the discretion of the chambers judge  
and is entitled to deference on appeal: see Popack v Lipszyc, 2016 ONCA 135 at para 25.  
Standard of review on an application to set aside an arbitration award under section 45  
[23] The appellants submit that, given the circumscribed nature of access to judicial intervention  
and the significance of fundamental fairness to the arbitration process, the chambers judge should  
not have shown any deference to the arbitration panels procedural decisions. They say the court  
must play a supervisory role to ensure parties are afforded natural justice. A claim that an arbitrator  
has breached natural justice raises a question of law, or more specifically, a question of fairness,  
and no deference is due.  
[24] In section 45, the legislature has provided for a discretionary review by the court of certain  
aspects of arbitrations, enumerating nine grounds pursuant to which the court may set aside an  
arbitration award. The context of this review is critical to understanding the legislative intent  
behind this provision. Arbitration, as opposed to litigation in court, is intended to be more  
expeditious, private, and economical. Arbitrators can be chosen for their expertise. The procedures  
can be set by the parties and disagreements dealt with by the arbitration panel. The Act was  
designed to limit access to the courts in the absence of agreement by the parties to an appeal  
(appeals are precluded by the PPA that governs the relationship of the parties here), or some  
fundamental flaw in the establishment or conduct of the arbitration as set out in section 45. As  
noted by J. Brian Casey, Arbitration Law of Canada: Practice and Procedure, 3rd ed (New York,  
JurisNet, LLC, 2017) at p 508:  
Page: 7  
The setting aside of an award is something different from an appeal. Rather than  
attacking the tribunal’s judgment as occurs in an appeal, an application to set aside  
an award is a challenge to the validity of the arbitral process, the result of which, if  
successful, takes away the fundamental underpinning of the award.  
[25] As noted, section 45 grants a discretion to the court in the setting aside of arbitration  
awards: Kawchuk v Kovacs, 2016 ABCA 210 at para 35; Popack at para 25. That discretion must  
be exercised with due regard to the legislative scheme, including section 20(1) of the Act, which  
grants to arbitrators a wide discretion on procedural matters. Section 45(1)(f) is not intended to  
override that provision. Thus, in considering an application to set aside, it is appropriate for the  
court to give deference to the procedural choices of the arbitration panel, subject to the requirement  
in sections 19 and 45(1)(f) that those choices not result in manifest unfairness to the parties or  
deprive a party of the opportunity to present its case.  
[26] The questions before the chambers judge are: what constitutes manifestly unfair or unequal  
treatment or the deprivation of an opportunity to present a case for purposes of section 45(1)(f);  
whether the procedures adopted by the arbitration panel fail to comply with those stipulations; and,  
if so, whether the award should be set aside.  
Interpretation of section 45(1)(f)  
[27] The appellants submit that the chambers judge misconstrued section 45(1)(f) and that the  
term unfairnessin section 45(1)(f) must be given a robust interpretation because of the  
circumscribed access to the courts under the Act. As section 45(1)(f) is the only safeguard and  
opportunity for judicial scrutiny, they say, the provision should be interpreted broadly with a view  
to remedying any perceived unfairness, regardless of whether it affected the ultimate award, or  
any lack of opportunity to present a case.  
[28] Determining what constitutes manifest unfairness and unequal treatment or lack of  
opportunity to present a case under section 45(1)(f) is a matter of statutory interpretation. It  
requires reading the section in its entire context, and in its grammatical and ordinary sense,  
harmoniously with the statutory scheme and the object of the statute, and the intention of the  
legislature: Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 SCR 27, 154 DLR (4th) 193 at para 21.  
[29] The overarching purpose of arbitration legislation is to promote adherence to agreements,  
efficiency, and fairness and to lend credibility to an important dispute resolution process: EPCOR  
Power LP v Petrobank Energy and Resources Ltd, 2010 ABCA 378 at para 16. Arbitrations are  
intended to provide a faster and less expensive process to resolve disputes: Mitchell v Mitchell,  
2019 ABQB 420 at para 17.  
Page: 8  
[30] The arbitration panel is vested with discretion to determine the procedure to be followed  
and the way in which evidence is admitted. Further, the arbitration panel is not bound by the rules  
of evidence or any other law applicable to judicial proceedings and has power to determine the  
admissibility, relevance, and weight of any evidence: Act, sections 20 and 21.  
[31] Section 19 of the Act provides that the parties must be treated equally and fairly, and each  
party must be given an opportunity to present its case and respond to the other party’s case. Under  
section 6, the court may intervene in matters governed by the Act on four specified grounds only,  
one of which is to prevent manifestly unfair or unequal treatment of a party to an arbitration  
agreement. The three other grounds on which the court may intervene are to assist the arbitration  
process, to ensure that an arbitration is carried on in accordance with the arbitration agreement,  
and to enforce awards. This Court has held that with respect to section 6, “[t]he starting point is  
non-intervention, subject to a stated list of fairly narrow and discrete exemptions to be interpreted  
in accordance with the expressed legislative purpose”: EPCOR Power at para 18.  
[32] A nearly identical provision is found in Ontario’s arbitration legislation, Arbitration Act,  
1991, SO 1991, c 17. The Supreme Court in TELUS Communications Inc v Wellman, 2019 SCC  
19 at para 56 described that section as follows:  
Stated succinctly, s. 6 signals that courts are generally to take a “hands off”  
approach to matters governed by the Arbitration Act. This is “in keeping with the  
modern approach that sees arbitration as an autonomous, self-contained, self-  
sufficient process pursuant to which the parties agree to have their disputes resolved  
by an arbitrator, not by the courts” (Inforica Inc. v. CGI Information Systems and  
Management Consultants Inc., 2009 ONCA 642, 97 O.R. (3d) 161, at para. 14).  
[33] Once an arbitration award has been issued, there are also limited, circumscribed remedies  
available to the parties to challenge the award. The arbitration award binds the parties unless it is  
set aside or varied under section 44 or section 45: Act, section 37.  
[34] Section 44 is the appeal provision. It states:  
44(1) If the arbitration agreement so provides, a party may appeal an award to the  
court on a question of law, on a question of fact or on a question of mixed law and  
fact.  
(2) If the arbitration agreement does not provide that the parties may appeal an  
award to the court on a question of law, a party may, with the permission of the  
court, appeal an award to the court on a question of law.  
Page: 9  
(2.1) The court shall grant the permission referred to in subsection (2) only if it is  
satisfied that  
(a) the importance to the parties of the matters at stake in the arbitration  
justifies an appeal, and  
(b) the determination of the question of law at issue will significantly affect  
the rights of the parties.  
(3) Notwithstanding subsections (1) and (2), a party may not appeal an award to the  
court on a question of law that the parties expressly referred to the arbitral tribunal  
for decision.  
[35] The appeal provision limits judicial intervention and promotes finality by restricting the  
circumstances under which the court may review an arbitration award. The availability and scope  
of an appeal depends on what the parties agreed to under the arbitration agreement. If the parties  
did not agree that they could appeal an award, the appeal cannot proceed unless the court grants  
permission after determining that the appeal involves a question of law and is warranted in the  
circumstances pursuant to the requirements in subsection (2.1). Court intervention is further  
restricted under subsection (3), by precluding appeals involving a question of law which was  
expressly referred to the arbitration panel.  
[36] The second remedy available to a party after the issuance of an arbitration award is to apply  
to the court to set it aside under section 45. As with appeals, the Act limits when an award may be  
set aside to specific enumerated grounds:  
45(1) On a party’s application, the court may set aside an award on any of the  
following grounds:  
(a) a party entered into the arbitration agreement while under a legal  
incapacity;  
(b) the arbitration agreement is invalid or has ceased to exist;  
(c) the award deals with a matter in dispute that the arbitration agreement  
does not cover or contains a decision on a matter in dispute that is beyond  
the scope of the agreement;  
(d) the composition of the arbitral tribunal was not in accordance with the  
arbitration agreement or, if the agreement did not deal with the matter, was  
not in accordance with this Act;  
Page: 10  
(e) the subject matter of the arbitration is not capable of being the subject of  
arbitration under Alberta law;  
(f) the applicant was treated manifestly unfairly and unequally, was not  
given an opportunity to present a case or to respond to another party’s case,  
or was not given proper notice of the arbitration or of the appointment of an  
arbitrator;  
(g) the procedures followed in the arbitration did not comply with this Act  
or the arbitration agreement;  
(h) an arbitrator has committed a corrupt or fraudulent act or there is a  
reasonable apprehension of bias;  
(i) the award was obtained by fraud.  
[37] From this list, it is clear that the Act contemplates the setting aside of awards on the basis  
of fundamental flaws in the establishment or conduct of the arbitration or its process. Section 45  
is not a substitute for an appeal or a judicial review and ought not be used to circumvent the  
statutory limitations on court intervention. Additionally, the language “may set aside an award”  
(emphasis added), grants the court discretion on whether to set aside the award, even if one of the  
listed grounds is established. This interpretation is supported by subsection 45(8), which allows  
for alternative remedies: “Instead of setting aside an award, the court may remit it to the arbitral  
tribunal and give directions about the conduct of the arbitration.”  
[38] If a party wishes to appeal a decision of the Court of Queen’s Bench made under section  
44 or section 45, permission of a justice of the Court of Appeal is required: Act, section 48. This  
again reinforces the court’s non-interventionist role in arbitrations and encourages finality.  
[39] Regarding the specific phrase “treated manifestly unfairly and unequally” in section  
45(1)(f), we agree with the chambers judge that “manifestly” speaks to how apparent the unfairness  
is and whether it is obvious or clear: see Oxford English Dictionary, (Oxford University Press,  
2021) sub verbo “manifest, adj.”.  
[40] On a review of section 45(1)(f) as a whole, in the context of the entire Act and the purposes  
of the legislation, we make several observations. The Act imposes an obligation on arbitral panels  
to accord parties natural justice. While it is accepted as a foundational principle that the arbitration  
panel will treat parties fairly and give them an opportunity to present their case, it does not follow  
that the same procedural rigors present in civil litigation are required. The inclusion of the language  
“manifestly” unfair, the nature of the grounds enumerated under section 45, the statutory  
Page: 11  
limitations on judicial intervention, the primacy placed on the arbitration agreement and party  
autonomy, the legislated restrictions on appeals, and the arbitration panel’s discretion to determine  
the procedure to be followed, all suggest that procedures which are more efficacious and  
economical and perhaps less robust than those present in civil litigation are acceptable.  
[41] A review of the jurisprudence offers additional guidance in determining what amounts to  
manifestly unfair and unequal treatment or a failure to provide an opportunity to present a case  
within the meaning of section 45(1)(f) of the Act.  
Unfairness and natural justice in arbitration  
[42] The appellants object to any reliance on international arbitration cases, arguing that factors  
such as international comity and the global marketplace, which are relevant to international  
arbitrations, do not apply in the domestic context. They say the wording of section 45(1)(f) is not  
identical to, and is far more expansive than, the wording found in legislation governing  
international arbitrations with respect to when a court may set aside an award due to unfairness.  
Article 18 of the UNICTRAL Model Law on International Commercial Arbitration, which is  
adopted by Alberta’s International Commercial Arbitration Act, RSA 2000, c I-5, requires that  
parties “be treated with equality and each party shall be given a full opportunity of presenting his  
case”. Article 34(2)(a)(ii) provides for the setting aside of an arbitral award in specified  
circumstances, including where a party was “unable to present his case”.  
[43] While we acknowledge that there are points of distinction between domestic and  
international arbitrations, the overarching purposes of arbitration in both contexts are similar. As  
such, international arbitration decisions provide helpful guidance in assessing what treatment rises  
to the level of manifest unfairness to justify setting aside an award under section 45(1)(f) of the  
Act.  
[44] Beginning with Alberta decisions, Mitchell was a judicial review of a matrimonial property  
arbitration award. With respect to section 45(1)(f) of the Act, the Court of Queen’s Bench stated  
at para 18:  
The strong wording under section 45(1)(f), which allows a Court to set aside an  
award only if the party was treated manifestly unfairly and unequally, is consistent  
with the purposes of dispute resolution through arbitration rather than the courts.  
The specific inclusion of the word “manifestly” demonstrates a legislative intent  
that not every potential unfairness in an arbitration proceeding or decision will  
permit the Court to set aside an arbitration award.  
Page: 12  
[45] In Contract Policy Committee v FortisAlberta Inc, 2012 ABQB 653, the court interpreted  
the language “manifestly unfair or unequal treatment” under section 6 of the Act to mean that “the  
Legislature is willing to accept that a result may be unfair, but not so unfair as to justify  
intervention”: at para 36.  
[46] In Ary Homes Inc v Triple-A Classic Homes Ltd, 2017 ABQB 510 at para 45, the court  
noted that procedural fairness depends on the context including the subject-matter of the dispute,  
the circumstances of each case, the nature of the inquiry, and the rules under which the parties  
have agreed to arbitrate the dispute. Natural justice in arbitrations requires the arbitrator to act in  
good faith, fairly listen to both sides, and give the parties a fair opportunity to make  
representations, including to correct or contradict any statements that are prejudicial to their view  
(citing 0927613 BC Ltd v 0941187 BC Ltd, 2015 BCCA 457 at paras 59-60). In Flock v Flock,  
2007 ABQB 307 at para 49, leave to appeal ref’d 2007 ABCA 287, the court concluded that the  
protections under section 45(f) include “the right to a fair hearing, free from bias and free from  
procedures which confer relative advantages or disadvantages on one of the parties”.  
[47] The court in Ary Homes also noted that it was not unusual in arbitrations for evidence to  
be produced in a tight time frame. If a party receives evidence that it did not anticipate just before  
or during the arbitration, it may respond as best it can or ask for an adjournment, which is often a  
strategic or tactical decision (at paras 75-76), and the applicant “must live with its procedural or  
strategic choices or omissions”: at para 80.  
[48] Several decisions from other jurisdictions are also instructive.  
[49] In Rhéaume c Société d'investissements l'Excellence inc, 2010 QCCA 2269, leave to appeal  
to SCC ref’d [2011] SCCA No 57, at issue was whether an arbitration panel member had breached  
the obligation of deliberative secrecy imposed on arbitrators under Quebec’s Code of Civil  
Procedure (as it existed at the time), and if so, whether the arbitration award ought to be set aside.  
The court determined that a breach had occurred when the arbitration panel member disclosed  
publicly to the parties and third parties that the panel’s decision would be unanimous. However,  
the court refused to set aside the arbitration award as the procedural breach did “not affect the  
integrity of the process as a whole”: at para 63. In coming to this result, the court found that the  
absence of judicial surveillance except on limited grounds and the clear legislative intent favouring  
a “hands-off” approach is entirely inconsistent with the automatic annulment of arbitral awards for  
procedural defects, however minor: para 57. The court went on to state, at para 61:  
A court called upon to adjudicate such a proceeding must balance the nature of the  
breach in the context of the arbitral process that was engaged, determine whether  
Page: 13  
the breach is of such a nature to undermine the integrity of the process, and assess  
the extent to which the breach had any bearing on the award itself.  
[50] Interlink Business Management Inc v Bennett Environmental Inc, 2007 BCSC 1538 was  
decided under an earlier version of British Columbia’s domestic arbitration statute, the  
Commercial Arbitration Act, RSBC 1996 c 55, where an “arbitral error” was defined to include a  
failure to observe the rules of natural justice. The applicant argued that by denying its application  
for oral examinations for discovery the arbitrator prevented it from proving its case, since the very  
lack of evidence was the basis for the arbitrator dismissing a portion of its claim. The court  
ultimately granted leave to appeal on several questions of law, but found no denial of natural  
justice, stating “[t]he process was fair, even if it was not the most favourable”: at para 13. The  
court held that determining appropriate procedures was within the arbitrator’s jurisdiction and the  
applicant had the opportunity to obtain documents and cross-examine witnesses at the hearing.  
[51] Mungo v Saverino, [1995] OJ No 3021 (SCJ) (QL), 1995 CarswellOnt 3298 (WL) involved  
a shareholder dispute resolved by way of a domestic arbitration under an earlier version of  
Ontario’s legislation, the Arbitration Act, SO 1991, c 17. Section 46 provided that the court may  
set aside an arbitration award on several grounds, including if a party “was not treated equally and  
fairly, was not given an opportunity to present a case or to respond to another party’s case…”. The  
unsuccessful parties applied to vary or resubmit to the arbitrator certain aspects of the award on  
the basis that the arbitrator had exceeded his jurisdiction and denied the applicants natural justice  
in issuing an award without hearing direct evidence or giving the applicants an opportunity to lead  
evidence. In dismissing the applicants’ claim that they had been denied natural justice, the court  
recognized that the choice of arbitration involves a trade-off between perfection versus economy  
and finality. Thus, the court noted, at para 80:  
It is therefore important for the court to resist its natural tendency, faced with a clear  
and attractive argument on jurisdiction and natural justice, to plunge into the details  
of the arbitration and second-guess the arbitrator not only on the result but also on  
the punctilio of the process. If an arbitration is basically fair, courts should resist  
the temptation to plunge into detailed complaints about flaws in the arbitration  
process.  
[52] The principle that not every procedural breach during an arbitration will result in judicial  
intervention has been reiterated by other courts. Courts should intervene only in cases of the most  
egregious procedural breaches”: Ryan v Cacioppo, [2008] OJ No 4738 (QL), 2008 61245  
(ONSC) at para 16. In Fuego Digital Media Inc v DAC Group (Holdings) Limited, 2018 ONSC  
2897, the court put it this way: “[w]hen the allegation is one of denial of natural justice, the  
applicant must demonstrate that the arbitrator’s conduct was sufficiently egregious to offend basic  
Page: 14  
notions of morality and justice”: at para 23, citing Consolidated Contractors Group SAL (Offshore)  
v Ambatovy Minerals SA, 2017 ONCA 939 [Consolidated Contractors], leave to appeal to SCC  
ref’d, [2018] SCCA No 46.  
[53] Both Ryan and Fuego Digital Media involved arbitrations under Ontario’s domestic  
arbitration legislation, whereas Consolidated Contractors considered a challenge to an  
international commercial arbitration award. As noted earlier, while we recognize the wording in  
the domestic and international arbitration legislation is not identical, we see no principled reason  
to disregard judicial comment and insight from cases involving international arbitrations. Several  
international arbitration cases that include consideration of these issues are discussed below.  
[54] Corporacion Transnacional de Inversiones SA de CV v STET International SpA (1999), 45  
OR (3d) 183 (SC), [1999] OJ No 3573, aff’d (2000), 49 OR (3d) 414 (CA), leave to appeal to SCC  
ref’d, [2000] SCCA No 581, involved an international commercial arbitration under the  
UNCITRAL Model Law. The applicants sought to set aside the award, in part on the ground that  
they were denied fundamental procedural rights because the arbitration panel failed to order the  
disclosure of certain agreements contrary to Article 18 and Article 34(2)(a)(ii), which, as noted  
earlier, require that a party be treated with equality and be given an opportunity to present its case.  
[55] The court provided the following guidance on interpreting unfairness in the international  
arbitration context, which we find applicable to domestic arbitrations under the Act:  
a. “One commentator has proposed that conduct justifying intervention is ‘such a  
mishandling of the arbitration as is likely to amount to some substantial miscarriage of  
justice’”: at para 31, citing Mustill & Boyd, The Law and Practice of Commercial  
Arbitration in England, 2nd ed (London: Butterworths, 1989) at 550, footnote 4.  
b. “[I]n order to justify setting aside an award for a violation of Article 18, the conduct of  
the Tribunal must be sufficiently serious to offend our most basic notions of morality and  
justice”: at para 33.  
c. “[J]udicial intervention for alleged violations of the due process requirements of the  
Model Law will be warranted only when the Tribunal’s conduct is so serious that it  
cannot be condoned under the law of the enforcing state”: at para 34.  
d. “The concept of ‘fairness’ obviously entails fairness to both sides…The English Court of  
Appeal… pointed out [in reference to an arbitrator’s refusal to grant an adjournment] that  
any decision-maker has to balance the prejudice that might result from delay with the  
duty to hear all material evidence”: at para 43.  
Page: 15  
e. The purpose of Article 18 is to protect a party from egregious and injudicious conduct  
by a Tribunal. It is not intended to protect a party from its own failures or strategic  
choices. It was [the applicant] who deprived itself of the rights it now asserts were denied  
to it by the Tribunal. This cannot and does not amount to a lack of opportunity to present  
one’s case or to be treated with equality”: at para 73.  
[56] In Consolidated v Ambatov, 2016 ONSC 7171, the court held that Article 34(2)(a)(ii) of  
the Model Law must be interpreted to include procedural and substantive justice but the threshold  
for setting aside an arbitration award remains high. The tribunal’s conduct must be sufficiently  
serious to offend our basic notions of morality and justice: at para 56, citing Corporacion  
Transnacional. A party may be unable to present its case when: (a) the award is based on a theory  
of liability that either or both of the parties were not given an opportunity to address, or based on  
a theory of the case not argued for by either of the parties; (b) a party was not given an opportunity  
to respond to arguments made by an opposing party; or (c) the tribunal ignored or failed to take  
the evidence or submissions of the parties into account: at para 57. Citing the Ontario Court of  
Appeal in Popack (which had in turn cited the Court of Appeal of Quebec in Rhéaume), the court  
noted at para 154 that “[i]t is necessary to balance the nature of the breach in the context of the  
arbitral process, determine whether the breaches are of such a nature as to undermine the integrity  
of the process, and assess the extent to which the breach had any bearing on the award itself, and  
concluded “[i]n the context of this arbitration as a whole, the alleged procedural shortcomings  
were simply not that serious” and there seemed to be little likelihood that they “would have  
affected the outcome”: at para 162.  
[57] That decision was upheld by the Ontario Court of Appeal (in Consolidated Contractors),  
which endorsed the lower court’s observation that it is difficult to isolate “a single alleged  
procedural defect in the treatment of one out of many issues in a complex and lengthy arbitration”:  
at para 76.  
[58] Finally, a decision from the Singapore Court of Appeal, Soh Beng Tee & Co Pte Ltd v  
Fairmount Development Pte Ltd, [2007] SGCA 28, offers helpful commentary on when an  
arbitration award ought to be set aside due to a breach of natural justice:  
a. The delicate balance between ensuring the integrity of the arbitral process and ensuring  
that the rules of natural justice are complied with in the arbitral process is preserved by  
strictly adhering to only the narrow scope and basis for challenging an arbitral award that  
has been expressly acknowledged under the Act and the [International Arbitration Act  
(Cap 143A, 2002 Rev Ed)]”: at para 65.  
Page: 16  
b. In short, there must be a real basis for alleging that the arbitrator has conducted the  
arbitral process either irrationally or capriciously”: at para 65.  
c. “It must always be borne in mind that it is not the function of the court to assiduously  
comb an arbitral award microscopically in attempting to determine if there was any  
blame or fault in the arbitral process; rather, an award should be read generously such  
that only meaningful breaches of the rules of natural justice that have actually caused  
prejudice are ultimately remedied”: at para 65.  
d. “Fairness includes the right to be heard and mandates equality of treatment. Arid,  
hollow, technical or procedural objections that do not prejudice any party should never  
be countenanced. It is only where the alleged breach of natural justice has surpassed the  
boundaries of legitimate expectation and propriety, culminating in actual prejudice to a  
party, that a remedy can or should be made available”: at para 98.  
Breaches said to arise from document disclosure  
[59] In this appeal, the appellants say insufficient document disclosure denied them an  
opportunity to present their case or respond to that of TransAlta, and that reliance by the arbitration  
panel on the absence of the undisclosed records either supports that conclusion or is another basis  
for finding manifest unfairness that warrants judicial intervention in the award.  
[60] It has been noted that the need for relevant evidence is the same, regardless of whether the  
parties are participating in an arbitration or court process: Jardine Lloyd Thompson Canada Inc v  
SJO Catlin, 2006 ABCA 18 at para 42, leave to appeal to SCC ref’d, [2006] SCCA No 87.  
Document disclosure can be critical to ensuring meaningful participation and a fair hearing: see  
Nortel Networks Inc v Calgary (City), 2008 ABCA 370 at paras 19-20, leave to appeal to SCC  
ref’d, [2008] SCCA No 533, where a lack of disclosure was found to have “effectively precluded  
Nortel … from tendering evidence through its own expert witness … or demonstrating the same  
through cross-examination”.  
[61] However, not every evidentiary ruling about the admission of evidence “rises to the level  
of procedural fairness”: Ary Homes at paras 46-47. In Corporacion Transnacional, the court noted  
the applicants could have pursued several procedural avenues, including seeking production of the  
redacted portions of the documents from the panel or cross-examining the respondents’ witnesses  
and attempting to establish a basis for seeking an order from the panel directing production of the  
redacted portions.  
Page: 17  
[62] In Syndicat des employés professionnels de l'Université du Québec à Trois-Rivières c  
Université du Québec à Trois-Rivières, [1993] 1 SCR 471, 101 DLR (4th) 494, at issue was a  
labour arbitrator’s refusal to admit certain evidence. The Supreme Court concluded that the  
rejection of relevant evidence does not automatically give rise to a breach of natural justice: at 491.  
The court ultimately found there was a breach of natural justice because the evidence the arbitrator  
refused to admit was “prima facie crucial” to the case the respondent sought to make. Moreover,  
the arbitrator had disposed of “an extremely important point in the case before him…without  
having heard any evidence whatever from the respondent on the point, and even having expressly  
refused to hear the evidence which the respondent sought to present on the point”: at 492 (emphasis  
in original).  
[63] The appellants rely on Syndicat to argue that, in determining whether the parties were  
treated unfairly, the reviewing court cannot consider the result of the arbitration. In support of this  
proposition, they rely on the following excerpt from Syndicat at 493:  
Secondly, and more fundamentally, the rules of natural justice have enshrined  
certain guarantees regarding procedure, and it is the denial of those procedural  
guarantees which justifies the courts in intervening. The application of these rules  
should thus not depend on speculation as to what the decision on the merits would  
have been had the rights of the parties not been denied. I concur in this regard with  
the view of Le Dain J., who stated in Cardinal v. Director of Kent Institution, 1985  
23 (SCC), [1985] 2 S.C.R. 643, at p. 661:  
. . . the denial of a right to a fair hearing must always render a  
decision invalid, whether or not it may appear to a reviewing court  
that the hearing would likely have resulted in a different decision.  
The right to a fair hearing must be regarded as an independent,  
unqualified right which finds its essential justification in the sense  
of procedural justice which any person affected by an administrative  
decision is entitled to have.  
[64] This statement must be considered in context. The Supreme Court found a breach of natural  
justice because the rejected evidence was crucial to the respondent’s case, and then held it was  
inconsequential whether the evidence would have affected the result. We read Syndicat to say that  
a reviewing court should not speculate on what the arbitration award would have been if rejected  
evidence had been admitted; it does not follow that a court cannot look to the award and the  
arbitration panel’s reasons in determining the materiality of the evidence to a party’s case and the  
ultimate question of whether unfairness resulted from its absence. This is particularly so when,  
like this appeal, the allegation is that the arbitration panel relied on the absence of undisclosed  
Page: 18  
records to support its finding in favour of the claimants. A review of the reasons and whether the  
lack of evidence played a part in the conclusions reached by the arbitration panel is necessary to  
answer the issues put forward by the parties on appeal.  
[65] We also take note of Rhéaume, a more recent appellate decision which considered the  
extent to which a breach undermined the fairness of the arbitration and the effect it had on the  
award, an approach that was cited with approval by the Ontario Court of Appeal in Popack and  
with which we agree.  
[66] Several principles may be extracted from this review of the jurisprudence. First, parties to  
an arbitration are entitled to a fair hearing, not a perfect hearing. Second, the overall fairness of  
the proceedings must be considered, not individual rulings. Third, parties must take advantage of  
and exercise diligence in pursuing issues and cannot later complain of some perceived unfairness  
resulting from their failure to do so. Fourth, not every refusal to admit relevant evidence is a breach  
of natural justice. Fifth, the threshold for setting aside an arbitration award on grounds of  
unfairness has been described in various ways, but the cases make it clear that something of a  
significant nature is required, or that the excluded evidence was crucial to the case being presented.  
Conclusion on the interpretation of section 45(1)(f)  
[67] In summary, the grounds to set aside an arbitration award should be construed in  
accordance with the purposes of the Act; that is, narrowly and only to ensure the proceedings are  
not fundamentally or fatally flawed. The Act was intended to circumscribe appellate review and  
there is no exception for procedural rulings that do not lead to a fundamentally flawed process.  
Setting aside an arbitration award because a party was “treated manifestly unfairly and unequally”  
or not given an opportunity to present its case or respond to the other party’s case requires a  
determination as to whether the errors alleged challenge the fundamental validity of the process.  
It must go to the heart of the process and effectively undermine its fairness or have the effect of  
preventing the party from putting forward its case. Where the exclusion of evidence is said to be  
at the root of an unfairness, that evidence must be crucial to the party’s case. If the alleged  
unfairness does not impact the proceedings in a meaningful way, it cannot rise to the level  
necessary to set aside the arbitration award under section 45(1)(f).  
[68] The appellants have not demonstrated that the chambers judge erred in his interpretation  
of the provision.  
Did the chambers judge err in finding that the criteria to set aside an arbitration award  
pursuant to section 45(1)(f) were not met?  
Page: 19  
[69] To assess whether the procedural issues alleged by the appellants resulted in manifest  
unfairness or denied the appellants an opportunity to make their case, a detailed understanding of  
this arbitration is necessary. It is important to appreciate the plethora of issues before the arbitration  
panel, the nature of the undisclosed records and their relevance and significance to those issues,  
and the findings and determinations made by the arbitration panel. Accordingly, the background  
of the dispute and the arbitration award will be discussed in some detail below.  
The Power Purchase Arrangement  
[70] TransAlta owned and operated a coal fired thermal electrical generating facility known as  
the Keephills power plant. ENMAX is the buyer of that power.  
[71] The Unit is subject to the Keephills Power Purchase Arrangement, or PPA, between  
TransAlta (as owner) and ENMAX (as buyer). The PPA is made under the Power Purchase  
Arrangements Determination Regulation and its terms are mandated by Regulation. The  
arbitration panel noted, and the parties agreed, that the rules of statutory interpretation apply in  
interpreting the language of the PPA. Under the terms of the PPA, TransAlta is to provide an  
agreed upon level of electricity to ENMAX. If actual availability falls below that target, TransAlta  
must pay ENMAX an “Availability Incentive Payment”. ENMAX receives the generation capacity  
and pays TransAlta a regulated wholesale price for the electricity, set by the terms of the PPA, and  
sells the electricity.  
[72] Both parties are relieved of their obligations under the Power Purchase Arrangement in  
case of force majeure, which is defined as any event or cause which is beyond the reasonable  
control of the affected party including a HILP Event, a mechanical breakdown but only insofar  
as such breakdown results from a HILP Event…”  
[73] A HILP Event, or “High Impact, Low Probability Event”, is defined as:  
a major failure of some or all of the components of the Plant (or a reasonable  
prediction by the Owner that a major failure of some or all of the components of  
the Plant will occur before the next scheduled Planned Outage) and which results  
(or could be reasonably expected to result) in the Plant being unable to operate or  
being forced to operate at a lower level (or is reasonably predicted by the Owner to  
be unable to operate or forced to operate at a lower level) and (a) it is reasonably  
predicted by the Owner that the Plant will be unable to operate or forced to operate  
at a lower level for a period in excess of six (6) weeks; and (b) the Balancing Pool  
has confirmed that the above conditions have been met …  
Page: 20  
[74] In the case of a force majeure event, TransAlta is relieved of its obligation to make penalty  
payments to ENMAX under the Availability Incentive Payment mechanism. Also, during periods  
of force majeure, the obligation to make Capacity Payments to TransAlta shifts from ENMAX to  
the Balancing Pool: PPA, Article 14.4.  
[75] The key issues before the arbitration panel were whether the failure was an event of force  
majeure and a HILP event, both as defined in the PPA. The arbitration panel noted that “any event  
beyond the reasonable control of an affected party can be a matter of Force Majeure, including a  
HILP, but if the Force Majeure is from a mechanical breakdown, it must be a HILP.”: award at  
para 41. Accordingly, the questions to be determined included whether there was a mechanical  
breakdown, whether it was a HILP event, and whether it was beyond the reasonable control of  
TransAlta.  
[76] TransAlta had an obligation to operate the Unit in accordance with “Good Operating  
Practice”, or GOP, defined as follows:  
Any of the range of practices, methods and acts engaged in or approved by a  
significant proportion of the industry in North America involved in the supply of  
electricity from and the operation of generating units similar to the Units, from time  
to time, or any other practices, methods and acts which, in the exercise of  
reasonable judgment in light of the facts known or reasonably ascertainable, could  
have been expected to accomplish the desired result at a reasonable cost consistent  
with applicable Laws, reliability, safety and expedition.  
[77] The arbitration panel noted there are two parts to this definition: i) practices in common  
use in the industry, and ii) other practices reflecting “reasonable judgment in light of the facts  
known or reasonably ascertainable”. If the failure resulted from poor practice, then TransAlta  
could not rely on the force majeure exception: award at para 11. Such failures would not be  
“beyond the reasonable control” of TransAlta.  
The “tripping” event and the positions of the parties  
[78] On March 5, 2013, the Unit stator ground fault protection system tripped the Unit off-line.  
It remained off-line until October 6, 2013.  
[79] TransAlta retained various consultants to diagnose the problem. Some of the testing  
suggested the Unit could be brought back online, but as the chambers judge summarized at para  
15 of his reasons:  
Page: 21  
A Tennessee Valley Authority (“TVA”) probe test registered elevated localized  
partial discharge activity on the generator’s top stator bar (“Bar T5”). Kinectrics  
performed the TVA test with an Iris PPM97 corona probe (the “PPM97 Meter”).  
On March 20, 2013, TransAlta was advised of the TVA test readings. Hitachi, the  
generator’s manufacturer, was also advised and recommended that Bar T5 be  
replaced.  
[80] TransAlta decided to replace Bar T5 and issued a notice of force majeure on March 25,  
2013. On March 27, 2013, TransAlta requested that the Balancing Pool confirm a HILP event had  
occurred, as required by the PPA to establish a force majeure. The Balancing Pool did not issue  
the requested confirmation.  
[81] When the relay tripped, TransAlta was presented with two possible courses of conduct:  
(a)  
It could reset the relay and restart the generator. Any needed repairs could be done  
about 14 months later at the next scheduled maintenance shutdown in May 2014.  
(b)  
It could take the generator off-line and replace or repair the component that had  
caused the trip.  
Before deciding which course to take, TransAlta needed to diagnose the problem and identify what  
caused the trip. Depending on the cause, simply resetting the relay and restarting the generator  
might cause further damage. On the other hand, taking the generator off-line would incur  
significant financial costs.  
[82] If the Unit had been restarted and returned to service at the time of the initial testing, the  
outage would not have qualified as a HILP event. However, TransAlta’s decision to replace Bar  
T5 was originally estimated to take six weeks and five days, which would potentially qualify it as  
a HILP event. In the end, the replacement of Bar T5 disclosed other problems, leading to the  
decision to conduct a full rewind of the stator. That actually took seven months, largely due to the  
time required to obtain a stator rewind kit from Japan.  
[83] To diagnose the problem, TransAlta conducted a number of tests and consulted with  
various persons, including Hitachi, the manufacturer of the generator, and Kinectrics, a third party  
expert. In its statement of position, TransAlta stated that one of the tests used was the Tennessee  
Valley Authority, or TVA, test:  
89 The TVA probe test is a recognized test within the North American utility  
industry and TransAlta has used the test as part of its standard generator diagnostics  
testing program across its fleet for many years. If there is a problem with the stator  
Page: 22  
bar insulation, conducting a TVA probe test is the best way to pinpoint its exact  
location.  
[84] The relay had not tripped previously in 30 years of operation, and diagnostic testing and  
routine maintenance prior to the tripping event had not disclosed any problems, so TransAlta took  
the position that the tripping of the relay in 2013 was unpredictable and unexpected. TransAlta  
had “uprated” the generator’s capacity during the planned maintenance outage in 2012 but had not  
rewound the stators at that time, because it was not recommended or indicated.  
[85] Possible external causes of the trip or a failure of the relay itself were eliminated, indicating  
that the problem was inside the generator. A number of the tests conducted did not identify any  
abnormality, and the generator was dismantled for further testing. A TVA test, performed by  
Kinectrics using an Iris PPM97 corona probe, suggested that the problem originated in the top T5  
stator bar located inside the generator: reasons at para 15. This test showed that the T5 stator bar  
was an “outlier” and was generating a “spiked” reading far in excess of the readings coming from  
the other stator bars, and higher than the readings taken during the 2012 routine maintenance  
outage.  
[86] The Iris PPM97 corona probe was owned by Kinectrics. It subsequently became apparent  
that this probe had a faulty diode, causing it to show results two or three times the actual reading.  
However, this problem was not the sole explanation for the high readings. Even adjusted for that  
magnification of the readings, the “spiked” readings it was reporting from the T5 stator bar were  
still anomalous and significantly in excess of the readings coming from the other stator bars: award  
at para 173.  
[87] As noted, Hitachi and Kinectrics initially recommended replacement of the T5 stator bar.  
However, when that replacement was attempted, problems were detected in the T31 stator bar and  
elsewhere in the generator. TransAlta decided to take the generator off-line and do a complete  
rewind of the stator. This decision was supported by Hitachi and the consultants. Hitachi warned  
that there was a significant risk of a double-line-to-ground failure if the generator was returned to  
service without a full stator rewind: award at para 189. This could lead to significant damage to  
the generator, including damage to the stator core. TransAlta concluded that rewinding the stator  
was a HILP event that would take more than six weeks to accomplish, and therefore was a force  
majeure.  
[88] In this situation, the HILP event was not simply the tripping of the relay, but the underlying  
problem in the generator that caused the tripping. Since the generator had not actually failed,  
ENMAX took the position that to qualify as a HILP event TransAlta had to demonstrate that it  
Page: 23  
was “a reasonable prediction by the Owner” that a major failure of some or all of the components  
of the generator would occur before the next scheduled outage.  
[89] In its Statement of Position, ENMAX argued that TransAlta was not entitled to declare  
force majeure because its investigation of the relay trip was flawed and inadequate and failed to  
meet Good Operating Practice. It alleged that TransAlta did not do sufficient testing to eliminate  
the prospect of simply restarting the generator. Hitachi’s recommendation to rewind the stators  
was unreasonable. There was accordingly no “reasonable prediction by the Owner” of a major  
failure before the next scheduled outage in May 2014.  
[90] ENMAX took the position that the TVA test was not widely recognized within the North  
American utility industry as a reliable primary diagnostic test, but only as a secondary diagnostic  
test to pinpoint the location of potential problems. Hitachi was not familiar with the TVA test and  
had recommended other testing be done before the generator was dismantled. Given that other  
tests were normal, ENMAX argued it was unreasonable for TransAlta to rely on the TVA test in  
deciding to rewind the stator. If TransAlta’s prediction of imminent failure was not reasonable,  
there was no HILP event, and therefore no event of force majeure.  
[91] In its Statement of Position, the Balancing Pool argued that whatever the cause of the  
shutdown of the generator, it was the result of poor operational decisions by TransAlta and was  
entirely under TransAlta’s control. The aging of equipment is not unpredictable. As a result, the  
shutdown could not qualify as a HILP event. TransAlta should have rewound the stator in 2012  
when it uprated the generator’s capacity. At the least, it should have had a spare stator or rewind  
kit on hand, which would have significantly reduced the length of the shutdown.  
[92] The Balancing Pool stated that, instead of following the advice to return the generator to  
service, TransAlta unreasonably relied on the “erratic and inconsistent” and uncorroborated TVA  
test. After-the-fact testing failed to show any defect that required a complete shutdown. There was  
nothing to show that the generator could not be restarted after the trip or that a full or partial rewind  
of the stator was required. The Balancing Pool argued that, at best, TransAlta should have only  
replaced bars T5 and T31, and then returned the generator to service until the next planned service  
outage, or until the rewind kit arrived from Hitachi.  
[93] In its Reply, TransAlta responded that the tripping event was unexpected. Testing done  
during the scheduled 2012 outage had indicated that the insulation was in good condition. Hitachi  
had never recommended a stator rewind. TransAlta kept spare stator bars, but it was not standard  
industry practice to maintain a full spare stator rewind kit. TransAlta did not rely just on the TVA  
test, but concluded that there was a predictable failure before the next scheduled maintenance  
outage based on (i) the trip itself, (ii) anomalies in the data, (iii) “worrisome physical observations”  
Page: 24  
(a burning smell and high carbon monoxide reading), (iv) other concerning partial discharge test  
results, (v) the recommendation of Hitachi and Kinectrics, (vi) elimination of external causes for  
the trip, together with (vii) the TVA test. The TVA test is widely recognized and reliable.  
Subsequent testing showed that the T5 bar was unfit for further service. The Balancing Pool and  
ENMAX were taking inconsistent positions by arguing that a stator rewind was required in 2012  
but not in 2013 after the tripping event.  
[94] In addition to their argument that the TVA test was not used in the industry to diagnose  
problems of this type, the appellants wanted to establish that TransAlta knew or ought to have  
known that the Iris PPM97 corona probe was unreliable and could give “false positives”.  
TransAlta’s reliance on the TVA test as a justification for replacing the Bar T5 was itself  
unreasonable, but TransAlta should also have known that this particular probe was unreliable.  
Instead of taking the Unit off-line, TransAlta should have searched for and eliminated the  
possibility of a different diagnosis or solution.  
[95] The arbitration panel noted that there was “a series of occurrences or events that  
collectively form the Event as defined by the parties”, with the key issue being “whether at each  
or any decision point during the outage” it was reasonable for TransAlta to predict that a major  
failure would occur prior to the next scheduled planned outage: award at para 38. An underlying  
issue was whether TransAlta’s decision to rewind the stator was reasonable or whether the relay  
should have been reset and the generator restarted.  
The arbitration process and procedural orders  
[96] Both appellants disputed the claim of force majeure and a demand for arbitration was  
issued under the PPA. The arbitration panel made four procedural orders dealing with scheduling,  
document disclosure, production of additional records, requests of further production and removal  
of redactions. There were also email directions respecting the conduct of the proceedings. The  
procedural orders were made between May 1, 2015 and March 3, 2016, and the hearing took place  
in May 2016. Witness statements and expert reports were filed by the parties and tendered as their  
evidence. The witnesses were also examined and cross-examined at the hearing. Closing written  
submissions were received in June 2016 and the follow up written questions from the arbitration  
panel were received and responded to by the parties by way of written reply dated Friday, July 22,  
2016.  
[97] Issues related to record production came before the arbitration panel in a series of  
procedural applications.  
Procedural Order No. 1  
Page: 25  
[98] Procedural Order No. 1 set out the general procedures to be followed in the arbitration,  
including record production. Initially, all the parties supported a type of record production similar  
to the one used in civil litigation: all records that were relevant and material to the outcome would  
be disclosed: reasons at para 21.  
[99] The arbitration panel directed a method of “reliance and request” disclosure. Initially, a  
party would only disclose those records on which it intended to rely, but the other party could  
request production of “additional documents that are relevant to an issue and material to its  
outcome believed to be in the possession of or under the control of an adverse party”: reasons at  
paras 22-23. Record production was essentially to be done in two stages, with the ultimate  
obligation being to disclose all relevant and material records: reasons at para 28. Procedural Order  
No. 1 confirmed that it was not comprehensive or final, and that the parties could apply for further  
directions or changes: reasons at para 27. The appellants subsequently made a number of  
applications for production.  
Procedural Order No. 2  
[100] Requests for further disclosure resulted in Procedural Order No. 2. The arbitration panel  
outlined its general approach to production (Procedural Order No. 2 at para 5):  
Without the benefit of engineering evidence, it is difficult for the tribunal to easily  
determine proportionality and the scope of the discovery process on this issue. As  
a general principle, however, the tribunal approaches production on the basis that  
the closer the request is to the stator or the generator protection systems, the more  
it is clear that the documents should be produced on the basis that they are relevant  
to an issue and material to its outcome. While recognizing that the pleadings  
disclose a number of other potential causes for the Trip, the further away one gets  
from what was identified at the time as the problem with the generator, the more  
we would need to see some evidence of relevance before those documents are  
ordered produced. This may well mean that our decision in this Order may be  
revisited as further evidence is disclosed in the production process. It will also be  
noted that in a number of the items we believe it appropriate that experts from the  
parties meet and confer with a view to establishing the reasonable limits of some  
of the productions. If no agreement is reached a further motion may be brought to  
the tribunal supported with appropriate evidence. [emphasis added]  
[101] The arbitration panel made it clear that it was prepared to revisit the issue if further  
evidence was received and acknowledged that the issue was still outstanding: reasons at para 38.  
Page: 26  
Dealing specifically with claims of privilege, and redactions of produced records based on  
irrelevance, the arbitration panel directed (Procedural Order No. 2, para 17):  
Having considered this Order, if a claim for privilege is still maintained, or there  
continues to be a redaction based on irrelevance, the requesting party has three  
options: It may 1) accept the characterization by counsel, 2) ask the tribunal to  
review the challenged document and decide the issue, or 3) the parties can agree to  
an independent lawyer being appointed, either the parties or the tribunal, who will  
review and decide the issue. It should be mentioned that the tribunal is not in favour  
of option 2.  
[102] Of importance to these appeals was ENMAX’s Request #71:  
Copies of all records related to or regarding the use of TVA probe testing for  
diagnostic purposes across TAGP’s fleet, including: (a) any formal or documented  
protocols or procedures; (b) any test reports or results of testing; (c) any reports,  
memorandums, recommendations or decisions that contemplate or consider the  
outcomes of TVA testing results; and (d) any reports, memorandums,  
recommendations or decisions that consider or contemplate the merit or efficacy of  
TVA probe testing, whether produced or prepared by TAGP, Kinectrics or any  
other 3rd party. [emphasis added]  
[103] ENMAX argued that this information was relevant to whether the procedure used when  
testing the stator accorded with Good Operating Practice and whether, given TransAlta’s  
experience with the TVA test, reliance on that test was reasonable given contra-indications  
provided by other diagnostic tests. TransAlta replied that it had provided all these records with  
respect to the Keephills generator and that records relating to other facilities were not relevant and  
material.  
[104] In addition, ENMAX wanted production of records held by Kinectrics and other  
contractors under TransAlta’s control.  
[105] Counsel for ENMAX advised the arbitration panel that the parties were attempting to  
resolve outstanding items, including ENMAX’s Request #71, and “if we can’t, we will bring them  
back to you for resolution”. The arbitration panel never specifically dealt with ENMAX’s  
Request #71. The arbitration panel noted that ENMAX and TransAlta were still attempting to  
resolve” it and other requests, and therefore “No Order necessary”: reasons at para 38.  
Page: 27  
Procedural Order No. 3  
[106] Another request for production was made a few months later, resulting in Procedural Order  
No. 3. Still said to be outstanding were records related to “whether TransAlta’s extensive reliance  
on TVA testing during the Event accords with good operating practice”. ENMAX’s position was  
that TransAlta’s disclosure revealed “the Corona testing instrument PPM 97 contained  
manufacturing defects that resulted in it returning inconsistent and unreliable readings”, and it  
sought information respecting the calibration of the probe. No specific reference was made to  
ENMAX’s outstanding Request #71.  
[107] The Balancing Pool requested further record production, based on issues that had been  
revealed by what TransAlta had produced to date. It stated that the reliability of the TVA test was  
a key issue, and it also requested records regarding the inaccurate readings given by the probe,  
together with detailed records about the testing methodology used.  
[108] TransAlta repeated its position that record production should be limited to what happened  
with the Unit and that “fleet wide” records were not relevant. TransAlta relied on the test of “the  
closer the request is to the stator or the generator protection systems” set in Procedural Order No.  
2 and argued that the appellants were on a “fishing expedition”.  
[109] Procedural Order No. 3 reiterated the obligations of each party to disclose records and  
confirmed that the Reliance and Request method of disclosure was not intended to limit the  
ultimate scope of disclosure: all relevant and material records under the control of each party were  
to be disclosed.  
[110] The arbitration panel directed TransAlta’s counsel to expressly confirm they had made  
TransAlta aware of its disclosure obligations, that diligent searches had been conducted, and that:  
“. . . all documents or categories of documents relied on, agreed to be produced, or ordered  
produced have been produced”: reasons at para 52.  
Procedural Order No. 4  
[111] The Balancing Pool made a further application for the production of records before the  
commencement of the hearing, including “relevant and material records in the possession of  
TransAlta and Kinectrics” relating to the TVA probe and its use at Keephills. A particular focus  
was on a redacted October 1, 2013, email from Andrew Brown, an employee of Kinectrics, that  
disclosed Brown had discovered the Iris PPM97 corona probe was not properly calibrated and  
gave inaccurate readings.  
Page: 28  
[112] Following Procedural Order No. 3, TransAlta asked Brown if he had any further records,  
but he replied that he was no longer employed by Kinectrics. TransAlta then asked Kinectrics if it  
had any records about the use of the probe. Kinectrics found three documents, but they had already  
been produced. The Balancing Pool asked for information about the scope of the request made to  
Kinectrics and why no other documents could be located. TransAlta replied that Kinectrics was  
consulting its counsel, prompting the Balancing Pool to ask the arbitration panel to issue directions  
(i) that TransAlta produce an unredacted copy of the Brown email, and (ii) that Kinectrics itself  
produce relevant and material records in specific categories.  
[113] The records or categories of records being sought related to TVA test records at the time  
of the 2013 trip and records about the Iris PPM97 corona probe. The Balancing Pool argued that  
while the arbitration panel may not have jurisdiction over third parties like Kinectrics it could seek  
the assistance of the court and requested a declaration that the Kinectrics records were relevant  
and material. If Kinectrics refused to voluntarily produce them, then the Balancing Pool would “be  
at liberty to apply to the Court of Queen's Bench of Alberta seeking that court's assistance to  
enforce the Tribunal’s direction”.  
[114] The Brown email redacted information about other TransAlta units where the Iris PPM97  
corona probe had been used. The appellants had had a copy of this redacted email for some time  
but did not immediately ask for an unredacted copy.  
[115] This application resulted in Procedural Order No. 4, which confirmed the arbitration  
panel’s premise that each party had an obligation to produce records that were relevant to an issue  
and material to its outcome believed to be in the possession of or under the control of an adverse  
party. The arbitration panel directed that TransAlta provide an unredacted copy of the Brown  
email, as it met this test.  
[116] The arbitration panel noted that the appellants had made repeated requests for production  
of all records relating to the TVA test and the calibration of the Iris PPM97 corona probe.  
TransAlta had agreed to produce all of this category of records in its possession, so the arbitration  
panel did not find it necessary to make any further order. The arbitration panel rejected the request  
for a declaration that records held by Kinectrics were relevant and material:  
11 As TransAlta has apparently agreed that these records should be produced, the  
tribunal does not consider it necessary or appropriate to make any further order  
respecting the necessity for production from a third party, or to consider the extent  
to which records in the possession of Kinectrics are relevant and material to the  
issues beyond that which has already been produced. We are also not prepared to  
make any order with respect to scope or relevancy that might directly or indirectly  
Page: 29  
affect the rights of a third party, not resident in Alberta, who presumably was not  
given notice of this motion and who has not made any submissions to us.  
12 This decision is without prejudice to the Balancing Pool to pursue this issue  
elsewhere as it may see fit, keeping in mind the schedule in place for the hearing of  
this case.  
As a result of Procedural Order No. 4, TransAlta produced an unredacted copy of the Brown email,  
which reported that the “Iris PPM97 meter reads high, dependent upon the range selected…”.  
[117] TransAlta subsequently provided surreply evidence from Brown on its use of the Iris  
PPM97 corona probe: reasons at para 65. In its written argument following the hearing, the  
Balancing Pool observed:  
208 Having vigorously resisted production of Kinectrics records on the grounds  
that it cannot give what it does not have, TransAlta then produced a surreply  
statement from a witness whose evidence is based on alleged test results and other  
facts that he cannot have had access to since he left Kinectrics in January, 2014.  
Paragraph 6 of Mr. Brown's Surreply asks the Tribunal to accept as fact four  
detailed characteristics of the TVA tests without producing the underlying test  
results, or indeed any records in support. Paragraph 7 purports to list facts that  
differentiate Keephills Unit 1 from the other three Units based on information in  
TransAlta’s possession. If the statements made in TransAlta’s February 22 Brief  
[respecting Procedural Order No. 4] are accurate, Mr. Brown’s surreply is either  
made entirely from memory, or it is improperly based on his review of TransAlta  
records that have not been produced in this dispute. If it is the former, it is entitled  
to no weight. If it is the latter, it is improper and the test results and documentation  
that Mr. Brown relied upon should have been produced.  
[118] The appellants made no application for further production between the receipt of the  
surreply evidence on April 18, 2016 and the commencement of the hearing on May 9, 2016 or  
during the hearing itself. In the end, the arbitration panel accepted the Balancing Pool’s argument  
and gave little weight to Brown’s evidence: award at para 162.  
The arbitration award  
[119] The arbitration panel issued its award on November 14, 2016. It found that TransAlta had  
acted in accordance with Good Operating Practice, that there was a HILP event and that it was  
beyond the reasonable control of TransAlta and constituted a force majeure.  
Page: 30  
[120] As noted earlier, any event beyond the reasonable control of an affected party can be a  
matter of force majeure, including a HILP event, but if the event is from a mechanical breakdown,  
it must be a HILP event to constitute a force majeure. The key issues to be resolved by the  
arbitration panel were, therefore, whether the shutdown of the Unit was a HILP event and  
constituted force majeure. The panel described those issues as follows:  
38 In this case, there is a series of occurrences or events that collectively form the  
Event as defined by the parties. The key issue in the definition of a HILP is whether  
at each or any decision point during the outage, there was “a major failure of some  
or all of the components of the Plant”, or “… a reasonable prediction by the Owner  
that a major failure of some … of the components of the Plant will occur before the  
next scheduled Planned Outage and which … could be reasonably expected to  
result in the Plant being unable to operate or be forced to operate at a lower level  
… and it is reasonably predicted by the Owner that the Plant will be unable to  
operate or be forced to operate at a lower level for a period in excess of six (6)  
weeks.”  
39 ENMAX puts the second part of the definition this way in its post-hearing Reply  
submission: “based on the information that TransAlta knew, or reasonably ought to  
have known, at the time, was it reasonable for TransAlta to predict that a major  
failure would occur prior to the next Planned Outage (May 2014).”  
[emphasis added]  
[121] In approaching these issues, the arbitration panel considered whether there was a  
mechanical breakdown, whether the event was beyond the reasonable control of TransAlta, and  
whether the activities carried out by TransAlta, including testing, constituted Good Operating  
Practice. These issues were considered at each decision point, and the award was structured  
accordingly.  
[122] The focus of the arbitration was, therefore, on what happened, why it happened, could it  
have been prevented, what did TransAlta know, what choices did TransAlta have and what choices  
did it make, and what information did TransAlta choose to rely on or fail to rely on, all considered  
at each decision stage. The structure of the award highlights, in chronological order, each of the  
sub-issues and related facts that went in to determining whether the outage was a matter of force  
majeure. When required, the arbitration panel found facts and made determinations regarding  
whether each step was reasonable and within Good Operating Practice. Finally, the arbitration  
panel summarized its findings and discussed them in relation to the PPA definitions of force  
majeure and HILP event.  
Page: 31  
[123] The arbitration panel explored the trip and its initial investigation. It found that the DGSH  
relay and related wiring was functioning properly at the time of the trip, and the testing done to  
confirm that was reasonable: award at paras 66-67. It then considered the theory posited for the  
trip and found that it was triggered by a change in the third harmonic voltage ratio caused by an  
issue with the generator stator winding: award at para 77.  
[124] The arbitration panel described its key findings and determinations on each issue as  
follows, at award para 254:  
a. Operating the Unit without dehumidifiers prior to the 2012 uprate did not cause any  
detectible problem with the stator insulation in 2013, or cause or contribute to the Trip.  
b. The investigation of the DGSH relay was appropriate and confirmed it was working  
properly.  
c. The decision to dry out the stator fell within GOP and was reasonable.  
d. The decision to pull the rotor fell within GOP and was reasonable.  
e. There was no good reason to exclude the TVA testing.  
f. At the end of the investigation stage all of the evidence pointed to an aged insulation  
system with Bar T5 being the suspected cause of the Trip.  
g. At the time the decision was made to replace Bar T5, TransAlta knew:  
i. A Trip had occurred that was in all likelihood caused by an issue in the generator;  
ii. Very high TVA readings were found on one bar that increased when the wedges  
were removed evidencing delamination or a breakdown in the insulation, caused by  
heat and mechanical forces on the bar when the generator was operating;  
iii. Confirmation of the TVA test was obtained from a partial discharge test done at  
the neutral end, phase A, showing two times the reading at the line end, and on the  
neutral of the other two phases on the Unit. This indicated there was an issue at the  
neutral end, phase A;  
iv. It had the opinions from both Hitachi and Kinectrics that Bar T5 needed to be  
replaced, or it was likely the relay would trip again.  
Page: 32  
h. TransAlta reviewed and considered the recommendations before coming to a conclusion  
to replace Bar T5.  
i. Based on the facts available in March, TransAlta did not have sufficient information to  
question the reliability of the test results or the opinions of Hitachi and Kinectrics.  
j. In the circumstances it was reasonable for TransAlta to accept the results and the  
recommendations of Hitachi and Kinetrics and replace Bar T5.  
k. The replacement of Bar T5 was expected to return the Unit to operation by April 21,  
2013.  
l. Based on the information available at the time, the decision to replace Bar T5 was  
reasonable and fell within the definition of GOP.  
m. The decision to replace T31 was reasonable.  
n. The decision not to order a full rewind kit until after it was determined that the  
replacement of Bar T5 had not solved the problem, but had made matters worse, but was  
still reasonable.  
o. Given the test data and the opinions of Hitachi, Kinectrics and Mr. Klempner, it was  
reasonable for TransAlta to have decided to wait for the full stator rewind before returning  
the Unit to service.  
p. The Panel has no evidence that the 15 weeks it took for delivery of the full rewind kit  
was unreasonable.  
q. The failure to have a full rewind kit on hand was not unreasonable or contrary to GOP.  
r. There is no evidence of any significant delay in returning the Unit to service.  
[125] The award painstakingly went through all the challenges to the decision-making process  
involved in the failure. Every decision at every stage was challenged by the appellants. One of  
those decisions was TransAlta’s reliance on TVA testing, a sub-issue to the reasonableness of the  
decision to replace Bar T5. It is this sub-issue that underlies the appellants’ argument regarding  
unfairness. Before the arbitration panel, the appellants took the position that TransAlta ought not  
to have relied on those tests because (i) the use of the TVA test in this context was not common in  
the industry and (ii) from its previous fleet-wide experience, TransAlta should have known that  
the testing was unreliable. A related issue involved a faulty meter used in the March TVA tests,  
Page: 33  
something which arose in an October 1, 2013, email from Brown and was the subject of his  
surreply evidence.  
[126] The arbitration panel addressed the use of the TVA tests in its award. It acknowledged  
evidence that the TVA test is not used very much in North America but found that “it is an accepted  
test to determine the extent to which partial discharge and thus delamination is occurring in  
individual bars”: award at para 100. The arbitration panel accepted that the TVA test may not be  
used to determine fitness for service, but concluded, based on the evidence of the experts, that it  
is not inappropriate to use the test as part of an investigation to try to determine the cause of the  
trip and to gather information on individual bars: award at paras 106-107. The arbitration panel  
concluded that, [t]here was no good reason to exclude the TVA testing. Saying it is not part of  
the usual suite of tests used to determine a return to service is too narrow a view of what was  
occurring”, and that the inclusion of TVA testing at this point of the investigation of the cause of  
the trip fell within the definition of Good Operating Practice: award at paras 109-110.  
[127] Abnormally high TVA test readings had been detected at other TransAlta facilities, but  
those facilities had not been taken out of service. The appellants argued this showed that the  
decision to take the Unit out of service based on the TVA test was unreasonable. TransAlta’s  
witnesses were vague on the details but recalled that the other readings were taken during routine  
maintenance, not in response to a “trip”, so presumably were not of the same level of concern, and  
other testing minimized their importance: award at paras 158-163.  
[128] With respect to the calibration problem with the meter, the arbitration panel found that  
TransAlta had no reason to question the reliability of the readings at the time the decision was  
made to replace Bar T5: award at paras 158, 169-172, 176, 179. Most importantly, the arbitration  
panel found that the mis-calibration of the probe did not have any effect on the reasonableness of  
TransAlta’s decision. Even if corrected for the miscalibration, the readings from Bar T5 were still  
an “outlier” and significantly different from readings on the other stator bars. The arbitration panel  
said, at para 173 of the award, “regardless of any inaccuracy in the meter used, … Bar T5 was  
showing significantly different readings.”  
[129] The arbitration panel noted that, at the time the decision was made to replace Bar T5,  
TransAlta knew that very high TVA readings were found on one bar, had confirmation of the  
concerns raised by the TVA test through a partial discharge test, and had recommendations from  
both Hitachi and Kinectrics that Bar T5 needed to be replaced or it was likely the relay would trip  
again.  
[130] The arbitration panel’s ultimate conclusion with respect to the replacement of Bar T5 was  
that, based on the facts known to TransAlta in March and the recommendations of its consultants,  
Page: 34  
the decision to replace Bar T5 was reasonable and within Good Operating Practice. The decision  
fit the definition of GOP as “the exercise of reasonable judgment in light of the facts known or  
reasonably ascertainable”: award at paras 176-179.  
[131] It is important to place the argument regarding TVA testing within the entire context of the  
arbitration. In context, it was a minor issue. One of the 18 findings and determinations by the  
arbitration panel was that “there was no good reason to exclude the TVA testing”. The TVA testing  
issue related primarily to the decision to replace Bar T5. By the time the decision was made to  
conduct a complete rewind, the TVA test had been repeated using different probes, and significant  
other testing had been conducted: award at paras 188-189.  
[132] The arbitration panel also reviewed the decision not to return to service until the rewind  
was complete, the timing of the decision to order a full rewind kit, the decision not to have a spare  
rewind kit on hand, and the overall length of time it took to complete each step. On each point, the  
arbitration panel outlined the evidence, set out the differing perspectives and made fact findings  
and determinations, some of which were set out previously. At each point, the arbitration panel  
found that the decisions taken were reasonable and not contrary to Good Operating Practice.  
[133] The arbitration panel concluded there was a HILP event, noting that the Unit itself had  
experienced a major failure. The trip was not caused by any external factor, and the Unit was  
neither running nor generating electricity due to something internal to the Unit. Test results  
indicated significant partial discharges for Bar T5 which, coupled with increased PD readings,  
indicated deterioration of the insulation on Bar T5, which would lead at least to a further trip or  
worse. The decision to replace Bar T5 was reasonable, and the estimate of time it would take to do  
so made it reasonable for TransAlta to predict the Unit would remain off-line for more than 6  
weeks, thus qualifying as a HILP event: award at paras 257-262.  
[134] Extensive testing carried out after Bar T5 was replaced disclosed a larger problem. Due to  
the deterioration of the insulation system, a further trip, or actual ground fault, or worse, would  
occur prior to the next planned outage: award at paras 264-265. The HILP event had gone from a  
trip caused by a single bar to a predicted failure of the insulation system generally: award at para  
267.  
[135] On the issue of force majeure, the arbitration panel found that the fact the Unit was tripped  
was beyond the reasonable control of TransAlta, giving several reasons for that conclusion (award  
at para 269), as was the length of time it took to investigate the problem and carry out repairs  
(award at para 270). Accordingly, the trip was a HILP event and constituted a force majeure: award  
at para 271.  
Page: 35  
Do the procedural issues alleged by the appellants rise to the level of manifest unfairness?  
[136] There are three aspects to the assessment of whether the procedures adopted by the  
arbitration panel as they pertain to the undisclosed records resulted in manifest unfairness to the  
appellants or deprived them of an opportunity to present their case:  
1. Did the procedures adopted repeatedly deny the appellants access to the undisclosed  
records, as the appellants allege?  
2. To what extent were the undisclosed records crucial to the issues before the arbitration  
panel and to the appellants’ ability to put forward their case or respond to that of TransAlta?  
3. Did the arbitration panel’s comments regarding the TVA testing elevate the importance  
of the undisclosed records?  
1. Did the procedures adopted deny the appellants’ access to the undisclosed records?  
The reliance and request standard for document production  
[137] The appellants take issue with the methodology adopted by the arbitration panel with  
respect to document production. The parties had proposed a modified form of the document  
production process used in civil litigation, whereby parties produce the documents in their  
possession that are relevant and material. However, the arbitration panel determined that a  
reliance and requestapproach was more appropriate. In that approach, each party produces the  
documents it proposes to rely upon, and the other parties can then request other relevant and  
material records. One of the potential flaws identified by the appellants before the chambers judge  
was that in this case all the relevant documents were in the hands of TransAlta and not the  
appellants.  
[138] The chambers judge correctly noted that the reliance and request method is commonly used  
in arbitrations1 and is not inherently an unfair procedure. He also noted that it was entirely open to  
the arbitration panel to adopt this method of production and that section 20 of the Act grants the  
arbitration panel discretion in determining the procedures to be followed. We agree with the  
chambers judge’s holding that the arbitration panel’s adoption of this process was not unfair, much  
less manifestly so, nor did it deprive the appellants of the opportunity to present their case.  
[139] We cannot agree, however, with the comments of the chambers judge that the reliance and  
request process was an “unfortunate choice” (reasons at para 109), seemingly suggesting that as a  
1 see J Brian Casey, Arbitration Law of Canada: Practice and Procedure, 3rd ed (New York: Juris, 2017) at 260  
Page: 36  
method of production it is of a lower standard. Those comments are, in our view, a  
mischaracterization of the procedure. The underlying purpose and fundamental obligation of the  
“reliance and request method” and the method of document production generally used in civil  
litigation are the same each party is to produce relevant and material records in its possession.  
The only difference is timing. The obligation to produce arises at a different time, usually upon  
the delivery of a series of documents that give rise to a request for further documents. Regardless  
of which method is employed, the system hinges on the integrity and diligence of the litigants in  
ensuring full disclosure is made, as well as the obligation of counsel to advise clients of their  
disclosure obligations: see Demb v Valhalla Group Ltd, 2017 ABCA 340 at para 4; Catalyst  
Partners Inc v Meridian Packaging Ltd, 2007 ABCA 201 at para 5; Kent v Martin, 2018 ABCA  
202 at para 32. We take a similar view of the chambers judge’s criticism of the arbitration panel’s  
decision in Procedural Order No. 3 (see reasons at para 51), which criticism also seems to flow  
from his concerns with the reliance and request process.  
[140] In a related argument, the appellants submit it was unreasonable and unfair for the  
arbitration panel to insist that the appellants establish some degree of relevance for its document  
requests, a requirement that seems to be part of the reliance and request process. A review of the  
procedural orders shows that the arbitration panel’s initially narrow description of relevant  
documents as being “closer to the stator” expanded as more information and evidence came to  
light. As the chambers judge noted, the arbitration panel acknowledged at the outset that the scope  
of discovery would change over time as it came to understand the nature of the documents being  
requested, saying in Procedural Order No. 2:  
Without the benefit of engineering evidence it is difficult for the tribunal to easily  
determine proportionality and the scope of the discovery process on this issue.  
...  
... our decision in this Order may be revisited as further evidence is disclosed in the  
production process.  
[141] As the chambers judge found, at paras 125-126 of the reasons:  
As the process unfolded the Panel became increasingly informed. While it did not  
accede fully to the requests for Information, it did accede in part and it never  
precluded the Applicants from succeeding more fully at a later date, either prior to  
or during the hearing.  
Page: 37  
... it was not unfair for the Panel to deal with production issues in a measured  
fashion, on a graduated basis, taking care to keep the scope of the entire matter  
manageable and focused, not distracted by possible collateral facts.  
[142] When the process was complete, the parties were apparently satisfied with the level of  
knowledge they had obtained. The Balancing Pool acknowledged as much in its final written  
argument, saying that it “was satisfied with the state of the evidence following review of the  
unredacted email [of Brown] and did not pursue document requests of Kinectrics in other forums”.  
[143] As noted earlier, the Act contemplates that the arbitration panel will determine the  
procedures to be followed, and those procedural decisions are accorded deference: section 20(1).  
This is not a license to proceed in an unfair manner; the Act also requires that arbitrators treat the  
parties equally and fairly and give them an opportunity to present their case and respond to that of  
the other parties: section 19. The standard, however, is not one of perfection. “The duty of fairness  
is flexible and variable, and depends on an appreciation of the context of the particular statute”:  
Baker v Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817, 174 DLR (4th) 193  
at para 22. In the arbitral context, the inclusion of the word manifestlyin the governing statute  
“demonstrates a legislative intent that not every potential unfairness in an arbitration proceeding  
or decision will permit the Court to set aside an arbitration award”: Mitchell at paras 17-18.  
[144] The document production process employed by the arbitration panel here resulted in  
several distinct procedural rulings and repeated requests for additional documents, but it was not  
unfair. It certainly did not result in a level of manifest unfairness that goes to the validity of the  
arbitration, as required by section 45.  
The procedural orders  
[145] The appellants submit that, in the series of procedural orders issued by the arbitration panel,  
they were repeatedly denied production of the disputed records, and that this in turn denied the  
appellants the opportunity to present their case or respond to that of TransAlta.  
[146] A review of the procedural orders demonstrates, as found by the chambers judge, that it is  
inaccurate to say that the arbitration panel’s directions repeatedly denied the appellants the  
undisclosed records, or that the arbitration panel ever closed the door to the ability of the appellants  
to obtain those documents.  
[147] Procedural Order No. 1 set out general procedures for the arbitration, including the issues  
to be resolved and the document production standard. It contemplated that each party would  
provide all documents relied upon by that party with its statement of position, following which  
parties would be entitled to request the production of further records that are “relevant to an issue  
Page: 38  
and material to its outcome”. It also stated that the order “is not comprehensive as to the procedure  
to be followed for the Arbitration. The Parties are at liberty to apply to the Panel at any time for  
further directions…”.  
[148] The appellants requested that TransAlta produce additional information, including the  
results of TVA tests, largely in an effort to challenge their reliability and TransAlta’s decision to  
rely on them in the decision to replace Bar T5. The chambers judge found that fleet-wide TVA test  
records were not requested at that time, as the parties continued to negotiate a number of document  
requests: reasons at para 32.  
[149] As one of many lines of inquiry, ENMAX sought information related to TVA probe testing  
elsewhere by TransAlta (in its Request #71). TransAlta noted that it had produced records  
regarding its procedure and practice of using the TVA probe test, referred to its reliance on “third  
party industry experts and other publicly available documents” for guidance on TVA testing, and  
redacted other information said not to be relevant. In Procedural Order No. 2, the arbitration panel  
set out its general approach to relevance (at that point in the proceedings) as being “the closer the  
request is to the stator or the generator protection systems, the more clear it is that the documents  
should be produced” as being relevant to an issue and material to its outcome. The arbitration panel  
also noted that ENMAX and TransAlta continued to attempt to resolve some requests, including  
Request #71. No order for production was made, but the arbitration panel left the door open if  
further negotiations on document production proved unsuccessful.  
[150] The appellants continued to push for additional document disclosure on several issues.  
They sought broader production to deal with issues that went beyond the cause of the trip,  
including information that related to when TransAlta might have become aware of the suspect  
reliability of the TVA tests. TransAlta resisted on the basis that the information went beyond what  
was considered relevant according to Procedural Order No. 2, that the appellants were on a fishing  
expedition, and that it would be prejudicial to expand the scope of production at this point in the  
proceedings.  
[151] In Procedural Order No. 3, the arbitration panel said it saw no prejudice to additional  
document requests and reminded the parties that they had a fundamental legal obligation to  
disclose all records upon which they rely and to produce all relevant and material records requested  
by the opposite party. It also required that counsel expressly confirm that they make their clients  
aware of this obligation. The arbitration panel also indicated that the appellants could choose to  
leave the issue undecided until the oral hearing and raise it again then: reasons at para 114.  
[152] At this point, although ENMAX sought additional documents, it had stopped seeking  
access to fleetwide TVA testing records. The Balancing Pool, however, made a further attempt for  
Page: 39  
production of unredacted non-TVA related documents, as well as an “unredacted” copy of the  
Brown email about TVA tests at other TransAlta sites in 2012/2013. The email was said to indicate  
that TransAlta had received aberrant TVA readings at other units but did not initiate repairs at  
those other sites. In addition, the Balancing Pool sought a direction that Kinectrics records,  
including records relating to calibration issues with the TVA probe, were relevant and material  
and ought to be produced, to assist the Balancing Pool in applying to court for assistance in  
directing Kinectrics to provide documents.  
[153] In Procedural Order No. 4, the arbitration panel required TransAlta to produce an  
unredacted copy of the Brown email. It noted that TransAlta had advised it if any further  
calibration records it would produce them. The arbitration panel determined that it could not order  
third party disclosure from Kinectrics, particularly in its absence, and would not consider the extent  
to which those documents might be relevant and material beyond what was already produced. It  
advised that the Balancing Pool was at liberty to make a court application for those documents and  
that the arbitration panel could provide a certified copy of the order if required. No such court  
application was made.  
[154] The unredacted Brown email noted that “the Iris PPM97 meter reads high, dependent upon  
the range selected, and the readings are non-linear”, and provided a summary of the test results at  
“all TransAlta sites where the Iris PPM97 meter had been used since its purchase in March 2012.”  
[155] Shortly before the start of the hearing, the parties exchanged surreply evidence on a number  
of issues. TransAlta’s surreply, from Brown, focused on the issues arising from the Brown email  
and the use of the Iris TVA probe. The surreply offered reasons that TransAlta may have responded  
differently to the faulty TVA results at other units versus the March 2013 results for the Unit.  
[156] As the matter proceeded, therefore, the appellants knew about other test experiences,  
although it was admittedly late in the day. However, at that point they chose not to seek further  
production.  
[157] It is apparent that the arbitration panel was of the view that document production was never  
denied, and that the possibility remained for further production as the hearing progressed. At para  
164 of the award, the arbitration panel noted:  
In his cross-examination, Mr Brown was taken to the October email that lists the  
other sites, but no questions were asked about the readings at the other sites, nor  
was he asked about his explanations set out in his surreply witness statement.  
Instead, Respondents say his evidence on this point offends the best evidence rule  
and should be discarded. They say that evidence about the other sites should have  
Page: 40  
come from TransAlta. No documentation or reports regarding TVA test results  
from the other sites were produced at the hearing by TransAlta, nor did the  
Respondents seek further production.  
[158] This is borne out by the Balancing Pool’s acknowledgement in its final argument that:  
The Balancing Pool was satisfied with the state of the evidence following review  
of the un-redacted email and did not pursue document requests of Kinectrics in  
other forums.  
[159] The chambers judge found this to be the case on the record. He pointed out that the  
arbitration panel never ruled that the information was irrelevant, never denied production of the  
records, and never foreclosed the possibility of further production. Rather, the request was stood  
down. He noted that the arbitration panel demonstrated its will to allow deadlines to be exceeded,  
to allow surreply evidence, to allow a new witness from ENMAX very late in the process: reasons  
at para 134. He noted the arbitration panel’s comment that the appellants opted not to cross-  
examine Mr Brown about TVA testing at other sites and held “[t]he Panel did not act offside  
section 45(1)(f) of the Arbitration Act in expecting the Applicants’ position about TVA testing at  
other sites to be put to the one witness who undertook such testing”: reasons at para 131.  
[160] It is a fair reflection of the record and the findings of the chambers judge to conclude that  
the request for fleet wide records was never definitively determined and the prospect of those  
records becoming relevant and material, and therefore producible, remained open. When directly  
asked, the arbitration panel ordered production of an unredacted version of the Brown email, but  
no further application for additional records were made, either before the arbitration panel or  
before the court.  
[161] The chambers judge appears to have taken the view that the fleetwide TVA tests might  
have become relevant as a result of the Brown surreply, but noted that the appellants did not request  
an adjournment or any other procedural remedy to deal with that evidence and the Kinectrics  
records. The decision not to cross-examine Brown on his surreply evidence was said to have been  
made because that evidence was unsupported recollections and should not be accorded any weight.  
The arbitration panel seems to have agreed and gave little weight to the general observations of  
witnesses regarding why there might be a different response to high TVA readings at different  
sites.  
[162] The chambers judge concluded that the appellants made a tactical decision in deciding not  
to pursue cross-examination of Brown or further evidence on the point. It may be that the  
appellants concluded further evidence on the point could only diminish the effect of the evidence  
Page: 41  
of TransAlta’s response to TVA testing at other sites by explaining it away. That this was a tactical  
decision was an available conclusion on the record, as was the chambers judge’s conclusion that  
the absence of the undisclosed records did not constitute manifest unfairness in the proceedings.  
[163] It is not unusual in arbitration, or litigation, for the relevance of documents to become more  
significant as the proceedings unfold. What might have appeared immaterial can become more  
relevant as further information comes to light, and as the partiespositions and the issues  
crystallize. It is incumbent upon the parties themselves to reassert the position as the materiality  
of records becomes more likely or more obvious. The disclosure orders made by the arbitration  
panel allowed for this very possibility. Production, while not ordered, was not foreclosed. We  
agree with the chambers judge that there was no manifest unfairness or inequality in this process,  
nor were the appellants prevented from meeting the case of TransAlta.  
How crucial were the undisclosed documents to the issues determined by the arbitration panel and  
to the appellants’ ability to put forward their case?  
[164] Determining whether the prerequisite to setting aside an arbitration award exists because a  
party was “treated manifestly unfairly and unequally” or deprived of “an opportunity to present a  
case” under section 45(1)(f) of the Act requires consideration of whether the alleged errors  
challenge the fundamental validity of the process. Moreover, the unfairness must be “manifest”,  
in the sense that it is obvious or apparent. Where the unfairness is said to arise from the exclusion  
of evidence, that evidence must be crucial to the party’s case. If the alleged unfairness does not  
impact the proceedings in a meaningful way, it cannot rise to the level necessary to meet the criteria  
to set aside the arbitration award under section 45(1)(f).  
[165] Put briefly, the appellants wished to make the case that it was unreasonable for TransAlta  
to rely on the high readings from the TVA tests on the Unit because the TVA test is not widely  
used in the industry as a primary diagnostic test, TransAlta and its consultants should have known  
that the results were unreliable, and similarly high TVA readings at other sites did not result in  
shutdowns, repairs, or claims of force majeure. They say that the undisclosed records were crucial  
to that case, and they were unfairly precluded from obtaining them.  
[166] As discussed above and as the chambers judge found, production of the records was never  
foreclosed by the arbitration panel, and there was no manifest unfairness in the process. But in any  
event, the argument regarding the TVA results was of less importance in the context of the  
arbitration than the appellants now submit.  
[167] First, as was noted in the discussion of the arbitration award, it is important to place the  
arbitration panel’s conclusions regarding the TVA tests within the entire context of the award.  
Page: 42  
That TransAlta’s reliance on the TVA test was reasonable was one sub-issue in the review of  
TransAlta’s decision to remove Bar T5.  
[168] The arbitration panel concluded that there was no reason to exclude the TVA testing from  
TransAlta’s decision making process at the investigation stage. The argument that the TVA test  
was not in common use in the industry was found to confuse its appropriateness to determine  
fitness for service with its use as part of an investigation to try to determine the cause of the trip  
and to gather information on individual bars: award at paras 106-107. Mr. Milano, the appellants’  
expert who was familiar with TVA testing, acknowledged that TVA tests could be informative and  
could give information regarding the condition of insulation. If results are poor, it may be prudent  
to postpone or eliminate other testing.  
[169] With respect to the reliability of the TVA test results, the arbitration panel heard evidence  
that the TVA meter was miscalibrated, resulting in increased test readings. However, the  
arbitration panel concluded that this did not affect the reasonableness of TransAlta’s decision to  
replace Bar T5 because, even if the readings were corrected for the miscalibration, Bar T5  
remained an outlier and the test results showed a serious problem. The appellants’ argument also  
ignores the findings of the arbitration panel that, at the time the decision was made to replace Bar  
T5, the concerns raised from the TVA test were confirmed by other information, including a partial  
discharge test, and that TransAlta had opinions from both Hitachi and Kinectrics that Bar T5  
needed to be replaced or it was likely the relay would trip again.  
Do comments made in the award elevate the significance of the undisclosed records (the about  
faceissue)?  
[170] The appellants say that the “central unfairness” here emerged after the arbitration panel  
issued its award. The essence of the appellants’ concern is that they were denied disclosure of  
records under the control of TransAlta, following which the arbitration panel relied on the absence  
of that evidence in deciding a key issue. The appellants describe this as an “about face”, arguing  
that the arbitration panel’s procedural rulings denied production of the undisclosed records and  
prevented the appellants from putting forward the evidence they wanted to call, but in their award  
the arbitration panel held the absence of the undisclosed records to be material to their decision.  
Were that so, it might indeed result in manifest unfairness or denial of an opportunity to present a  
case: see, eg, Nortel Networks at paras 19-20; Ary Homes at paras 46-47; Arbutus Software v ACL  
Services Ltd, 2012 BCSC 1834 at para 81.  
[171] The appellants point to several passages of the award where they say the arbitration panel  
relied on the absence of the undisclosed records to support their conclusions.  
Page: 43  
[172] At para 162, the arbitration panel referred to the general evidence given by witnesses  
regarding the reasons why a particular unit might be dealt with in a particular way as a result of  
high TVA test readings. At paras 163 and 164 of the award, the arbitration panel went on to say:  
163 It can be argued that TransAlta, to be consistent, should have ignored the TVA  
results here, just as they did elsewhere, but this would lead to the need to have a  
detailed analysis of the reasons for the high readings for the various other units,  
evidence we do not have. Rather we have some evidence from Mr Brown that in a  
general way explains why the Keephills situation is different from the others.  
164 In his cross-examination, Mr Brown was taken to the October email that lists  
the other sites, but no questions were asked about the readings at the other sites, nor  
was he asked about his explanations set out in his surreply witness statement.  
Instead, Respondents say his evidence on this point offends the best evidence rule  
and should be discarded. They say that evidence about the other sites should have  
come from TransAlta. No documentation of reports regarding TVA results from  
the other sites were produced at the hearing by TransAlta, nor did the Respondents  
seek further production.  
[173] As discussed above, these comments reflect the arbitration panel’s view of the disclosure  
issue, which does not accord with the issue as framed by the appellants. It is apparent that the  
arbitration panel was of the view that document production was never denied, and that it was open  
to the appellants to cross-examine Brown on the significance of TVA results from other sites and  
to obtain additional documentation on that point, if required. The chambers judge also found this  
to be the case on the record and that the appellantsdecision not to cross-examine further was a  
tactical one, a conclusion with which we agree.  
[174] The comments at paras 169, 171, 172 and 176 of the award deal with the calibration  
problem with the TVA probe and the knowledge of TransAlta and Kinectrics with respect to the  
reliability of the TVA test results in March 2013, which has been discussed earlier in these reasons.  
The arbitration panel said:  
169 From the evidence we have about the other sites and the lack of any  
correspondence or documentation at the time the Keephills 1 readings were taken  
in March, the Panel must conclude that neither Kinectrics nor TransAlta had any  
concern about the reliability of the test equipment used to test the Unit in March,  
2013, nor any concern at the time that high readings at other sites should case the  
Keephills Unit to be dealt with differently that it was.  
Page: 44  
171 There also remains the question as to whether the meter lacked linearity only  
between ranges, or also exhibited non-linearity within a given range. The evidence  
on this point is conflicting and not at all clear.  
172 Mr Brown says he calibrated the meter before its use in March and it was  
working correctly. Whether or not this is so, the Panel must conclude on the  
evidence that the meter in question had some kind of linearity problem, but neither  
Mr Brown nor anyone at Hitachi or TransAlta had any reason to be concerned in  
March about the accuracy of the meter used in the TVA testing. The Panel has no  
evidence to suggest Mr Brown or TransAlta ought to have known the readings were  
faulty at that time.  
176 Based on the facts available in March, the Panel cannot say TransAlta had  
sufficient information to question the reliability of the test results or the opinions  
of Hitachi and Kinectrics to replace Bar 5. The TVA tests were clearly appropriate  
and could not be ignored. They militated against doing further hipot testing.  
[175] A review of the record and the award in its entirety makes clear that the observations  
regarding TransAlta’s level of knowledge about the reliability of the probe in March 2013 are a  
red herring. As was noted by the arbitration panel, even adjusting for the miscalibration the  
readings from the stator Bar T5 were an “outlier”. Even if the problem had been known, it would  
not have affected the reasonableness of TransAlta’s decision to replace Bar T5, nor affected the  
arbitration panel’s conclusions on the point.  
[176] These comments refer to the absence of fleet wide records that might have suggested that  
other TVA results from other sites were also high and raised questions regarding why TransAlta  
did not respond by shutting down those facilities as it did the Unit. There are a few relevant points.  
What evidence there was on the issue was that test results at other sites were not taken during an  
emergency but during routine maintenance, and that the TVA test results on the Unit were uniquely  
high. Moreover, the TVA tests were one piece of information used in the decision-making process  
to replace Bar T5. To suggest these comments reflect unfairness overstates the significance of the  
undisclosed records, both to the actual issue they might be used to determine and to the  
deliberations of the arbitration panel.  
[177] From the arbitration panel’s perspective, the fleetwide test results were not relevant to the  
matters at issue during the pre-hearing production, although we agree with the chambers judge’s  
Page: 45  
conclusion that the arbitration panel never definitively foreclosed production should the records  
eventually prove relevant and material. The arbitration panel’s interest in the records arose as a  
result of the Brown surreply, as borne out by its comments regarding the failure to cross-examine  
him. The chambers judge’s conclusion that this choice was a tactical one is well grounded in the  
record. Moreover, that the records may have gained in relevance does not mean that their absence  
was crucial to the ability of the appellants to put forward their case.  
[178] For the reasons set out above, we find that the chambers judge did not commit a palpable  
and overriding error in concluding that the failure to order production of these records earlier in  
the process did not render the entire arbitral process manifestly unfair or deprive the appellants of  
the opportunity to present their case or respond to that of TransAlta.  
Conclusion  
[179] The appeal is dismissed.  
Appeal heard on January 27, 2022  
Memorandum filed at Calgary, Alberta  
This 9th day of June, 2022  
Paperny J.A.  
Rowbotham J.A.  
Authorized to sign for:  
Strekaf J.A.  
Page: 46  
Appearances:  
D.W. McGrath, Q.C.  
M.C. O’Brien  
for the Appellant in 1901-0237AC  
J.A. Bancroft, Q.C.  
M. Gehlen  
P.L. Roche  
for the Appellant in 1901-0235AC  
M.J. Donaldson  
S.K. Hayes  
for the Respondent  



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