Holding a seed-potato arbitration hearing in Charlottetown to save travel costs did not give Prince Edward Island’s courts authority to review the resulting award, the province’s Court of Appeal has ruled.

In HZPC Americas Corp. v Skye View Farms Ltd., 2026 PECA 15, decided September 15, 2026, the court dismissed HZPC’s appeal because the arbitration’s legal seat remained Ontario. The parties had agreed where to hear the dispute, but had not agreed to change the jurisdiction whose arbitration law governed the process.

The ruling did not decide HZPC’s objections to the underlying award, including whether the arbitrator could resolve a dispute about seed potatoes. It upheld the earlier finding that a P.E.I. court lacked jurisdiction to undertake that review.

A potato sale disputed since 2014–15

HZPC, a seed-potato broker, buyer and seller, and P.E.I. grower Skye View Farms were members of a produce-industry dispute-resolution organization known as the DRC. Membership bound both companies to its mediation and arbitration rules.

Skye View alleged that HZPC orally agreed to purchase 5,000 hundredweight of seed potatoes for delivery to the United States. HZPC denied agreeing to buy them and maintained that it had acted as an agent trying to sell the potatoes to third parties.

Skye View began arbitration in March 2016. After correspondence about the expense of attending a hearing in Ottawa, the hearing took place in Charlottetown in May 2017. That July, the arbitrator found a contract existed and awarded Skye View US$82,500, plus $11,505 in costs. Those were the arbitrator’s 2017 awards, not new damages ordered by the appeal court.

HZPC subsequently challenged the arbitrator’s authority to deal with seed potatoes. The arbitrator rejected its request to amend the decision, noting that the jurisdictional objection had not been raised during the arbitration itself.

In the ensuing court proceeding, HZPC challenged the arbitrator’s subject-matter authority, compliance with the arbitration agreement and factual findings. But the applications judge first had to decide whether P.E.I. was the proper jurisdiction to hear those challenges.

A hearing venue is not necessarily a legal seat

Article 69 of the DRC rules designated Ontario as the arbitration’s legal seat unless the parties agreed otherwise. That choice made Ontario law govern the agreement to arbitrate and the arbitration procedure.

Chief Justice James W. Gormley, writing for the unanimous appeal panel, explained that a legal seat is not simply the room or province where witnesses give evidence. It identifies the legal framework governing the arbitration and court intervention. A hearing can take place elsewhere for convenience without changing that framework.

The applications judge had found that the companies never agreed to move the legal seat to P.E.I. Their correspondence concerned the practical cost of bringing the arbitrator to the Island rather than sending witnesses and lawyers to Ottawa. There was no discussion or agreement showing that they intended to change the legal jurisdiction.

The appeal court found no palpable and overriding error in that conclusion. Both companies were bound by the membership rules independently of their disagreement over whether the potato-purchase contract existed. Moving the physical hearing did not displace the Ontario seat those rules established.

Jurisdictional dismissal, not a decision on the award’s merits

Because the lower court had decided only the seat issue, the appeal court did not address HZPC’s remaining challenges. The judgment does not prohibit arbitration hearings outside their legal seat or resolve whether the arbitrator was right on the contract merits.

The court dismissed the appeal and awarded Skye View $25,000 in appeal costs, inclusive of tax and disbursements.