Cases › made things up › LR-2026-0538
Canadian court annuls arbitral award over delegation to AI
Preliminary Why: Publisher not yet named · subject to change
Status: advice only, no fix reported
No source states: loss or records, developer and model, agent tool, could do, deployer, industry.
Severity moderate: Test: moderate, data or systems of others touched with a bounded scope. Fact: the award of one domestic arbitration was annulled and a new arbitrator ordered appointed within 60 days, with costs.
A sole arbitrator in a Quebec domestic arbitration, Michel Jeanniot, issued an award on 8 August 2025 that rested on legal authorities later found to be non-existent. He said he drafted the award himself, then asked a legal AI tool to supplement the ruling with additional authorities, and he did not validate those references. The applicants sought annulment in November 2025, pointing to indicia of generative AI drafting. The Quebec Superior Court found that the AI-supplied citations were fictitious and that the arbitrator had improperly delegated his decision-making authority. The court annulled the award and ordered the parties to appoint a new arbitrator within 60 days, with costs.
What happened
What was done
“It also means maintaining a clear record of how AI tools were used in the decision-making process, both for the arbitrator’s own protection and to preserve the integrity of the proceedings.”
Risks
Read from the sources; not yet reviewed by a person.
Controls
ApplicationDid not exist Grounding and fact checks
Control failure chain
L1 · ModelProvider not namedModel provider
No source mentions a control at this layer.
Model version not linked to a model card.
L2 · HarnessHarness not namedAgent framework vendor
No source mentions a control at this layer.
L3 · ApplicationDeployer not namedDeployer
Other controls for this risk at this layer, not mentioned in the sources: Human approval for high-impact actions, Output filtering and redaction, People told they are dealing with AI.
L4 · Infrastructure / targetOrganisation hit
No source mentions a control at this layer.
EffectiveNot effectiveNot effective (bypassed)Did not existNot stated in sourcesNot yet checkedAttacker's ownOrder: model · harness · application · target
Controls for this risk: result in this incident
| Control | Part of the system | Result |
|---|---|---|
| Grounding and fact checks | L3 Application | Did not exist |
| Human approval for high-impact actions | L3 Application | Not stated in sources |
| People told they are dealing with AI | L3 Application | Not stated in sources |
| Output filtering and redaction | L3 Application | Not stated in sources |
Evidence
- Cause a human check that existed was skipped or failed
No source states: when it happened, how many records were exposed, the direct loss, a count of the other parties affected, any court case, what set it off.
Show the full account: 5 items from the primary sources
What happened, in order
- 2025-07 Half-day hearing held in the domestic arbitration.
- 2025-11 Applicants filed for annulment of the award.
- 2025-08-08 Sole arbitrator rendered the award granting preliminary dismissal.
- 2026-04-22 Quebec Superior Court decision in ARIHQ v. Santé Québec, 2026 QCCS 1360.
Not dated in the sources:
- Court annulled the award and ordered a new arbitrator appointed within 60 days.
Show every field, with its source and grade
The AI system
What happened
Impact
Notes on gaps
Costs are ordered but not quantified.
LR-2026-0538 · version 1 · published 2026-11-01 after automatic checks; not yet checked field by field by a person · JSON