Quebec Court Voids Arbitration Award Built on AI Hallucinations
# Quebec Superior Court Sets Aside Arbitral Award Due to AI Hallucinated Citations
The Quebec Superior Court of Canada annulled an arbitral award on April 22, 2026, in the case of Association des ressources intermédiaires d'hébergement du Québec (ARIHQ) v. Santé Québec, finding that the arbitrator had delegated the entire decision-making process to an AI system that fabricated every legal authority underlying the ruling Gowling WLG.
Justice Martin F. Sheehan, sitting in the Commercial Chamber under case number 2026 QCCS 1360, annulled the award under Article 646(3) of the *Code of Civil Procedure* on grounds that the applicable arbitration procedure was not observed. The court found that arbitrator Jeanniot had relied exclusively on non-existent court cases, fabricated academic articles, and fake arbitral awards—authorities that formed the sole foundation of the decision Gluckstein.
AI Hallucinations as Sole Legal Basis
Justice Sheehan stated in his ruling: "the fact that 100 per cent of the authorities cited in the Arbitrator's analysis were either hallucinated or not on point demonstrated to the Court that the Arbitrator went beyond using AI as an assistive aid, and strayed into fully delegating the decision-making process" LinkedIn post.
The award contained three non-existent court cases, a fake academic article, a non-existent arbitral award, and a labour tribunal decision cited for a proposition it did not support. The absence of legitimate legal reasoning proved catastrophic to the award's validity.
Systemic Threat to Arbitration Integrity
The court emphasized the broader implications of the breach. Justice Sheehan found that the use of hallucinated authorities was "likely to be detrimental to the parties' confidence in the entire arbitration regime, not simply this particular award" Gowling WLG. This reasoning signals that Canadian courts will scrutinize whether autonomous systems have replaced human judgment in contexts requiring accountability and transparency.
The Montreal-based dispute, involving healthcare intermediary services, marks the first reported instance of a Canadian court annulling an arbitration award primarily on the grounds of AI-delegated decision-making. The decision establishes judicial precedent that arbitrators cannot abdicate their legal reasoning responsibility to language models, regardless of the system's claimed accuracy or efficiency.
No monetary penalties or prison sentences were imposed; the arbitral award itself was voided entirely, requiring the dispute to be resolved through alternative means.
