In Fraser N Peterson Professional Corporation v Mark WM Leishman Professional Corporation, 2026 ABKB 568, the Court dismissed an application under section 47 of the Alberta Arbitration Act, RSA 2000, c A-43 (the “Act”) for a declaration that an arbitration agreement was invalid, and that the arbitrator lacked jurisdiction. Although the competence-competence principle would ordinarily require the arbitrator to decide the jurisdiction question first, the Court held that it could hear the jurisdictional challenge under section 47 of the Act. The Court relied on foundational efficiency principles, noting that the parties had advanced comprehensive submissions on an uncontested factual record, the dispute turned primarily on the interpretation of written agreements, and the statutory framework prevented the applicant from making the same challenge before the arbitrator. The Court concluded that the arbitration agreement was valid and survived the termination of the parties’ underlying contract.
Background to dispute – In 2018, the applicant, Fraser N Peterson Professional Corporation (“Peterson”), and the respondent, Mark WM Leishman Professional Corporation (“Leishman”), entered into an Associate Agreement under which Peterson provided dental services at Leishman’s practice in Pincher Creek, Alberta. The Associate Agreement contained a broad arbitration clause covering, “[a]ny dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof,” to be settled under the Arbitration Rules of the ADR Institute of Canada (“ADRIC”).
Peterson later gave notice of termination and the parties signed a Termination Agreement effective November 30, 2021. It stated that Peterson remained bound by insurance, confidentiality, non-solicitation, and non-competition covenants following the termination of the Associate Agreement. The arbitration clause was not on the list of surviving obligations.
The arbitration – A dispute later arose between the parties, and in September 2023, Leishman served a Notice of Request to Arbitrate alleging, among other things, breaches of the surviving restrictive covenants. Peterson refused to participate, maintaining that the arbitration agreement had ceased to exist as a result of the Termination Agreement. An arbitrator was appointed by ADRIC.
Peterson applied to the Court in or around November 2025 for declarations that the arbitration agreement was invalid and that the arbitrator lacked jurisdiction. It also asked for an order prohibiting the continuation of the arbitration.
The arbitration continued and, in December 2025, the arbitrator issued a ruling addressing the validity of the arbitration agreement and his jurisdiction over the dispute. The Court was not asked to review that jurisdictional ruling under section 17(9) of the Act and, instead, noted that its decision did, “not depend upon the existence or correctness of that ruling. Rather, it rests upon the statutory and contractual framework governing the parties, and the common law doctrines of competence-competence and separability.”
The Court’s decision on jurisdiction – The Court first held that Peterson had not participated in the arbitration, so it met the requirement to seek relief under section 47 of the Act. Section 47 allows the Court to grant a declaration that the arbitration agreement is invalid or has ceased to exist. Applying the leading case on a party’s participation in an arbitration, Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2023 ABCA 343 [Dow], the Court noted that Peterson had not taken part in appointing the arbitrator or in procedural conferences and had consistently denied that a valid arbitration existed.
The Court then considered whether it should decide the jurisdictional challenge, or leave it to the arbitrator pursuant to section 17(1) of the Act and the competence-competence principle. Citing Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41, the Court accepted that a court may decide a jurisdictional challenge that involves a pure question of law, or a question of mixed fact and law requiring only superficial review of the record. The Court concluded that Peterson’s application, which turned on interpreting written agreements, arguably fit within that exception. But the Court stressed that the exception is “permissive, not mandatory.” The Court found that ordinarily, this would not be a case for departing from the competence-competence principle.
However, the Court found that it could decide the issue, noting that the Court also has jurisdiction under section 47 of the Act, and relying on foundational rules of the Alberta Rules of Court, which promote the fair, timely, and cost-effective resolution of claims. The material facts were undisputed, the parties had made comprehensive submissions, and the issue was one of contractual interpretation. The Court also acknowledged that the statutory framework prevents a party in Peterson’s circumstances from making the same arguments before the arbitrator: if that party challenges jurisdiction before the arbitrator, it has participated and is barred from a later court challenge under section 47. However, not participating in arguments before the arbitrator means the arbitrator decides jurisdiction without hearing from the objecting party. In these circumstances, if the Court declined to decide the question, that would only lead to further proceedings before the arbitrator or an appellate court, with added delay and expense.
Peterson also argued that the Court could take on a limited role: the Court should intervene only if it determines that the arbitration agreement is invalid or has ceased to exist. If the Court could not make that finding, then it should dismiss the application without making any determination that the agreement was valid, and refer the matter back to the arbitrator. Peterson argued that the dismissal of its application would be akin to the dismissal of a summary judgment application, with no determination of the merits. The Court rejected this. Competence-competence determines who decides jurisdiction. Once the Court determines that it can decide the question, “the Court must actually decide it.”
The Court’s decision on the validity of the arbitration agreement – The Court reviewed the Associate Agreement, the Termination Agreement, and the ADRIC Rules and concluded that the Arbitration Agreement survived termination for the following reasons.
First, the arbitration clause was drafted broadly. By expressly covering disputes relating to the “termination” of the agreement, it contemplated disputes that would remain after the contractual relationship ended.
Second, the parties had expressly preserved certain covenants after termination, and Leishman’s claims were largely based on alleged breaches of those very covenants. The Court found the contractual framework was, “inconsistent with an intention to preserve substantive post-termination obligations while simultaneously extinguishing the agreed mechanism for resolving disputes arising from them.”
Third, the Court held that excluding the arbitration clause from the list of surviving provisions in the Termination Agreement was “not determinative.” The parties had incorporated the ADRIC Rules, and rule 4.9.1 provides that “the tribunal may rule on its own jurisdiction, including ruling on any objections to the existence or validity of the Arbitration Agreement, and for that purpose… an arbitration clause that forms part of a contract must be treated as an agreement independent of the other terms of the contract.” Section 17(3) of the Act codifies the same separability principle. Read together, these provisions meant that the Arbitration Agreement survived the termination of the larger contract. Consequently, the request to prohibit the continuation of the arbitration also failed.
Commentary:
Several aspects of the decision deserve a closer look.
First, the decision is a candid acknowledgement of the strategic bind that can arise in a challenge to the validity of an arbitration under section 47. A party that believes there is no arbitration agreement must either argue jurisdiction before the arbitrator under section 17(1), and lose its right to apply under section 47, or let the arbitrator decide without hearing from it. Here, that bind supported the Court’s decision to step in. Interestingly, the Court did not consider the issue of whether Peterson had waived its rights to make submissions before the arbitrator.
Second, section 47 specifically grants jurisdiction to the Court to decide if an arbitration agreement is invalid or has ceased to exist. However, the Court still described competence-competence as the starting point – which is consistent with the Court of Appeal’s direction in Dow at paragraph 26:
“There is no reason in principle to say that arbitrators are competent to decide if an issue is ‘a matter to be submitted to arbitration’ under s. 7 [the stay provision], but not whether the ‘arbitration agreement applies to the matter in dispute’ under s. 47. The competence-competence principle applies equally to both situations.”
The Court’s reliance on the foundational rules in the Alberta Rules of Court is curious here. However, in my view, the Court’s decision to determine the jurisdictional challenge is consistent with the existing exception to the competence-competence principle where a court can decide jurisdiction “on pure questions of law, or questions of mixed fact and law requiring only superficial consideration of the evidentiary record.” Of note, the Court did not rely on the fact that the arbitrator had ruled on his own jurisdiction first – that ruling just was not before the Court.
Third, it is not entirely clear why the applicant did not apply to the Court to “decide the matter” of the arbitrator’s jurisdiction under section 17(9) of the Act, given that there was a prior ruling on jurisdiction by the arbitrator. Instead, the Court noted that its decision did “not depend upon the existence or correctness of that ruling.” The answer to this may be in the fact that this application was made to the Court before the arbitrator’s ruling. Further, the reasons suggest that the arbitrator’s ruling was not actually before the Court, but only referred to in Leishman’s responding materials.
Fourth, the Court’s rejection of Peterson’s “heads I win, tails we go back to the arbitrator” approach matters for parties challenging arbitrations. Once the Court agrees it can decide jurisdiction, rather than sending it to the arbitrator, it must make that decision. Applicants should not expect a court to dismiss such an application while leaving the question open.
Finally, the decision is consistent with the separability doctrine, as codified in section 17(3) of the Act and rule 4.9.1 of the ADRIC Rules. The termination of an agreement will not, on its own, terminate an arbitration clause. If the parties intend an arbitration clause to terminate with the termination of the agreement, they should say so expressly.