Arbitration Case Notes Archives - Page 5 of 95

May 9, 2025May 9, 2025

Québec – Clarification on territorial jurisdiction versus arbitral seat under C.C.P. – #904

In BE Franchise inc. v. 9415-1511 Québec inc., 2024 QCCA 1498, the Court of Appeal dismissed the Appellant’s appeal. It confirmed the Superior Court’s ruling that the court’s territorial jurisdiction was the Respondent’s domicile, unless the parties agree otherwise, according to the general territorial jurisdiction’s rules of the Code of Civil Procedure (sec. 41 to 48 C.C.P.) The Court also confirmed that the general territorial jurisdiction rules apply to arbitrations because of the absence of a district designation by the Parties and of the absence an agreement between the Parties or an arbitration rule that would give the arbitrator the jurisdiction to fix the place of arbitration and therefore the Court competent district. The Court also ruled that in Québec, the place where the arbitration award is made cannot be deemed to be the place of arbitration because of the language used in article 642 C.C.P., which is different from the language used in article 31(3) of the Model Law. Therefore, on this issue, Quebec law is different from the Model Law. In the present case, the Court of Appeal ruled that no facts showed that the place of arbitration was the same as the place where the award was rendered.

April 7, 2025April 7, 2025

Ontario – “No appeal” means “no appeal” (and other stuff) – #903

In Joseph Lebovic Charitable Foundation, et al v. Jewish Foundation of Greater Toronto, et al, 2024 ONCA 933,(“Lebovic“) the Court confirmed its prior ruling in Iris Technologies Inc. v. Rogers Communications Canada Inc., 2022 ONCA 634 (“Iris”). In both cases the arbitrator ruled, as a preliminary question, they had jurisdiction to decide the matter before them. In both cases one of the parties unsuccessfully sought a review of that ruling pursuant to s. 17(8) of the Ontario Arbitration Act, 1991. In both cases that party attempted to appeal to the Court of Appeal. And in both cases the motion to appeal was quashed with the Court of Appeal holding that s. 17(9) clearly prohibits any appeal from such a review.

April 7, 2025April 7, 2025

B.C. – Another Competence – Competence Analysis on a Stay Challenge – #902

In Touvongsa v. Lahouri, 2024 BCCA 405 (CanLII), the Court allowed an appeal of an order of the Supreme Court of British Columbia on the basis that the validity of the arbitration clause should be properly determined by the arbitrator by virtue of the principle of competence-competence and that none of the exceptions to this principle applied on the facts on the record. The chambers judge had found the arbitration clause unconscionable and thus inoperative. The Court made it clear that the competence-competence principle and also whether exceptions apply must be determined as a threshold question.

April 7, 2025April 7, 2025

Alberta – Multiplicity of Proceedings No Basis for Stay of Arbitration – #901

In Sivitilli v PesoRama Inc., 2025 ABCA 56, the Court clarified that the grounds for staying an arbitration are exhaustively set out in Section 7(2) of the Alberta Arbitration Act, which does not provide for a stay in the event of a multiplicity of proceedings. Section 6(c) of the Arbitration Act does not provide any further discretion to stay an arbitration. This decision is in line with the Supreme Court of Canada’s decision in TELUS Communications Inc. v. Wellman, 2019 SCC 19.

March 7, 2025March 7, 2025

Québec – Filing an action is not a waiver to arbitrate by Plaintiffs – #900

In Gauvin v. SBYC1935 Inc., 2025 QCCS 11, the Court granted an application by the Plaintiffs to have their own action stayed and referred to arbitration. The Defendant contested the application, arguing waiver of arbitration and tardiness in the filing of the application to stay, as the statutorily prescribed deadline to seek a stay was well past. The Defendant also argued the application was dilatory and an abuse of process by the Plaintiffs. The Court found that there was insufficient evidence of waiver and, noting that the deadline to seek a stay is not strict, it exercised its discretion to relieve the Plaintiffs’ delay.

March 7, 2025October 7, 2025

Ontario – More efficient expert determination process to proceed ahead of litigation – #899

The decision in CLEAResult Canada Inc. v. Santomero, 2024 ONSC 6054 reinforces the principle that courts will generally uphold private dispute resolution mechanisms unless there is prima facie evidence that the process is fundamentally flawed (see para. 67). Here, the court held that the more expeditious, efficient and simple process before an accounting expert (BDO Canada LLP) to determine the Reverse Earn-out Amount in an M&A dispute was to proceed in tandem with other litigation between the parties, and was not to be held up by that litigation.

March 7, 2025March 7, 2025

Ontario – Award set aside where one of three arbitrators biased – #898

Vento Motorcycles, Inc. v The United Mexican States, 2025 ONCA 82 is the second recent Ontario decision (after Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839 on the issue of reasonable apprehension of bias of an arbitrator, which arbitration practitioners have been awaiting. In this decision, there was no challenge to the finding in the Court below that the conduct of one of the arbitrators on a panel of three met the test for reasonable apprehension of bias. The appellant argued that the judge below was wrong to exercise her discretion to not set aside the award. This Court allowed the appeal and set aside the award. It found that it was impossible to determine whether one arbitrator’s bias affected the outcome. Reasonable apprehension of bias on the part of the arbitrator is such a serious breach of procedural fairness that the award must be set aside, even if it requires a re-hearing of the arbitration.

February 24, 2025February 24, 2025

Ontario – Natural justice does not require second opportunity to make submissions – #897

In Edenrock Holdings Inc. v. Moscone, 2025 ONSC 32, the Court refused to set aside an arbitral award, or grant leave to appeal, with respect to a claimed breach of natural justice, the supposed improper re-opening of earlier decisions, or the alleged apprehension bias of the Arbitrator who issued the Award. The Court found that there was no denial of natural justice when the Arbitrator ruled on a matter in respect of which the Applicants did not make submissions because they argued that the Arbitrator did not have jurisdiction. They argued they should have been given a separate opportunity after the Arbitrator ruled that he had jurisdiction.

February 24, 2025February 24, 2025

Alberta – Arbitration agreement did not bind non-signatory beneficiary under container contract – #896

In Husky Oil Operations Limited v Technip Stone & Webster Process Technology Inc, 2024 ABCA 369, the Court found that a non-signatory beneficiary under a contract was not bound by an arbitration agreement contained in it. The Court found the arbitration agreement did not contain the “clear and explicit language” it deemed necessary to bind the non-signatory.

February 24, 2025February 24, 2025

B.C. – Court finds pre-condition to competence-competence – #895

The competence-competence principle is well established in Canadian law. It requires that issues relating to an arbitrator’s jurisdiction are generally first to be determined by the arbitrator instead of the court. In ONE Lodging Holdings LLC v American Hotel Income Properties REIT (GP) Inc., 2024 BCSC 2179, the Chambers Judge identified what amounts to a pre-condition, or exception, to the application of the competence-competence principle beyond those previously recognized by the Supreme Court of Canada in cases such as Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) and Uber Technologies Inc. v. Heller, 2020 SCC 16. Those recognized exceptions are: (1) where the jurisdictional issue is a pure question of law or a question of mixed fact and law requiring only a cursory review of the documentary record, or (2) where there is a “real prospect” that the arbitrator may not be able to resolve the jurisdictional challenge due to practical barriers. Here, the Chambers Judge found that the competence-competence principle also does not apply when there is a dispute as to the existence of an arbitration agreement, as opposed to a dispute about the validity or scope of an existing arbitration agreement.