Mr. Justice Edward M. Morgan in Kore Meals LLC v. Freshii Development LLC, 2021 ONSC 2896 included a forum non conveniens-type analysis to grant a stay, including whether the forum and venue identified in the agreement to arbitrate were unfair or impractical for a party. Morgan J. favoured competence-competence and referred the parties to arbitration administered by the American Arbitration Association, confirming that neither knew where the AAA was located and both informed him that arbitration was likely conducted online because they “presume so since the pandemic has moved most proceedings of this nature to a digital forum”. “If hearings are held by videoconference, documents filed in digital form, and witnesses examined from remote locations, what is left of any challenge based on the unfairness or impracticality of any given forum? To ask the question is to answer it”. Morgan J. observed that “[i]t is by now an obvious point, but it bears repeating that a digital-based adjudicative system with a videoconference hearing is as distant and as nearby as the World Wide Web. With this in mind, the considerable legal learning that has gone into contests of competing forums over the years is now all but obsolete. Judges cannot say forum non conveniens we hardly knew you, but they can now say farewell to what was until recently a familiar doctrinal presence in the courthouse”. Morgan J. added “what is true for forum non conveniens is equally true for the access to justice approach to the arbitration question. Chicago and Toronto are all on the same cyber street. They are accessed in the identical way with a voice command or the click of a finger. No one venue is more or less unfair or impractical than another”. Morgan J. also included a party’s co-defendant parent in the referral despite being non-party to the agreement to arbitrate.
Chicago-based Kore Meals, LLC (“KM”) and Houston-based Freshii Development LLC (“FD”) entered into an October 31, 2009 Development Agent Agreement (“Agreement”) under which KM would develop Freshii franchises in Texas. The Agreement’s article 22A included an agreement to arbitrate by which KM and FD undertook to submit disputes between them to arbitration administered by the American Arbitration Association “in the city where Freshii Development has its business address”.
Claiming breach of the Agreement and unjust enrichment, Kore Meals instituted litigation in Toronto and included Freshii Inc., and Ontario corporation and FD’s parent company.
(i) Stay of proceedings – Morgan J. looked first to the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sch 5 (“ICAA”) and then the Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”). After his review of the ICAA at paras 9-16, Morgan J. turned at para. 17 to the Arbitration Act and noted that “[t]he test under the ICAA is, in effect, the same as the prevailing test under the Arbitration Act”.
Regarding section 5(3) of the ICAA, Morgan J. identified its applicant to international agreements involving “matters arising from all relationships of a commercial nature”. He described the Agreement as “a commercial franchise development contract for a restaurant chain” and noted, as Defendants pointed out, that the dispute as framed by KM involved both Houston’s FD and Ontario’s Freshii Inc.
Relying on the approach affirmed by Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (CanLII),  2 SCR 801 para. 84 and reiterated in Uber Technologies Inc. v. Heller, 2020 SCC 16 para. 34, Morgan J. reminded that a challenge the jurisdiction of the arbitrator should be resolved first by the arbitrator.
When presented with an arbitration agreement, Morgan J. evaluated the test for a stay of proceedings as “a relatively low one”. As source for the “governing principle is deference to the method contracted for by the parties”, Morgan J. to Ontario Medical Association v. Willis Canada Inc., 2013 ONCA 745. See para. 15 of Morgan J.’s reasons for a fuller excerpt on which he drew for guidance, including reference to Dalimpex Ltd. v. Janicki (2003), 2003 CanLII 34234 (ON CA) and Gulf Canada Resources Ltd. v. Arochem International Ltd. (1992), 1992 CanLII 4033 (BC CA). Morgan J. completed his comments on the test by pointing to Trade Finance Solutions Inc. v. Equinox Global Limited, 2018 ONCA 12 as a recent confirmation of “this deferential test”.
Having equated the tests under the ICAA and the Arbitration Act, Morgan J. then drew from Haas v. Gunasekaram, 2016 ONCA 744 and set out the following five (5) step inquiry: is there an arbitration agreement; what is the subject matter of the dispute; what is the scope of the arbitration agreement; does the dispute arguably fall within the scope of the arbitration agreement; and, are there grounds on which the court should refuse to stay the action?
Having set out the above regarding the ICAA and the Arbitration Act, and before turning next to forum non conveniens, Morgan J. concluded as follows:
“ As with the ICAA, unless the fifth question is answered in the affirmative – i.e. unless there is some cogent reason for ignoring the express terms of the arbitration clause in the DAA – a stay of proceedings is called for”.
Forum non conveniens – Morgan J. recorded the parties’ competing argument in favour of a specific venue and against the venue urged by the other. Plaintiff disputed the validity of the Chicago address set out by FD, providing “evidence casting doubt on whether the Defendants carry on any business at all in Chicago” while Defendants pointed to the terms of the Agreement in which the parties had agreed to Chicago as the venue.
Plaintiff argued that “real management and control of Freshii Development cannot possibly reside where the company has nothing but a post office box”. Defendants countered by pointing to the Agreement which “identifies the place of arbitration as the city in which Freshii Development has a business address, and not where it carries on business”.
Morgan J. recorded Plaintiff’s submissions on applying the “convenience factor” in deciding where to submit to arbitration and how the choice relates to access to justice.
“ Plaintiff’s counsel submit that the question of whether and where to submit to arbitration cannot ignore the convenience factor, as the choice of venue is directly related to access to justice. They point out that the Court of Appeal has for some time been of the view that arbitral proceedings ought not be held “where it would be either unfair or impractical to refer the matter to arbitration”: MDG Kingston Inc v. MDG Computers, 2008 ONCA 656, at para 36. In making this point, they rely on the statement of principle by the Supreme Court of Canada in Uber Technologies Inc. v. Heller, 2020 SCC 16, at para. 119, observing that, “…a measure intended to enhance access to justice is now to be used as a tool for cutting off access to justice. That cannot be right.””
Morgan J. at para. 22 tallied Plaintiff’s arguments against “an approach that would defeat the very purpose of arbitration clauses, i.e., ensuring efficiency and predictability for the parties in resolving disputes” and then offered the following observations on the parties’ submissions.
“ In posing these competing arguments, both sides are in a sense right. Plaintiffs cannot deny that they entered the DAA with eyes wide open, and that Chicago is the stated business address for Freshii Development and thus the presumed location of arbitral proceedings arising from their business relationship. Defendants, in turn, cannot deny that the choice of Chicago is based on a technicality rather than on any meaningful connection to that city, and that there is no substantive reason that would justify a proceeding taking place there”.
“Unfair or impractical” forum – Having set out the applicable principles on stay of proceedings, competence-competence and forum non conveniens and identifying certain disputed facts, Morgan J. then gathered them together to decide whether and why to stay the proceedings. The entire section at paras 25-32 is worth reading as whole to capture the approach outlined but, in summary, Morgan J. agreed to issue a stay.
Morgan J. relied on the Supreme Court of Canada’s statements in TELUS Communications Inc. v. Wellman, 2019 SCC 19 (CanLII),  2 SCR 144 at para. 65 as his source to confirm that “the factors to be considered in granting or refusing a stay of arbitral proceedings include the forum non conveniens-type analysis of whether the forum/venue identified in the arbitral agreement is unfair or impractical for one or another of the parties”.
Morgan J. signaled his inclination to agree with Defendants that the arbitrator had first authority to determine whether or not arbitration in Chicago was appropriate in the circumstances. He recorded Plaintiff’s argument that the “the arbitrator would have to sit somewhere in holding that preliminary inquiry and the DAA identifies Chicago as the forum – the very location being challenged as artificial and therefore unfair and impractical”. When he pressed to know the location of the AAA, neither counsel was able to definitively confirm the AAA’s location since the Agreement did not stipulate a particular city and submissions were made online.
“I then asked whether the hearing itself would be online, and counsel responded that they presume so since the pandemic has moved most proceedings of this nature to a digital forum”.
Morgan J. then spoke to the impact that online dispute resolution now had on forum non conveniens and the court’s approach to the stay in favour of arbitration. Those comments appear at paras 29, 31-32 and appear below.
“ All of which undermines the majority of forum non conveniens factors. If hearings are held by videoconference, documents filed in digital form, and witnesses examined from remote locations, what is left of any challenge based on the unfairness or impracticality of any given forum? To ask the question is to answer it. Freshii Developments may have a miniature post office box or an entire office tower in Chicago, and witnesses or documents may be located in Canada’s Northwest Territories or in the deep south of the United States, and no location would be any more or less convenient than another.
 It is by now an obvious point, but it bears repeating that a digital-based adjudicative system with a videoconference hearing is as distant and as nearby as the World Wide Web. With this in mind, the considerable legal learning that has gone into contests of competing forums over the years is now all but obsolete. Judges cannot say forum non conveniens we hardly knew you, but they can now say farewell to what was until recently a familiar doctrinal presence in the courthouse.
 And what is true for forum non conveniens is equally true for the access to justice approach to the arbitration question. Chicago and Toronto are all on the same cyber street. They are accessed in the identical way with a voice command or the click of a finger. No one venue is more or less unfair or impractical than another”.
In between those comments, at para. 30 Morgan J. anticipated that Freshii Inc. as a non-party can “likely be made party to the AAA arbitration despite not being a party” and referred to Pan Liberty Navigation Co. Ltd. v. World Link (H.K.) Resources Ltd., 2005 BCCA 206 and. Those comments appear to be obiter as he had decided and did order that jurisdiction would be decided first by the arbitrator. The latter might disagree with adding a non-party to the agreement to arbitrate, absent other elements raised in certain cases.
urbitral notes – First, referred to but not excerpted into Morgan J.’s reasons, the well-known statement in Dell Computer Corp. v. Union des consommateurs appears below for ease of reference.
“ First of all, I would lay down a general rule that in any case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must be resolved first by the arbitrator. A court should depart from the rule of systematic referral to arbitration only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law. This exception is justified by the courts’ expertise in resolving such questions, by the fact that the court is the forum to which the parties apply first when requesting referral and by the rule that an arbitrator’s decision regarding his or her jurisdiction can be reviewed by a court. It allows a legal argument relating to the arbitrator’s jurisdiction to be resolved once and for all, and also allows the parties to avoid duplication of a strictly legal debate. In addition, the danger that a party will obstruct the process by manipulating procedural rules will be reduced, since the court must not, in ruling on the arbitrator’s jurisdiction, consider the facts leading to the application of the arbitration clause”.