Arbitration Matters

August 2, 2022August 2, 2022

Québec – 10-year limitation for foreign award recognition and enforcement– #644

In Itani v. Société Générale de Banque au Liban SAL, 2022 QCCA 920, the Québec Court of Appeal (Schrager, Moore, and Kalichman JJA) considered the limitation period for recognition and enforcement of an arbitral award rendered outside Québec. The Court applied the Supreme Court of Canada’s decision in Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19, confirming that recognition and enforcement of a foreign arbitral award is governed by the rules of procedure applicable in the territory in which the application is made―so it differs from province to province. The Court of Appeal considered the applicable provisions of the Québec Civil Code and ruled that the application to recognize and enforce the arbitral award was subject to a 10-year limitation period, upholding the decision of Justice Poulin at first instance.

July 29, 2022August 2, 2022

Ontario: Stay ordered as promissory note captured by separate arbitration agreement – #643

In Pioneer Cannabis Corp. v. 2715615 Ontario Inc., 2022 ONSC 3998, the Plaintiff’s action was stayed pursuant to s. 7(1) of Ontario’s Arbitration Act, 1991 (the “Act “) and the parties’ arbitration agreement found in their “Master Cannabis Agreement” (the “MCA”). The Plaintiff Pioneer Cannabis Corp (“Pioneer”) commenced an action alleging that the Defendants 2715615 Ontario Inc and Mr. Sangha owed money pursuant to a promissory note. The parties had entered into a number of agreements relating to cannabis retail consulting and brand licensing services including the MCA, a Retail Services Authorization Agreement (the “RSAA”), and a promissory note. On its motion to stay, the Defendants argued that the Plaintiff’s claim fell within the arbitration clause in the MCA. The Plaintiff, however, argued since its claim wass based solely on the promissory note, which should be viewed as a standalone instrument, it fell outside the scope of the arbitration clause. Associate Justice Robinson disagreed with Pioneer, found the arbitration agreement covered the promissory note, and granted the stay. As outlined below, in reaching his conclusion, Associate Justice Robinson applied the five-part test established by the Court of Appeal for Ontario in Haas v Gunasekaram, 2016 ONCA 744 (“Haas”)at paragraph 17 to determine whether an action should be stayed in favour of arbitration (the “Haas Test”).

July 29, 2022August 2, 2022

Alberta – Extra hurdle for appeals under s. 44(3) of Alberta Arbitration Act – #642

In Schreiner v Vistas at Callaghan Ltd, 2022 ABQB 472, Justice Davidson dismissed an application for leave to appeal an arbitral award, in part, on the basis that the issue raised by the applicant was a matter “squarely before the arbitrator” and was decided by her. Section 44(3) of the Alberta Arbitration Act, RSA 2000, c A-43 provides that no appeal lies on a question of law expressly referred to the arbitrator.

July 21, 2022July 25, 2022

Ontario – Arbitration clause not consideration; provides only detriment to contracting party – #641

In Goberdhan v Knights of Columbus, 2022 ONSC 3788, Justice Harris dismissed the Defendant’s motion to stay the Plaintiff’s wrongful dismissal action in favour of arbitration. The parties signed three employment contracts over a period of 8 years; the last two each contained a mandatory arbitration clause. The Plaintiff argued that there was no consideration for the second and third contracts, so he was entitled to sue. The Defendant argued that the arbitration clause itself was consideration and that a stay should be ordered because it was “arguable” that the dispute fell within the terms of the arbitration agreement. Justice Harris rejected the Defendant’s argument. He found that the last two contracts lacked consideration because there was no benefit flowing to the Plaintiff; essentially, he gave up his right to sue, which was a detriment, and gave him nothing in return. Therefore, because the main contract failed for lack of consideration, so too did the arbitration clause.

July 20, 2022July 20, 2022

Québec – Winning party advantaged by recourse to arbitration – #640

In Fiducie Groupe Carmen Forino v Fermes v. Forino & Fils inc., 2022 QCCS 2215, Justice Gagnon granted an application to homologate a final award. He found that the Defendants were asking the court to exceed the narrow scope of intervention available in that context and refused to revisit the arbitrator’s determination on the merits, even where the award might be based upon “shaky” legal grounds.

July 19, 2022July 21, 2022

British Columbia: – Court partially stays class action related to videogame “loot boxes” – #639

In Petty v Niantic Inc., 2022 BCSC 1077, Justice Mayer stayed a proposed class action in favour of arbitration, except in respect of claims advanced under B.C.’s Business Practices and Consumer Protection Act [BPCPA]. He rejected the Representative Plaintiffs’ arguments that the arbitration agreements were null and void for unconscionability and/or violating B.C. public policy. He also applied the competence-competence principle, holding the arbitral tribunal should decide first as to its jurisdiction over claims based on the Competition Act where the parties’ contract provided for California law.

July 18, 2022July 18, 2022

Québec – Light touch to determining arbitration clause application (except to the non-signatory, maybe!) – #638

In Cannatechnologie inc. c. Matica Enterprises Inc., 2022 QCCA 758, the Québec Court of Appeal (Justices Bélanger, Rancourt and Moore) affirmed the principle that a court should limit itself to a prima facie assessment of whether or not a dispute comes within the scope of an arbitration clause. If it does, a court proceeding regarding the dispute should be stayed so that the arbitrator can rule on his or her own jurisdiction.

July 15, 2022July 14, 2022

Alberta – Preliminary “ruling” on jurisdiction not an “award” – #637

In Brazeau (County) v Drayton Valley (Town), 2022 ABQB 443 , Justice Davidson considered the timeliness of an application for judicial review of both an arbitrator’s preliminary ruling on jurisdiction and the final award. The issues raised on the application are relevant beyond the statutory tribunal regime under the Municipal Government Act, RSA 2000, c M-26 (the “MGA”) and have broader significance. Of most interest is: (1) Justice Davidson’s determination that the limitation period for a challenge to an award begins to run only once there has been compliance with the statutory formalities of an award, including the requirement that it be signed; and (2) Justice Davidson’s conclusion that an application for ”judicial review” of an arbitrator’s preliminary jurisdiction “ruling” must be made within 30 days after it is released, and cannot be challenged as part of a review of the final award, even if it is sent to the parties again as an attachment to the final award. It is not part of the final award.

July 5, 2022July 14, 2022

British Columbia – Effect of consent orders staying proceedings in favour of arbitration – #636

Williams v. Audible Inc., 2022 BCSC 834 (“Audible”) is the second of two decisions by Justice Horsman extending stays of proceedings in favour of arbitration under s. 15 of the former Arbitration Act, R.S.B.C. 1996, c. 55 in the context of class proceedings. The first, Williams v. Amazon.com Inc., 2020 BCSC 300 (the “Amazon Stay Decision”), concerned a separate class proceeding, brought by the same representative plaintiffs as in Audible, alleging similar causes of action, but against Amazon. That decision is under appeal. In this case, Justice Horsman granted the stay sought by Audible. Following the principles in Seidel v TELUS Communications Inc., 2011 SCC 15, the parties agreed to a consent stay of proceedings in favour of arbitration in respect of the plaintiff’s non-consumer protection legislation claims because of the arbitration clause in the relevant contracts. On this application, Justice Horsman found that, because the representative plaintiffs’ non-consumer claims were stayed by virtue of a consent order, there was no proceeding in which to advance the claims of the other possible class members, whose claims related to a period of time when Audible’s contracts did not contain arbitration clause. Therefore, she granted an extension of the stay of those proceedings to cover those claims too.

July 5, 2022July 5, 2022

Ontario – Motion to “compel” participation in arbitration dismissed, despite arbitration clause – #635

In Black & McDonald v. Eiffage Innovative Canada Inc., 2022 ONSC 1855, Justice Dow was faced with two motions: (1) the defendants’ motion to stay the Ontario action on the basis of forum non conveniens; and (2) the plaintiff’s motion to “compel” the defendants to participate in arbitration as a result of an arbitration clause contained in the relevant contract. Justice Dow granted the stay on the ground that British Columbia was the proper forum, but declined to “compel” the defendants to participate in arbitration. He found that whether the arbitrator had jurisdiction over the dispute was to be determined by the arbitrator at first instance and that any failure on the part of the defendants to participate in an arbitration would have consequences for them in that proceeding.