Arbitration Agreement Archives - Page 14 of 15

December 6, 2021May 4, 2022

BC – Franchisor addresses Uber arbitration agreement flaws to obtain stay of proceedings – #560

In Kang v Advanced Fresh Concepts Franchise Corp., 2021 BCPC 262, Small Claims Court Judge S. Archer granted a motion to stay an action in favour of arbitration under either section 8 of the International Commercial Arbitration Act, R.S.B.C. 1996 c.233 or, in the alternative, section 7 of the B.C. Arbitration Act, S.B.C. 2020, c.2. Judge Archer concluded that the international Act applied because the parties, at the time of their agreement, had their places of business in different countries, but that it didn’t matter because the test for a stay was essentially the same. Moreover, she distinguished the facts from those in Uber Technologies Inc. v Heller, 2020 SCC 16; the arbitration agreement was not unconscionable because the income earned by the claimant franchisee was “significant” as compared with the cost to commence an arbitration under the ICDR Rules.

November 26, 2021May 4, 2022

Ontario – Motion to quash appeal dismissed in light of conflicting policy implications – #558

In considering whether to grant a motion to quash an appeal in Leon v. Dealnet, 2021 ONSC 7192, Justice Kristjanson of the Ontario Divisional Court was faced with two conflicting policy concerns: respect for and giving effect to arbitration agreements and protecting vulnerable workers by ensuring that the arbitration agreement did not constitute a contracting out of an employee’s statutory rights

November 12, 2021May 4, 2022

Québec – Stay of arbitrator’s decision to add third parties, force them to meet timetable, and refusal to hear them without payment – #553

In Mullen v Nakisa inc., 2021 QCCS 4388, Justice Granosik granted applications to stay an arbitration as against parties who were added as cross-respondents, even though they were not parties to the arbitration agreement, pending judicial review of the arbitrator’s decision to add them. Justice Granosik was concerned that the applicants could be deprived of their right to have a matter determined by a court, and even risked having the arbitration take place in their absence.

October 27, 2021May 4, 2022

Québec – No referral to arbitration; arbitration clauses intended to “subvert” litigation process – #547

In Sigounis c. Sigounis, 2021 QCCS 4185, as part of his ruling addressing several interim applications, Justice Pinsonnault refused to refer the parties to arbitration in a drawn-out family dispute. The underlying oppression remedy action was commenced by the Plaintiff Jimmy Sigounis against his father, Defendant Nicolas Sigounis, and sister, Defendant Argyro Sigounis (“Argyro”), regarding the family’s interests in various private corporations (the “Chenoy Corporations”). While the action was ongoing, the father sold his interests in the Chenoy Corporations to co-Defendant Argyro (the “Transaction”). Thereafter, the father passed away and his widow (the Plaintiff’s, mother Eleni Sigounis), who had previously not been involved in the action, took over as “Defendant in Continuance of Suit” in her capacity as the estate’s liquidator and universal legatee. The Plaintiff and his mother then learned of the Transaction, which they both viewed as prejudicial to their interests; including that the Transaction potentially left the estate insolvent. Accordingly, the mother made several filings with the Court, including a Cross-Application and a Declaration of Intervention against Argyro (the “Filings”), seeking the cancellation of the Transaction. In response, Argyro brought the subject interim applications, including an application to refer all matters raised in the Filings to arbitration pursuant to the identical arbitration clauses in the Transaction agreements. In rejecting Argyro’s application, Justice Pinsonnault found that the dispute, as a whole, fell within one of the exceptions in the arbitration clauses as “a severe dispute over family matters” thus rendering the dispute outside the scope of the arbitration clauses in the Transaction agreements. In addition, Justice Pinsonnault took issue with the timing of the Transaction, which took place over two years after the action was commenced, and the Defendants’ intentions of subverting the litigation process by including the arbitration clauses in the event that the Transaction was contested.

October 26, 2021May 4, 2022

Ontario – Court of Appeal does not address whether Vavilov changed the standard of review – #546

In Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592, Justice Jamal (as he then was), writing for the Court of Appeal, found that it was unnecessary to address whether Vavilov changed the standard of review analysis in Sattva and Teal Cedar in an appeal from a commercial arbitration decision. Justice Jamal held that the parties’ disagreement as to how the applicable principles of contractual interpretation should be applied to the contractual facts is, absent an extricable error of law, an exercise of contractual interpretation by a first-instance decision maker on a matter of mixed fact and law that attracts appellant deference. Further, the Court should refrain from deciding issues of law that are unnecessary to the resolution of an appeal.

October 13, 2021May 4, 2022

Québec – Court favors arbitration even for related, but non-signatory, parties – #541

In 10053686 Canada inc. v. Tang, 2021 QCCS 3467, Justice Geeta Narang declined jurisdiction with respect to a dispute arising out of a Franchise Agreement. Plaintiffs were the franchisees and a director of a franchisee. Defendants were directors and shareholders of the franchisor. Justice Narang referred the case to private arbitration following Defendants’ demand for declinatory exception because the Franchise Agreement contained an arbitration clause. Justice Narang first concluded that the arbitration agreement was a “complete undertaking to arbitrate”, in conformity with the Supreme Court of Canada decision in Zodiak International v. Polish People Republic, [1983] 1 S.C.R. 529. She concluded that all allegations in the Plaintiffs’ claim were related to the franchisor-franchisee relationship and covered by the arbitration agreement. Secondly, she recognized the Legislator’s intention to favor a private dispute resolution mechanism over the public justice system whenever the parties have expressed the intention to resolve their dispute out of court. Thirdly, she granted Defendants’ demand for a declinatory exception, even though all Defendants and one of the Plaintiffs were non-signatories to the arbitration agreement. In interpreting the arbitration agreement liberally, she concluded that in this context ignoring the arbitration agreement because the Defendants were not parties to the arbitration agreement would be to rely upon a “blind technicality”.

October 12, 2021May 4, 2022

B.C. – Stay of portion of counterclaim not “improper bifurcation”; arbitration agreement bifurcated disputes – #540

In Mazzei Electric Ltd. v Western Canadian Construction Company Ltd., 2021 BCSC 1873, the Plaintiff applied to stay a portion of the counterclaim brought by the Defendant, on the basis that it was covered by the parties’ arbitration agreemeement. Justice W.A. Baker granted the stay while permitting the remainder of the counterclaim to proceed. In reaching her decision, she interpreted and applied a detailed and industry-specific dispute resolution clause, which allowed the parties to commence court proceedings to preserve a lien right. Justice Baker found that the Plaintiff’s lien action did not prevent it from seeking to have the Defendant’s counterclaim on other issues in dispute stayed in favour of arbitration.

September 28, 2021May 4, 2022

Saskatchewan – Arbitrator’s jurisdiction when one party alleged to have repudiated arbitration agreement – #536

In Saskatchewan v Capitol Steel Corporation, 2021 SKQB 224, Saskatchewan alleged that Capitol Steel Corporation (“CSC”) had repudiated the arbitration agreement in written submissions made just before the arbitration hearing. Saskatchewan’s position was that these submissions denied one of the recitals in the parties’ arbitration agreement that showed agreement on a matter which CSC then put in issue in the arbitration. Saskatchewan challenged the arbitrator’s jurisdiction as a result of CSC’s alleged repudiation of the arbitration agreement. The arbitrator dismissed the application and Saskatchewan then applied to the Court “to decide the matter” under s. 18(9) of The Arbitration Act, 1992, SS 1992, c A-24.1, which states that, “[i]f the arbitral tribunal rules on an objection as a preliminary question, a party may, within 30 days after receiving notice of the ruling, make an application to the court to decide the matter.” Justice Clackson found that the standard of review of an arbitrator’s preliminary decision on jurisdiction, where one party alleged the other repudiated the arbitration agreement, was correctness. He held that the arbitrator was correct in finding there was no repudiation because there was no anticipatory breach. The alleged breach did not deprive Saskatchewan of any of the rights that it had under the arbitration agreement.

September 27, 2021May 4, 2022

Manitoba – Broad arbitration clause in one agreement required stay of action based on related employment contract – #535

Relying on the growing body of arbitration-friendly jurisprudence from the Supreme Court of Canada and provincial appellate courts, the Manitoba Queens Bench in Wardrop v. Ericsson Canada Inc., 2021 MBQB 183 re-affirmed the importance of the court’s adherence to the stay provisions in s. 7 of The Arbitration Act, C.C.S.M. c. A120 (the “Act”). Justice Rempel held that an action for wrongful dismissal must be stayed. The key issue concerned the plaintiff employee’s entitlement in the severance period to bonuses made available pursuant to an agreement which contained a broad clause in favour of arbitration. That agreement was separate from the written employment agreement which the plaintiff employee alleged was breached and which did not contain an arbitration clause. However, the damages sought by the plaintiff related to the bonuses. Justice Rempel granted the defendant employer’s motion for a stay in light of the broad arbitration clause in one of the agreements. Further, in finding that there was no basis to refuse the stay under s. 7(2) of the Act, Justice Rempel narrowly interpreted the provision permitting a refusal of the stay where the matter was a proper one for summary judgment. The plaintiff employee did not satisfy the court that this exception, or any of the other bases for refusing a stay, was applicable.

September 14, 2021May 4, 2022

Québec – Arbitration clause cannot be avoided by bringing a class action – #531

In Centre de santé dentaire Gendron Delisle inc. c. La Personnelle, Assurances générales inc., 2021 QCCS 3463, Justice Davis reaffirmed that a valid arbitration clause will be enforced and cannot be avoided by the Plaintiff bringing a class action. In this matter, the Plaintiff sought authorization to bring a class action against various insurance companies under various insurance policies and to be appointed as representative Plaintiff on behalf of dental clinics which claimed business interruption losses caused by the COVID-19 pandemic. Justice Davis dismissed the request for authorization on the basis that it did not meet the requirements of Article 575(2) of the Code of Civil Procedure. However, he said that had he granted authorization, those insured dental clinics covered by an insurance contract containing a valid arbitration clause would have been excluded from the group covered by the class action and referred to arbitration.