Arbitration Agreement Archives - Page 2 of 15

July 3, 2025July 4, 2025

Québec – Court annuls award for failure to respect appointment procedure in arbitration clause. – #912

In Medicell Pharmaceutical (S) Pte Ltd v. Pharmascience Inc. 2025 QCCS 1325, the Court annulled an interim arbitral award issued ex parte, holding that the arbitrator had not been validly appointed under the parties’ agreement, which provided that the arbitration was to be administered by and conducted by one arbitrator in accordance with the rules of the Québec Code of Civil Procedure (“CCP”). In setting aside the award, the Court emphasized that arbitration is consent-based and that a party cannot unilaterally appoint an arbitrator, even in urgent circumstances and even when the parties’ arbitration agreement allows for provisional measures. Crucially, the Court held that Applicant, which sought the annulment of the interim award, had not waived compliance with the agreed appointment procedure – its silence and engagement, albeit limited, did not amount to tacit acceptance of the arbitrator’s appointment.

July 3, 2025July 4, 2025

B.C. – Website Terms Contained Enforceable and Not “Inoperative” Arbitration Clause – #911

In Fisher v Airfoam Industries Ltd. (Quad-Lock Building System), 2025 BCSC 758 (“Fisher”), the court considered an application to stay court proceedings in favour of arbitration pursuant to section 8 of the British Columbia International Commercial Arbitration Act, RSBC 1996, c 233 (“ICAA”). The court proceedings related to a dispute between a buyer and seller about the sale of goods that the buyer alleged were deficient. The applicant seller argued that the dispute was required to be submitted to arbitration pursuant to a mandatory arbitration clause that was included in the Terms and Conditions on the seller’s website. The court found that respondent buyer had signed sales orders that referred to the Terms and Conditions and that this was evidence that he agreed to them, including the arbitration clause. The respondent buyer argued that the applicant was estopped from relying on the arbitration clause because the respondent and applicant had a shared assumption that the arbitration clause would not be used and that the parties would instead litigate in court. The respondent buyer argued that, as a result, the clause was “inoperative” and unenforceable pursuant to section 8(2) of the ICAA. However, the court found that there was no evidence of any such shared assumption and therefore there was no estoppel. The court granted the stay application. This case is an important reminder that an arbitration agreement is just a contract and grounds that can render a contract unenforceable, such as estoppel, can also render an arbitration clause “inoperative” and unenforceable for the purpose of an application to stay court proceedings for arbitration.

July 3, 2025July 4, 2025

Alberta – Court enforces med/arb consent award over bias objection – #910

In Heine v Worsfold, 2025 ABKB 307, the court enforced a consent award rendered in a family dispute over objections that the arbitrator – who had also mediated the parties’ settlement – had demonstrated bias against the Applicant in the mediation. While the case raised a plethora of other issues, at the core were allegations about the mediator/arbitrator’s conduct in the mediation process.

June 9, 2025June 9, 2025

Ontario – Technical requirements for stay are precondition to competence-competence principle – #909

In Sherif Gerges Pharmacy Professional Corporation et al. v Niam Pharmaceuticals Inc. et al., 2025 ONSC 2058, the court granted the applicant leave to bring derivative actions, rather than refusing leave based on the respondents’ argument that leave should be denied because of an arbitration agreement contained in a shareholders agreement. In Peace River Hydro Partners v Petrowest Corp., 2022 SCC 41, the Supreme Court of Canada recognized four technical requirements for a stay of court proceedings in favour of arbitration, one of which is that the party applying for a stay of the court proceedings has not taken a step in the proceeding. Rather than bringing a motion to stay the applicant’s leave request under s. 7(1) of the Arbitration Act, 1991, SO 1991, c 17, the respondents participated in the litigation and only raised arguments about an arbitration agreement in their factum responding to the applicants’ leave application. The court applied Peace River, which would have applied had the respondents brought a stay motion, and found that the respondents did not satisfy the technical requirements for a stay, having taken a step in the court proceeding. Because those requirements are a precondition to a stay, the court did not engage with the respondents’ arguments related to the competence-competence principle, and refused to dismiss the application for leave to bring derivative actions on the basis that the court proceeding should proceed by way of arbitration.

June 9, 2025June 9, 2025

Nunavut – Court grants stay on grounds that “may arbitrate” clause is mandatory – #907

In Nuqsana Inc. v. Tangmaarvik Inland Camp Services Inc. et. al., 2025 NUCJ 13, the Court granted a stay in favour of arbitration, finding the arbitration agreement provided for mandatory arbitration once either party elected to pursue a dispute by arbitration. The Court interpreted the arbitration clause and found that after mandatory “private amicable discussion and negotiation…”, the language “then any of the Parties may refer the Dispute to Arbitration” required arbitration if one party invoked the clause. The stay provision in Nunavet’s arbitration legislation is significantly different than others among common law provinces.

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.

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 7, 2025February 10, 2025

Ontario – Breach of arbitration clause gives rise to cause of action – #894

In Fowlie et al v Wrestling Canada Lutte et al, 2024 ONSC 7196 (“Fowlie”), the Court considered the appeal of a motion judge’s order declining to strike a breach of contract claim made by a sports dispute resolution expert (“Expert”) against Wresting Canada Lutte (“WCL”). The Expert claimed that WCL had breached their contract by failing to engage in a contractual dispute resolution process before WCL terminated the contract without cause. The dispute resolution clause in the parties’ contract included the option to refer disputes to arbitration. The Court granted the appeal and struck the Expert’s claim. The Court held that the dispute resolution clause only applies when a “dispute” arises. Because there was no dispute as between the Expert and WCL about the validly of the without-cause termination while the contract was in force, there was no “dispute” to which to apply the dispute resolution clause. This decision is surprising in view of the separability principle that arbitration agreements survive contract termination. Arbitration jurisprudence suggests that the arbitration agreement in the contract between WCL and the Expert should have been treated as an independent agreement that survived termination of the main contact.

February 7, 2025February 25, 2025

Federal – Binding Mediation not Arbitration – #893

In RS Marine Ltd. v. M/V Terre Neuvas (Ship), 2024 FC 1825, the Court was tasked with considering whether to stay a proceeding in favour of arbitration in a dispute arising from a joint venture agreement between the plaintiffs—RS Marine Ltd. (“RSM”) and Murphy Marine Ltd. (“MML”)—and the French-based defendant SPM Ocean SAS (“SPM”). The key issue before the Court was whether a dispute resolution clause in the subject agreement required the parties to arbitrate their disputes. Relatedly, the Court had to consider if it had the authority to rule on this point or if it ought to be left to an arbitrator to rule on their own jurisdiction.

February 7, 2025February 10, 2025

Alberta – Court rejects Ontario approach to stays of enforcement – #892

In Inter Pipeline Ltd v Teine Energy Ltd, 2024 ABKB 740 (“Inter Pipeline”), the Court set out the three-part test a party must meet to obtain a stay of enforcement of a domestic arbitration award in Alberta, rejecting as “not principled” the two-part test that applies in Ontario. The Court also addressed the argument that refusing a sealing order in these circumstances would put a chill on challenges to arbitral awards.