Arbitration Agreement Archives - Page 9 of 10

March 14, 2022May 4, 2022

Ontario – Court rejects cross-applications to appoint valuators as the arbitrator – #593

In MacBryce Holdings Inc. et al. v. Magnes Partnership et al, 2022 ONSC 321, Justice Gilmore of the Ontario Supreme Court of Justice refused competing applications by parties to appoint their respective proposed candidates as arbitrator. Each proposed arbitrator was also a qualified valuator, whose mandate was to determine the fair market value (“FMV”) of shares pursuant to a shareholders agreement. Justice Gilmore rejected the argument that the conduct of the arbitration was to be confined to a more truncated and informal process of reviewing existing valuation reports, which was the process as set out in the agreement. She found that the parties clearly agreed upon an arbitration, rather than a valuation, which invoked certain procedural protections. She ordered that the parties choose an arbitrator (who would be neither of their proposed candidates) and gave further directions on the conduct of the arbitration.

March 10, 2022May 4, 2022

Ontario – Start of limitation period determined by interpretation of stepped arbitration clause – #592

In Maisonneuve v Clark, 2022 ONCA 113, the Ontario Court of Appeal interpreted the language of an arbitration agreement to determine the applicable limitation period. It found that the application judge’s interpretation of that language was entitled to deference and that the palpable and overriding error standard of review applied. The application judge found that the following language in the arbitration clause made an attempt at informal resolution a pre-requisite to arbitration: “[i]f the parties are unable to resolve the Excluded Issue as between them, then the Excluded Issue shall be fully and finally referred to the Arbitrator for resolution”. The application judge found that the word “then” made the clause “both temporal and conditional”, after considering the wording of the arbitration clause and the factual matrix. The Court of Appeal found no palpable and overriding error and dismissed the appeal. Maisonneuve’s application to appoint an arbitrator was not time-barred; he had brought his application within two years of the date when he knew that a negotiated resolution was not possible.

February 16, 2022May 4, 2022

Ontario – Court overturns decision, “deciding the matter” of jurisdiction de novo – #586

In Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 894, Justice Perell set aside a preliminary jurisdiction decision rendered by a three-person arbitral tribunal. The tribunal found that the parties had agreed to arbitrate their dispute. The matter came before the court as an application under section 17(8) of the Arbitration Act, 1991, S.O. 1991, c. 17, which provides that the court may “decide the matter” of a jurisdictional objection where the arbitral tribunal rules on the objection as a preliminary question. Following the approach set out by the Divisional Court in The Russian Federation v. Luxtona Limited, 2021 ONSC 4604 (Lisa’s 2021 Top Pick: Ontario – Russian Federation v. Luxtona Limited (Part 1) – #564), Justice Perell held that he was required to “decide the matter” of whether the parties agreed to arbitrate on a de novo basis. He explicitly rejected the submission that administrative law or appellate standards of review have any relevance in an application to the court to “decide the matter” of whether parties agreed to arbitrate their dispute.

February 15, 2022May 4, 2022

B.C. – No breach of dispute resolution clause, no damages where party refused communication to resolve dispute – #584

In JM Bay Properties Inc. v Tung Cheng Yuen Buddhist Association, 2022 BCSC 81, Justice Walker found that a contract’s dispute resolution clause which provided that “parties shall make all reasonable efforts to resolve their dispute by amicable negotiations and agree to provide, without prejudice, frank, candid and timely disclosure of relevant facts, information and documents to facilitate these negotiations” was not breached in circumstances where a party decided not to engage in any further communication with the other party to resolve a dispute between them. Justice Walker noted that the party alleging breach did not raise its complaint about the dispute resolution clause at the time of the contract’s termination. Finally, he held that even if the party were in breach, the party alleging the breach failed to establish that it had suffered any damages.

January 20, 2022May 4, 2022

Saskatchewan – Waiver of arbitration in joint venture agreement read strictly – #576

In Beauchamp v Beauchamp, 2021 SKCA 148, the Saskatchewan Court of Appeal dismissed an appeal from a case management judge’s decision, which provided for how farming operations would be conducted for the following year, on an interim basis, until a dispute involving a Joint Venture Agreement (“JVA”) governing those operations was finally resolved. The appellant alleged that the judge misinterpreted his waiver of the right to arbitrate contained in the JVA. This waiver was provided on three occasions, in his agreement to put matters to the case management judge for the sake of expediency and urgency and in two written briefs, each using slightly different language. In these, the appellant agreed: 1) the case management judge could “make an order providing for how this grain farm is [to be] operated for the 2021 to 2022 crop year”; 2) he “will waive his reliance on the arbitration clause if” the judge was distributing the farming equipment or dividing the farming operation on an interim basis, but would not waive these rights if the judge were to order the entirety of the farming operation be divided exclusively among the only the other parties in the dispute; and 3) he “will waive his reliance on the arbitration clause if the Court’s authority to distribute the equipment of New Age Farms on an interim basis is an issue to the extent necessary to effect the dividing of the farm operation.” The Court of Appeal found that because the case management judge did not order the farming operation be exclusively undertaken by the other parties, and directed on an interim basis only how farming operations were to proceed, the judge did not violate the terms of the waiver. Indeed the case management judge had expressly held that the jurisdiction issue raised by the appellant needed to be resolved before the underlying litigation could proceed.

December 8, 2021May 4, 2022

BC – Stay granted where two relevant agreements, only one having arbitration clause – #562

In Canadian Pacific Railway Company v Canadian National Railway Company, 2021 BCSC, Justice Iyer ordered a stay of an action in favour of arbitration in circumstances in which she found that it was arguable that the parties’ dispute fell within two contracts between the parties – one that contained a mandatory arbitration clause and one that did not. Which agreement governed the dispute was an issue for the arbitrator to decide.

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.