International Archives - Arbitration Matters

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.

June 9, 2025June 9, 2025

International – Waiver of State Immunity and State Parties to the NY Convention – #908

On 17 April 2025, England’s High Court released its judgment in CC/Devas (Mauritius) Ltd. et ors v The Republic of India. The judgment relates to sovereign immunity pursuant to the UK’s State Immunity Act 1978 (“SIA UK”) and the enforcement of arbitral awards made pursuant to a bilateral investment treaty (“BIT”). The specific question for the English High Court was whether or not India had submitted to the adjudicative jurisdiction of the English courts by its ratification of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1959) (“NY Convention”). In finding that India had not waived its sovereign immunity through “prior written agreement” only by ratifying the NY Convention, the English High Court has joined company with other American jurisprudence and has parted company with Canadian, Singaporean, and Dutch jurisprudence arising from the same factual background and underlying disputes.

March 7, 2025March 7, 2025

Ontario – Award set aside where one of three arbitrators biased – #898

Vento Motorcycles, Inc. v The United Mexican States, 2025 ONCA 82 is the second recent Ontario decision (after Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839 on the issue of reasonable apprehension of bias of an arbitrator, which arbitration practitioners have been awaiting. In this decision, there was no challenge to the finding in the Court below that the conduct of one of the arbitrators on a panel of three met the test for reasonable apprehension of bias. The appellant argued that the judge below was wrong to exercise her discretion to not set aside the award. This Court allowed the appeal and set aside the award. It found that it was impossible to determine whether one arbitrator’s bias affected the outcome. Reasonable apprehension of bias on the part of the arbitrator is such a serious breach of procedural fairness that the award must be set aside, even if it requires a re-hearing of the arbitration.

February 24, 2025February 24, 2025

B.C. – Court finds pre-condition to competence-competence – #895

The competence-competence principle is well established in Canadian law. It requires that issues relating to an arbitrator’s jurisdiction are generally first to be determined by the arbitrator instead of the court. In ONE Lodging Holdings LLC v American Hotel Income Properties REIT (GP) Inc., 2024 BCSC 2179, the Chambers Judge identified what amounts to a pre-condition, or exception, to the application of the competence-competence principle beyond those previously recognized by the Supreme Court of Canada in cases such as Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) and Uber Technologies Inc. v. Heller, 2020 SCC 16. Those recognized exceptions are: (1) where the jurisdictional issue is a pure question of law or a question of mixed fact and law requiring only a cursory review of the documentary record, or (2) where there is a “real prospect” that the arbitrator may not be able to resolve the jurisdictional challenge due to practical barriers. Here, the Chambers Judge found that the competence-competence principle also does not apply when there is a dispute as to the existence of an arbitration agreement, as opposed to a dispute about the validity or scope of an existing arbitration agreement.

January 28, 2025January 31, 2025

International – Agreement to Arbitration and Enforcement Jurisdiction a Package – #891

In Republic of India c. CCDM Holdings, 2024 QCCA 1620 the Court was asked to determine three appeals relating to the enforcement of arbitral awards in the context of: (1) both the commerciality exception and waiver in the State Immunity Act; (“SIA”) (2) seizure before judgment in escrow of sums held by the Montreal-headquartered International Air Transport Association (“IATA”) for the benefit of two Indian state entities before the question of their immunity had been decided on the merits; and (3) the temporal scope of provincial legislation passed in response to said seizures at the IATA. The Court concluded that: (1) India had waived immunity under the SIA by becoming a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”) and by agreeing to arbitration under the 1998 India-Mauritius bilateral investment treaty (“India-Mauritius BIT”); (2) the first-instance court had not erred in authorizing ex parte seizure before judgment in advance of the question of immunity being decided on the merits; and (3) the provincial legislation was effective retroactively to the effective date given therein but no further back in time – the seizure of sums held by the IATA prior to this date remained untouched by the legislation.

January 10, 2025January 10, 2025

Philippe’s 2024 Hot Topic – Québec courts rejected creative challenges to arbitral awards – #887

In 2024, parties raised various novel and creative grounds (and also some more traditional grounds) to seek annulment or resist the homologation of arbitral awards in Québec.

November 22, 2024November 20, 2024

Québec – Peace River not considered where referral to arbitration sought under LACC/CCAA – #877

In 9327-6269 Québec inc. and Banque de Montréal, 2024 QCCS 3399, the Court dismissed the Creditor Applicants’ demand to lift the stay of proceedings under the Loi sur les arrangements avec les créanciers des compagnies (LACC)/ Companies’ Creditors Arrangement Act (CCAA) so that they could file proceedings against one of the Debtors (Laboratoires C.O.P. inc.) in a New York-seated arbitration, where they sought to be declared owners of potential tax credits and refunds to which they alleged they were entitled as part of the selling price under a Sale Purchase Agreement between the Applicants and the Debtors’ shareholders. The Sale Purchase Agreement contained an arbitration clause. The Applicants argued that under New York law the Sale Purchase Agreement created a constructive trust in their favour, as a result of which the tax credits and refunds received or to be received by the Debtor were never included in the Debtor’s assets. Therefore, the Applicants argued that they should not be subject to the CCAA. The Court dismissed the Applicants’ motion. Even if the Applicants obtained a favourable ruling from the arbitration tribunal, it would be ineffective because the constructive trust concept is not recognized under Québec law and it would be detrimental to other creditors of the Debtor. In any event, the arbitral award would not modify the distribution order of the Debtors’ assets to their creditors under the CCAA because, when a conflict of law arises, the CCAA’s application is governed by the lex fori, in this case Québec. Foreign law should not alter the outcome of the CCAA’s implementation due to its rehabilitative purpose. Therefore, lifting the stay would not help the Applicants and would only cause the CCAA procedure to be delayed.

November 18, 2024November 22, 2024

Ontario – Application to enforce award against non-party to arbitration stayed – #875

In Sociedad Concesionaria Metropolitana De Salud S.A. v Webuild S.P.A, 2024 ONSC 4491 the Court considered whether to grant an application to enforce an arbitral award against a non-party to the arbitration. The non-party had purchased assets of the unsuccessful party to the arbitration as part of a restructuring proceeding in Italy. The successful party to the arbitration and the non-party disagreed on whether the asset purchase included the transfer of the unsuccessful party’s obligations under the award to the non-party. The Court stayed the enforcement application pending a determination of that threshold issue by the Italian courts.

October 23, 2024October 25, 2024

Federal Court – Section 46(1) of Marine Liability Act gives claimant option to avoid arbitration – #870

Crosby Molasses Company Limited v. Scot Stuttgart (Ship), 2024 FC 1358 highlights a little-known provision in Canadian maritime law that is being interpreted in a way that ignores arbitration law principles and overrides arbitration clauses in the context of international maritime carriage of goods. The provision, section 46(1) of the Marine Liability Act, SC 2001, c 6 (“Marine Liability Act”) states that, “if a contract for the carriage of goods by water provides for the adjudication or arbitration of claims… in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada...”

October 11, 2024October 11, 2024

Manitoba – Court denies stay in favour of arbitration for several (suspect) reasons – #868

In Bains and 10031670 Manitoba Ltd. v. Tworek et al, 2024 MBKB 111, the Court dismissed a motion to stay two court proceedings in favour of arbitration. In doing so, the Court ran afoul of some settled principles in Canadian (and international) arbitration law. These include interpreting the scope of the arbitration agreements, the test for a stay of proceedings in favour of arbitration, the separability presumption and concerns over inefficiency and multiplicity of proceedings where the dispute concerns both signatories and non-signatories to the arbitration agreement.