Non-parties/non-signatories Archives

April 12, 2024April 5, 2024

B.C. – Stay in favour of non-party to arbitration agreement in multi-party construction dispute – #828

In Vancouver Pile Driving Ltd. v. JGC Constructors BC Ltd., 2024 BCSC 344, the Court granted two applications to stay litigation arising out of a large multi-party construction dispute in favour of arbitration. The first Applicant was a contractor which had a subcontract with the Plaintiff that provided for mandatory arbitration, unless the dispute involved the owner or other project participants. The second Applicant was the owner, a non-party to the subcontract, which argued that if the litigation was stayed against the contractor, it should be stayed against the owner as well. The Court applied section 8 of the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 (“ICAA”) to stay the proceedings against the first Applicant. The Court also stayed the action against the second Applicant owner pursuant to section 10 of the Law and Equity Act, R.S.B.C. 1996, c. 253 to prevent a multiplicity of proceedings.

December 19, 2023December 18, 2023

Québec – Homologation refused where claim adjudication did not meet definition of “arbitration” – #800

In A. c. Frères du Sacré-Cœur, 2023 QCCS 2414, the Court determined that a claim adjudication process by two arbitrators pursuant to a class-action settlement agreement (“Agreement”) did not constitute arbitration. Therefore, the Court refused to homologate the arbitrators’ decisions, finding that two key features of arbitration described in Sport Maska Inc. v. Zittrer, [1988] 1 S.C.R. 564 (“Sport Maska”) were not present.

December 6, 2023December 8, 2023

Ontario – Court dismisses motion to quash notice of arbitration – #798

In Katerinaville Developments Ltd., v. Garthwood Homes Ltd.et al., 2023 ONSC 6267, the Court held that the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Act”), does not allow a plaintiff to quash a notice of arbitration in favour of a court proceeding, deferring to the arbitral tribunal for any determination of the unconscionability of an arbitration clause. Additionally, the Court emphasized that duplication of proceedings in Court and arbitration does not necessarily render the arbitration unfair.

November 7, 2023November 3, 2023

Alberta – Non-signatory principal bound by its agent’s arbitration agreement – #789

In LAPP Corporation v. Alberta, 2023 ABKB 566, the Court overruled the arbitrator’s decision in which he found that he had no jurisdiction over the Government of Alberta. In a de novo hearing pursuant to s. 17(9) of the Alberta Arbitration Act, R.S.O. 2000, c. A-43, the Court concluded that Alberta was bound by the arbitration agreement included in an Investment Management Agreement (IMA) between three Alberta public pension plans (Funds) and Alberta Investment Management Corporation (AIMCo). AIMCo is a fully state-owned investment management services provider created by the Alberta Investment Management Corporation Act. The Act specifically provides in Section 3(1) that AIMCo “is for all purposes an agent of the Crown in right of Alberta and may exercise its power and perform its duties and functions only as an agent of the Crown in right of Alberta.” Considering the broad and all-inclusive scope of the provision, the Court found that, while acting within its powers, AIMCo was always acting as Alberta’s agent and never on its own behalf. Alberta, as disclosed principal, was bound by an agreement made by its agent, even though it was not a party to the arbitration agreement.

October 11, 2023October 10, 2023

Québec – Arbitration clauses bind parties only, even if parallel proceedings – #780

In Clinique Ovo inc. v. Elite IVF, 2023 QCCA 1097 , the Court determined that an arbitration clause barred some, but not all third-party claims. The factual matrix underlying this decision is convoluted: two agreements; similar but not identical arbitration clauses; and multiple actors. The background facts are sensational: an alleged fraudulent in vitro impregnation involving parties in Geneva and Cyprus; a birth in Monaco; disputed support payments required from a bewildered father; and, inevitably, litigation with third-party claims raising issues of arbitration clause interface with the court proceedings. Against this backdrop, the Court of Appeal decision is grounded in a key and decisive first principle: arbitration clauses bind parties to the agreement, not strangers.

October 1, 2023October 1, 2023

Ontario – Arbitrator to decide whether non-signatories are bound to arbitrate – #776

In We Care Community Operating Ltd. v Bhardwaj, 2023 ONSC 4747, the Court granted the Plaintiff’s motion to compel arbitration under a Co-Ownership Agreement that related to a development property in Toronto. The Court deferred to the arbitrator the question of whether certain corporate entities – which were not signatories to the Co-Ownership Agreement – were nonetheless bound by the arbitration agreement contained in it.

August 30, 2023September 5, 2023

Québec – Arbitrator wrong to extend arbitration agreement to include third-party employees – #769

The Superior Court of Québec in Mullen c. Nakisa inc., 2023 QCCS 2678 held that employees not party to an arbitration agreement should not be added as parties to an ongoing arbitration. There is no support for the proposition that all third parties that are in some way related to the signatory parties of an arbitration agreement should be bound by it. This decision on the merits follows the stay granted by the Superior Court in October 2021 (Mullen c. Nakisa inc., 2021 QCCS 4388), covered in Case Note Québec – Stay of arbitrator’s decision to add third parties, force them to meet timetable, and refusal to hear them without payment – #553.

July 17, 2023July 17, 2023

Alberta – Restrictive interpretation of exceptions to stay applications – #754

In 2329716 Alberta Ltd. v Jagroop Randhawa, 2023 ABKB 297, the Court of King’s Bench stayed interim and injunctive relief applications pending a resolution of the parties’ dispute in arbitration. The Court found that the Respondent’s application for interim and injunctive relief related to arbitrable matters covered by the arbitration clause in the parties’ agreement, and that the summary judgment exception in ss. 7(2)(e) of the Alberta Arbitration Act did not apply because: (a) there had been no application for summary judgement; and (b) the Applicant did not attorn to the Court’s jurisdiction by seeking declaratory orders (in a previous proceeding that had been dismissed on procedural grounds) and injunctive relief (at the stay application hearing).

April 11, 2023April 10, 2023

B.C. – Arbitrator’s findings binding in subsequent court proceeding – #727

In his judgment from the trial in Betts v. Zienowicz, 2023 BCSC 328, Justice Macintosh considered, as a preliminary matter, the admissibility of findings of fact made in an earlier arbitration between the same individual parties and regarding the same issues. As no appeal had been taken from the Arbitrator’s award and given the deference owed to arbitral findings, Justice Macintosh adopted the facts as found by the Arbitrator in considering the issues before him. He then went on to find in favour of the plaintiffs, as had the Arbitrator.

March 30, 2023March 27, 2023

Québec – Interpretation of two shareholder agreements requires more than a superficial analysis – #725

In Gifran inc. c. 9225-2071 Québec inc., 2023 QCCA 311, the Québec Court of Appeal (the “Court”) recalled the principles governing an exception to the compétence-compétence principle and ordered a stay in favor of arbitration, overturning the Superior Court Judge’s decision. The Court commented on the scope of the exception relating to questions of mixed fact and law that require only superficial consideration of the evidence in the record, in the context of a shareholder dispute. It noted that the Superior Court Judge had not provided reasons as to why the exception applied in this case and found that the exception did not in fact apply, because an in-depth analysis of the respective scopes of two separate shareholder agreements (one with an arbitration clause and one without) was required. The Court also held that the mere presence of related third parties in the dispute was not sufficient to deny the stay application.