In Beck v Vanbex Group Inc., 2021 BCSC 1619, Justice Fleming granted a partial stay of a proposed class action under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2. The issue before her was whether the Defendants had any evidentiary burden to meet to establish an “arguable case” that they were both proper parties to the arbitration agreement, thereby warranting a stay. The Plaintiffs argued that although one of the Defendants was not a signatory to the business agreement upon which they were suing and which contained the arbitration clause, both corporate Defendants were essentially alter egos of one another and both were liable to them. However, they argued that the Defendants’ stay application must be dismissed in the face of the Defendants’ evidence that the two corporate Defendants were entirely separate and one of them was not a proper party to the arbitration agreement. The Defendants agreed that, in the arbitration or at trial, their position would be that one of the Defendants was not a party to the arbitration agreement; however, they were entitled to a stay because: (1) if the Plaintiffs were correct, the action should be stayed; and (2) if the Plaintiffs were not correct, the Plaintiffs had no claim against the non-party Defendant anyway and the action would be dismissed. Justice Fleming agreed that the issues pleaded by the Plaintiffs demonstrated that it was arguable that both corporate Defendants were proper parties, notwithstanding the evidence adduced by the Defendants to the contrary.
Continue reading “B.C. – Stay motion: pleadings sufficient for “arguable case” that arbitration clause applies, despite contrary evidence – #534”B.C. – Under new B.C. Act, third party may apply to arbitrator OR court to set aside subpoena issued by arbitrator – #524
In Terrace Community Forest LLP v Skeena Sawmills Ltd., 2021 BCSC 1522, Justice Milman dismissed an application brought by the petitioner, Terrace Community Forest LLP (TCF), for an order under s. 29(4) of the new British Columbia Arbitration Act, S.B.C 2020, c. 2, to set aside a subpoena requested by the respondent, Skeena, and issued by the arbitrator. The subpoena required TCF to produce documents in an ongoing arbitration under the Act. TCF was not a party to the arbitration, but was a third party and was alleged to have documents that were relevant to the arbitration. Justice Milman’s decision turned on the meaning of the word “or” in s. 29(4), which provides that a subpoena issued to a third party may be set aside on application by the person named in the subpoena to the arbitral tribunal “or” the Supreme Court. Justice Milman held that the word “or” in this context was to be read exclusively, rather than inclusively, because: (a) by its plain meaning, s. 29(4) contemplates an application by the third party in the first instance to either the arbitrator or the court, but not both, and the Legislature could not have intended that a third party could make sequential applications to set aside the same subpoena if dissatisfied with the first answer it received (b) there is no provision in the Act for the third party to bring an appeal or seek a review of an arbitrator’s decision under s. 29(4) and (c) s. 4 of the Act precludes any review of an arbitrator’s order by the court except as provided in the Act.
Continue reading “B.C. – Under new B.C. Act, third party may apply to arbitrator OR court to set aside subpoena issued by arbitrator – #524”Québec – case referred to arbitration despite some parties and some claims possibly not covered by the arbitration agreement – #517
In Césario v Régnoux, 2021 QCCS 3009, Justice Johanne Mainville granted Defendants’ application to the Court to decline jurisdiction and refer the parties to arbitration (declinatory exception). Justice Mainville held that the record did not allow her to rule on the Court’s jurisdiction because of unanswered questions regarding the relationship between the parties and their conduct prior to executing the arbitration agreement. The arbitrator must therefore first rule on its own jurisdiction, even though Justice Mainville noted that some parties and some claims were possibly not covered by the arbitration agreement.
Continue reading “Québec – case referred to arbitration despite some parties and some claims possibly not covered by the arbitration agreement – #517”Ontario –Arbitrator has jurisdiction to appoint inspector under the Ontario Business Corporations Act if terms of parties’ arbitration agreement allows, but court assistance needed if third parties affected – #510
In Randhawa v. Randhawa, 2021 ONSC 3643, Justice Koehnen considered whether the arbitrator appointed by the parties had jurisdiction when he issued an award appointing an inspector to conduct an investigation. The applicant (Paul) and the respondent (Rana) were brothers, who were involved in a dispute about the separation of their interests in various businesses which they once ran together. Paul commenced an oppression remedy application in March 2018, which was resolved by Minutes of Settlement dated October 1, 2018. The Minutes of Settlement called for the dissolution or sale of the businesses and provided that any disputes arising from the implementation of the Minutes of Settlement were to be resolved by way of arbitration. Disputes arose and the arbitrator issued an award under the Ontario Business Corporations Act , R.S.O. 1990, c. B. 16, appointing an inspector to conduct an investigation. During the arbitration, Paul brought a court application for the appointment of a receiver over a portion of the brothers’ businesses. Although Rana agreed to the receiver’s appointment, he contested the receiver’s right to conduct an investigation that involved third parties. He also contested the arbitrator’s jurisdiction when he awarded the appointment of an investigator under the OBCA at all and because the investigation included the affairs of a third party. Justice Koehnen granted Paul’s application. He found that there was no previous case and nothing in the parties’ arbitration clause that prohibited an arbitrator from awarding a statutory remedy, including the appointment of an inspector. The arbitrator acknowledged that his jurisdiction was limited to the parties to the arbitration agreement and that any investigation of a third party would require the assistance of the court, which Justice Koehnen ordered. In addition, the parties had agreed to the appointment of a receiver and there was ample evidence of the need to investigate the affairs of the third party as they affected the issues in the dispute between the brothers.
Continue reading “Ontario –Arbitrator has jurisdiction to appoint inspector under the Ontario Business Corporations Act if terms of parties’ arbitration agreement allows, but court assistance needed if third parties affected – #510”