B.C. – Reasons for granting anti-suit injunction to prevent arbitration different than litigation – #818

In Axion Ventures Inc. v Bonner, 2024 BCSC 45 (“Axion”), the Court addressed a British Columbia application for anti-suit injunctions to prevent the respondents from proceeding with a Washington State lawsuit and an arbitration seated in Thailand. Axion is a skirmish in the ongoing war over the ownership and control of Axion Ventures Inc. and Axion Interactive (the two applicants in this case) and their assets and those of their subsidiary and related entities in other jurisdictions around the world. The applicants were both plaintiffs and defendants in litigation already underway in BC. For reasons described below the Court ultimately adjourned the anti-suit injunction applications. However, it recognized a distinction between anti-suit injunctions sought in respect of foreign court actions and those sought in respect of commercial arbitrations; namely, that the latter do not engage principles of comity. And of particular interest to BC counsel, the Court suggested there is no absolute rule in BC that an anti-suit can only be sought after a stay application is brought in the foreign proceeding.

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Manitoba – Court of Appeal quashes appeal of decision declaring clause invalid – #816

In Pokornik v. SkipTheDishes Restaurant Services Inc., 2024 MBCA 3, the Court dealt with a perennial issue—stays of arbitration in the class proceeding context. The decision has a few interesting takeaways, both arbitration-related and not, including one about the competence-competence principle. It also raises the thorny issue of when a stay motion decision may be appealed under section 7(6) of Manitoba’s domestic arbitration statute.

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Ontario – Crypto Trading Platform Arbitration Agreement Found Unenforceable – #814

In Lochan v. Binance Holdings Limited, 2023 ONSC 6714, the Court refused to stay a proposed class action against the defendant cryptocurrency trading platform in favour of arbitration. The underlying claim concerns allegations that the defendant sold cryptocurrency derivatives without filing a prospectus, contrary to Ontario’s securities laws. The Court held that the arbitration agreement, embedded in the defendant’s website terms and conditions, was both unconscionable and contrary to public policy – based on the cost of the arbitration contemplated by the agreement and based on the clause’s complexity and lack of transparency. The Court’s overarching concern was that the arbitration provisions were not fair to platform users. The Court also provided a helpful difference between unconscionability and a violation of public policy. 

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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. 

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Québec – Arbitrator has jurisdiction to determine lien entitlement; only court has jurisdiction to enforce – #794

Santé Montréal Collectif CJV c. Veolia Health Services Montreal 2023 QCCS 3817 concerned a dispute relating to the construction of a hospital complex. The Respondent, Veolia Health Services Montreal sec (“Veolia”), alleged it was due money for repair work as part of its contractual obligation to perform maintenance after construction of the hospital complex was complete. It filed a notice of arbitration and at the same time a hypothec, or lien, against the subject property (the “Mortgage Notice”) with the court. The Applicant, Sante Montreal CJV Collective sec (“CJV”) built the hospital complex. It, had separate obligations to ensure the property was clear of encumbrances and applied to strike the Mortgage Notice (the “Request to Strike”). Even though only the Court had authority to discharge the Mortgage Notice, it nonetheless suspended CJV’s application, pending the determination of the arbitration, and ruled that the Veolia’s entitlement to relief pursuant to the Mortgage Notice was an issue for an arbitrator to decide.

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Québec –Waiver of arbitration after court proceedings, despite letter proposing arbitration– #786

The Superior Court of Québec in 13647846 Canada inc. c. Phase III Wellington Griffintown inc., 2023 QCCS 3589 dismissed an application for a stay of proceedings in favor of arbitration on the grounds that: (i) it was made too late without justification, and (ii) the plaintiffs had waived their recourse to arbitration by submitting their dispute to the Superior Court first. Here, the plaintiffs brought legal proceedings with respect to a matter that was subject to an arbitration agreement. They then proposed arbitration by letter, which the defendants rejected. When the plaintiffs sought a stay of part of their own proceedings in favour of arbitration pursuant to Article 622 of the Québec Code of Civil Procedure (“CCP”), the Court found that they were out of time. The 45-day time period for the stay motion started when the court proceedings were commenced, and the stay application was not made within this period. It was irrelevant that their letter was sent within the 45-day period. The Court also found that plaintiffs had waived their right to arbitrate.

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Alberta –Stay of Arbitration Granted Where Potential For “Forensic Prejudice” – #785

In Dow Chemical Canada ULC v Nova Chemicals Corporation, 2023 ABCA 217, the Appellant Dow Chemical Canada ULC (“Dow”) obtained leave to appeal a decision of a lower court, which declined to make a declaration of invalidity of the arbitration or grant an injunction prohibiting the continuation of the arbitration pursuant to section Section 47 of the Arbitration Act, RSA 2000, c A-43. In Dow Chemical Canada ULC v Nova Chemicals Corporation, 2023 ABCA 262, a single judge of the Alberta Court of Appeal ordered a limited stay of the ongoing arbitration until a panel of the Court could decide the appeal. In that context, the judge found that “forensic prejudice” was sufficient to obtain the limited stay of arbitration. This referred not to prejudice to the applicant, but to the possibility that if Dow were correct that the arbitration were invalid, it might “embarrass the justice system” to allow the arbitration to proceed when it should not have.

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B.C. – Court articulates principles on fixing conditions in leave applications – #778

In Kingsgate Property Ltd. v The Board of Education of School District No. 39, 2023 BCSC 1266, the Court considered the text, context and purpose of s. 31(3) of the (former) Arbitration Act R.S.B.C. 1996 c. 55 (the “Arbitration Act”). (Comparable language appears in s. 59(5) of the current B.C. domestic Act.) That section allowed a court to attach such conditions to an order granting leave to appeal an arbitration award as it considers just. The Court determined that s. 31(3) empowered the Court to impose conditions on granting leave to appeal that will prevent miscarriages of justice. Here, the Court made two such orders sought by the petitioner Kingsgate Property Ltd. (the “Tenant”). Firstly, the Court settled the terms of security with respect to the Tenant’s appeal of an award made in a rent review arbitration (the “Award”). Secondly, the Court ordered a stay of the Award and a default notice the Board of Education of School District No. 39 School Board (the “Landlord ”) had issued for arrears of rent (the “Default Notice”). 

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B.C. – Arbitration clause in contract of adhesion not unconscionable/against public policy – #772

In Williams v. Amazon.com Inc., 2023 BCCA 314 the Court upheld a partial stay of a proposed class action in favour of arbitration. It found that the Chambers Judge did not err when she concluded that an arbitration clause that formed part of a contract of adhesion was not unconscionable or against public policy. In doing so, the Court distinguished the case from the Supreme Court of Canada decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”) on the issue of the applicable standard of review. In Ledcor, the Supreme Court determined that correctness standard applies when reviewing the interpretation of standard form contracts. Here, the British Columbia Court of Appeal found that a deferential standard was applicable because of the highly contextual and fact specific analysis required for determining unconscionability/public policy issues. The fact that a contract of adhesion was involved did not change that conclusion. The Court also distinguished this case from the Supreme Court of Canada decision in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”), where the Supreme Court found an arbitration clause in a contract of adhesion invalid on the basis of unconscionability and, in concurring reasons, as against public policy. The Court distinguished Uber because of, among other things, the “profound” differences that it noted in the two cases between the arbitration clauses at issue and the vulnerability of the plaintiffs.   

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Ontario – Stay granted: tort claims were in “pith and substance” contractual – #768

In Spasiw et al v. Quality Green Inc. et al, 2023 ONSC 4422, the Court granted the defendants’ motion to stay the action in favour of arbitration in the context of a shareholders dispute. The plaintiffs’ claims of fraudulent misrepresentation and oppression were “closely connected with and related to” the parties’ share purchase agreement and shareholders agreement and in “pith and substance” contractual.. Accordingly, the claims fell within the broad scope of the arbitration clauses contained in the parties’ two agreements. 

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