Stay/Declinatory Exception Archives

September 13, 2024September 9, 2024

Alberta – Statutory Framework of Arbitral Appeals Clarified – Leave or No Leave? – #862

In Sivitilli v PesoRama Inc, 2024 ABCA 249, a single justice of the Alberta Court of Appeal set out and clarified the statutory framework for appeals to the Court of Appeal arising from challenges to arbitrations made on the basis that: (1) the arbitration agreement is invalid (s. 47 of the Arbitration Act); or (2) that court intervention is needed to prevent unfair or unequal treatment of a party to an arbitration agreement (s. 6(c)). The appeal route to the Court of Appeal for challenges brought pursuant to s. 47 of the Arbitration Act, RSA 2000, c A-43, which includes allegations that the arbitration agreement is invalid, expressly requires leave of the Court of Appeal. The appeal route for challenges to arbitrations made pursuant to s. 6, such as allegations that court intervention is needed to prevent unfair or unequal treatment of a party, are not addressed in the Arbitration Act, and therefore decisions of the first instance court are subject to a general right of appeal under the Alberta Rules of Court. No permission is required to appeal a decision under s. 6.

September 9, 2024September 9, 2024

Québec – First consideration of test for stay application for annulment application – #860

In ADRAQ (CSD) Laurentides c. Hamelin, 2024 QCCS 2324, the Court dismissed a motion brought pursuant to section 648 CCP to stay an application for annulment of an award to give the arbitrator the opportunity to correct it to eliminate the grounds for annulment. This is the first case to consider section 648 CCP. The Court developed the list of factors to be considered on such a motion. It also ruled that it has broad discretion in deciding a motion for a stay under section 648. In light of the preceding, the Court ruled that the judge deciding the merits of the application for annulment should decide the stay motion. That judge would have a better understanding of the case to determine whether a stay is appropriate considering the allegations, including alleged bias against the arbitrator, which the Court found were serious, and the respondent’s denial of the very existence of any grounds for annulment, leaving no place at this stage, for the arbitrator to correct his award. Therefore, the Court dismissed the respondent’s demand to stay the application for annulment.

August 29, 2024September 3, 2024

Nova Scotia – Court orders stay in favour of arbitration – but with conditions – #858

In Colbourne Chrysler Dodge Ram Ltd., v. MacDonald et al. v Colbourne, MacDougall, and Denny, 2024 NSSC 204, the Court stayed an action in favour of arbitration. Of interest to readers of this blog, the stay was made “subject to the parties moving forward in an efficient and expeditious manner” with the arbitration. The Court also ordered the arbitrator – notwithstanding that none had been appointed – to “in the first instance, determine any jurisdiction issues and/or defences which may be raised in connection with the claims made against [certain parties which were not signatories to the arbitration agreement].”

August 28, 2024September 3, 2024

Québec – Court finds separate arbitration agreement, despite arbitration clause in contract – #857

In Roxboro Excavation Inc. v. Delsan-AIM Environmental Services Inc., 2024 QCCS 2331 the Court declined to hear a dispute between the Applicant, Roxboro Excavation Inc. (“Roxboro”), and the Defendant, Les Services environnementales Delsan-A.I.M. Inc. (“Delsan”), on the grounds that it lacked jurisdiction because the parties had agreed to submit the matter to arbitration. Even though the subject contract included an arbitration clause, the Court did not interpret the clause or otherwise consider whether that clause required the parties to arbitrate the disputes. The Court instead focussed its analysis and decision on a separate agreement the parties had negotiated to resolve their disputes by arbitration and not in court.

August 2, 2024July 25, 2024

Québec – Petrowest factors applied: arbitration agreement held inoperative in CCAA proceedings – #852

In Arrangement relatif à Endoceutics inc., 2024 QCCS 1482 (CanLII) (“Endoceutics”), the Court, in obiter dicta, cited the stay of proceedings criteria set out in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41 (CanLII) (“Petrowest”) and held that it – rather than an arbitral tribunal – could rule on one party’s performance of its obligations under a contract governed by an arbitration agreement in the context of the analysis required by section 32(6) of the Companies’ Creditors Arrangement Act, R.S.C., 1985, c. C-36 (the “CCAA”). Section 32 allows a debtor company to disclaim or resiliate any agreement to which the company is a party on the day on which proceedings under the CCAA commence (subject to certain conditions).

July 22, 2024July 25, 2024

Federal – Competence- competence: a rule of chronological priority – #849

In Attorney General of Canada v. Aéroports de Montréal, 2023 FC 1562, the Court decided the issue of a tribunal’s jurisdiction under section 16(3) of the UNCITRAL Model Law, which is incorporated into the Commercial Arbitration Act, R.S.C., 1985, c. 17 as the “Commercial Arbitration Code” (the “CAC”). The tribunal had made a preliminary ruling that it had jurisdiction over the commercial dispute between the parties. The Court upheld the tribunal’s finding. The issue involved a determination of whether the arbitration clause in one of three related contracts applied. This case reiterates the following key arbitration principles: the power of an arbitral tribunal to rule on its own jurisdiction does not limit the powers of the Court to weigh and make its own findings of fact, on the basis of the evidence, and to consider and rule de novo on that jurisdiction; the Court must take the pleaded facts by a plaintiff as true on a jurisdiction motion; and if both interpretations of an arbitration agreement proposed by the parties are possible, priority must be given to the interpretation that favours the jurisdiction of the arbitral tribunal.

June 3, 2024May 30, 2024

B.C. – BCCA goes deep and wide on partial stays – #838

Davidson v. Lyra Growth Partners Inc., 2024 BCCA 133 concerns whether there is jurisdiction under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to grant a partial stay of court proceedings concerning only those matters arguably agreed to be arbitrated by the parties or whether a court is required to stay the entire action. The Court confirmed that partial stays are available under the Arbitration Act where the court action raises some non-arbitrable matters despite there being no express language permitting non-arbitrable matters to proceed in Court – unlike other provincial legislation. It set out factors that should be considered by a court of first instance in determining whether to grant a partial stay or a complete stay. It also emphasized, however, that a stay of those matters arguably agreed to be arbitrated is mandatory if the requirements of s. 7 are met. In this case it had been argued that a stay could be refused as the “essential nature” or “pith and substance” of the court proceedings related to matters not covered by the arbitration agreement. The Court confirmed that there is no “residual” jurisdiction to deny a stay on that basis. This decision aligns with the Supreme Court of Canada’s guidance in TELUS Communications Inc. v Wellman, 2019 SCC 19 (“Wellman”) concerning the mandatory nature of stays of court proceedings that relate to any matter arguably reserved for arbitration.

May 24, 2024May 24, 2024

Ontario – Court can hear set aside despite NY forum selection clause – #837

In Tehama Group Inc v Pythian Services Inc, 2024 ONSC 1819, the Court declined to stay an application to set aside an arbitration award. The stay application was based on a forum selection clause in favour of the courts of New York. In denying the stay, the Ontario court applied an exception in that forum selection clause regarding certain types of disputes under the parties’ agreement that were to be referred to arbitration. The key issue in the case concerned establishing the “place” of the arbitration, which had not been expressly set out by the parties or determined by the arbitrator. Applying the International Commercial Arbitration Act, RSO 1990, c I.9 (“ICAA”) and UNCITRAL Model Law on International Commercial Arbitration (“Model Law“) the Court determined that Toronto, Ontario, was the place of arbitration and that the Ontario Superior Court of Justice was therefore the only competent forum to decide the set-aside application.

May 21, 2024May 28, 2024

Ontario – Parties share responsibility to keep arbitration moving – #835

In Bank-Strox Renovation Inc. v. Lugano View Limited, (“Bank-Strox”) the Court dismissed the defendant’s motion to dismiss a construction lien action for delay where the had parties agreed to have their dispute resolved by arbitration. As a reminder of the sharp distinction between litigation and arbitration, the Court held that a respondent in an arbitration has the same, or in some circumstances a greater, contractual obligation to keep the arbitration moving as the claimant. Simply sitting back and doing nothing is not a basis to later seek dismissal of the claim for delay. That might work in a court case but it won’t where the parties have agreed to move their dispute to arbitration.

April 24, 2024April 19, 2024

B.C. – Consumer protection claim survives stay application through last-minute amendment – #830

Polanski v Vancouver Career College (Burnaby) Inc. concerns a defendant’s stay application brought under s. 7 of the Arbitration Act, SBC 2020, c 2 (“Arbitration Act”). The Court dismissed the application to stay certain claims made under s. 172 of the British Columbia Business Practices and Consumer Protection Act (“BPCPA”). The Court, relying on various appellate cases, held that s. 172 restricted the parties’ ability to agree to arbitrate and that the policy objectives of s. 172 would not be served by private and confidential arbitration. Why did the court need to re-articulate this well-established principle? Perhaps because the defendant needed to pivot after it had initially brought the application in response to the plaintiffs’ changing positions. The plaintiffs only added the s. 172 claims in the face of the stay motion and then only consented to the stay of the remainder of their claims for damages, including under s. 171 of the BPCPA, at the hearing of the application – no doubt, to the dismay of defence counsel who were facing a moving target. (A brief refresher for those in need it: s. 172 provides for private enforcement of consumer protection claims in the public interest, while s. 171 provides for a private remedy for damages or loss.)