notes on new arbitration cases in Canada
In 10060 Jasper Avenue Building Limited v Scotia Place Tower III Inc, 2023 ABKB 23, Justice Summers refused an application to stay a proceeding brought by the party who commenced it. He found that the applicant party did not have status to make the application under the relevant arbitration legislation.
Continue reading “Alberta – Claimants denied stay of own action in favour of arbitration – #716”
In 3-Sigma Consulting Inc. v Ostara Nutrient Recovery Technologies Inc, 2023 BCSC 100. Justice Matthews granted a stay of proceedings, finding that the, “arguable case standard provides room for a judge to dismiss a stay application when there is no nexus between the claims and the matters reserved for arbitration, while referring to the arbitrator any legitimate question of the scope of the arbitration jurisdiction” relying upon Clayworth v. Octaform Systems Inc., 2020 BCCA 117 at para. 30. Here there was such a nexus, so the matter was referred to the arbitrator to decide jurisdiction.
Continue reading “B.C. – Recent shift towards competence-competence in arbitration clause interpretation? – #714”
In Singer Enterprises Inc. v. Parrish & Heinbecker, Ltd., 2022 SKKB 268, Justice Currie found, based on the principles of competence-competence, that an arbitral tribunal has the jurisdiction to determine whether an arbitration clause is unconscionable and improvident, because such a determination is not a question of law alone and requires a review of the facts. He stayed the plaintiff’s action pending that determination by the tribunal in an arbitration already commenced by the defendant.
Continue reading “Saskatchewan – Tribunal to decide whether arbitration clause is unconscionable – #711”
In IBI Group Architects (Canada) Inc. v Edmonton (City), 2022 CarswellAlta 1805, the applicants, IBI Group Architects (Canada) Inc. and a related party (“IBI”), applied to stay an arbitration commenced by the City of Edmonton in favour of court proceedings. Although there is no express power to stay arbitrations under the Alberta Arbitration Act, RSA 2000, c A-43(“the Act”), the application was brought under subsection 6(c) which provides “[n]o court may intervene in matters governed by this Act, except for the following purposes as provided by this Act…(c) to prevent manifestly unfair or unequal treatment of a party to an arbitration agreement”. Previously, the Alberta Court of Appeal held in New Era Nutrition Inc. v Balance Bar Company, 2004 ABCA 280 (“New Era”), that courts could use subsection 6(c) to provide a remedy to cure unfairness arising from matters not covered by the specific language of the Act and that it could be used to allow “a party, faced with both a statement of claim and a notice to arbitrate, to apply to stay the arbitration on the basis that the matters in the two proceedings overlap and cannot be reasonably separated” in order to avoid unfairness (para. 43). IBI argued, among other things, that it needed the full participation and evidence of non-parties to the arbitration clause to defend itself and so if it were forced to arbitrate it would be unable to meet the case against it, which was manifestly unfair and so the arbitration should be stayed. Justice Dunlop, delivering his decision from the bench, refused the application to stay the arbitration as he determined that he had no jurisdiction to do so under the Act. He concluded that New Era “was no longer good law” in Alberta as the case had been considered and expressly overruled by the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, 2019 SCC 19 (CanLII), [2019] 2 SCR 144 (“Telus v Wellman”).
Continue reading “Alberta – Power to prevent “manifestly unfair treatment” not power to stay arbitration – #706”
By James Plotkin and Eric Morgan.
Our last Case Note reviewed the Ontario Court of Appeal’s Mundo decision. Here we consider the more recent decision of Peace River Hydro Partners v Petrowest, 2022 SCC 41 (“Petrowest”).
Continue reading “Eric/James 2022 Hot Topic: What is next for arbitration and insolvency? (Part 2) – #701”
By Eric Morgan and James Plotkin.
This past year brought two important decisions about the interrelationship between arbitration and insolvency proceedings: the Supreme Court’s decision in Peace River Hydro Partners v Petrowest, 2022 SCC 41 (“Petrowest”) and the Ontario Court of Appeal’s decision in Mundo Media Ltd. (Re), 2022 ONCA 607 (“Mundo”). Both decisions, in different ways, concern the tension between judicial authority to supervise proceedings brought by a receiver or trustee under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (“BIA”) and parties’ autonomy to choose to have their disputes determined through arbitration. While the two Courts reached the same bottom-line conclusion – that the particular arbitration clauses were “inoperative” in the circumstances of an insolvency and thus not binding on receivers or trustees – the decisions leave unanswered questions about the ways that insolvency and arbitration continue to interact with each other.
Continue reading “Eric/James’s 2022 Hot Topic: What is next for arbitration and insolvency? (Part 1) – #698”
The last year has seen several judgments which bind third parties to arbitration, specifically in Québec. The basic principles remain unchanged: the rule is still that a contract has effect only between the contracting parties (sec. 1440 CCQ). However, there is a trend, which seemed clear starting in 2021 and continues into 2022, to bring non-signatories into arbitration in certain circumstances, as set out in Québec’s recent judgments. Many reasons explain these decisions: let’s explore why this new trend is arising in Québec.
Continue reading “Marie-Claude’s 2022 Hot Topic: Binding non-signatories – A new trend arising in Québec? – #697”
In Azam v Multani Custom Homes Ltd., 2022 ONSC 6536, Justice Chang denied the defendant’s application to stay litigation under section 7 of the Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) upon finding the defendant unduly delayed bringing the application for a stay, after having actively participated in many steps to advance the litigation over a 16-month period, with the effect that the defendant had abandoned its rights to rely upon the arbitration clause and it was therefore invalid.
Continue reading “Ontario – Participation in litigation beyond pleadings waives arbitration agreement – #693”
In 12823543 Canada Ltd. v Mizrahi Commercial (The One) GP Inc., 2022 ONSC 6206, Justice Penny granted an application to stay the proceeding commenced before the Superior Court of Justice and referred the matter to the appropriate arbitral tribunal to decide its jurisdiction. He found that the moving parties had raised an arguable case as to the application of the relevant arbitration agreements to the dispute and that the principle of compétence-compétence therefore favoured directing the parties to address their arguments to the arbitral tribunal regarding its jurisdiction. Only two of the three agreements at issue contained an arbitration agreement and yet Justice Penny was swayed by the nature of the dispute, grounded in a broad oppression claim, and considered that the Applicant’s allegations raised issues that went straight to the ability of the shareholders to make decisions of fundamental significance to their joint project.
Continue reading “Ontario – Shareholders dispute stayed where 2 of 3 agreements had arbitration clauses – #690”
In Peace River Hydro Partners v Petrowest, 2022 SCC 41, the central issue was whether a receiver/trustee in bankruptcy may disclaim the arbitration clause in a contract and sue in the courts when it seeks to enforce the debtor’s contractual rights against third parties. The case concerned the tension between the court’s supervisory power over all proceedings brought by a receiver/trustee under the Bankruptcy and Insolvency Act (BIA) RSC 1985, c. B-3, and party autonomy to contract out of the courts. Section 15 of the British Columbia (former) Arbitration Act, RSBC 1996 c. 55 required a stay of proceedings where a party to an arbitration agreement has commenced a court proceeding in respect of a matter to be submitted to arbitration, unless the arbitration agreement is “void, inoperative, or incapable of being performed”. The Supreme Court of Canada dismissed the stay application of the defendant sued by the receiver/trustee, but split 5-4 on the reasons. The majority found that the arbitration clauses at issue were “inoperative” because enforcing them would compromise the orderly and efficient resolution of the receivership. This authority arises from the statutory jurisdiction conferred on provincial superior courts under ss. 243(1) and 183(1) of the BIA. It found that this interpretation of the stay provision ensures that provincial arbitration legislation and federal bankruptcy legislation are not in conflict. The minority found that the specific language of the “template” Receivership Order authorized the Receiver/Trustee to disclaim the arbitration agreements, rendering them inoperative.
Continue reading “Supreme Court – Peace River v Petrowest Part 2: no conflict between arbitration, bankruptcy law – #687”