Stay/Declinatory Exception Archives - Page 3 of 9

June 19, 2023June 20, 2023

Ontario – Appeal allowed where arbitration agreement “invalid”; Arbitration Act not engaged – #746

In Goberdhan v Knights of Columbus, 2023 ONCA 327 , the Ontario Court of Appeal dismissed an appeal of an order dismissing the Defendant’s/Appellant’s motion for a stay of proceedings in favour of arbitration. The motion judge found that the contracts containing the arbitration agreements were invalid for lack of consideration. He therefore refused the stay pursuant to s. 7(2)2 of the Ontario Arbitration Act, 1991 SO 1991, c 17. The Plaintiff/Respondent argued that no appeal was permitted under s. 7(6), which prohibits an appeal of a stay decision. The Court of Appeal disagreed and found that because the contracts and the arbitration clauses were invalid, the Arbitration Act,1991, was not engaged and there was no prohibition on appeal. The appeal was dismissed on its merits.

June 8, 2023August 8, 2023

Alberta – “Participating in” not same as “taking a step in” an arbitration – #745

In Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2023 ABKB 215, Justice Wooley dismissed an application by Dow Chemical Canada ULC (“Dow”) for an order declaring the invalidity of the arbitration pursuant to Section 47 of the Arbitration Act to enjoin an arbitration between the parties. That provision requires that the party seeking the order has “not participated in the arbitration.” The Court found that Dow did participate in the arbitration and the case provides a useful framework for what it means to “participate” in an arbitration.

June 7, 2023June 5, 2023

B.C. – High bar to arbitrate amended claims after attornment – #744

In Hawthorn v Hawrish, 2023 BCCA 182, the BC Court of Appeal addressed the often-difficult question of “who decides” key issues where arbitration agreements and court proceedings collide. The appeal concerned an amended notice of civil claim, which the defendants – who had already attorned to the court in respect of the original notice of civil claim – applied to stay in favor of arbitration. The core question was whether the amendments added new claims. The Court of Appeal affirmed the lower court’s refusal to refer the question first to arbitration, and the conclusion that the amendments were not new.

June 6, 2023June 20, 2023

Ontario – Competing “jurisdiction” clauses result in application for stay being dismissed – #743

In RH20 North America Inc. et al v. Bergmann et al, 2023 ONSC 2378, the moving defendants brought both a motion under Rule 21 striking out certain of the plaintiff’s claims as disclosing no reasonable cause of action, and an application for a stay for want of jurisdiction on the basis of arbitration clauses in their underlying contracts with the plaintiffs. They met with divided success. While granting relief on the Rule 21 motion, Justice Valente dismissed the stay application on a variety of grounds, including that there were competing arbitration and jurisdiction clauses and that there was an attornment to the court’s jurisdiction as a result of bringing the Rule 21 motion.

May 24, 2023May 24, 2023

Ontario – Peace River “arguable case” standard applies to ICAA stay motion – #739

Husky Food Importers & Distributors Ltd v JH Whittaker & Sons Limited and Star Marketing Ltd, 2023 ONCA 260 addresses the standard of proof that a party seeking a stay of proceedings under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA”) must meet in order to establish the existence of an arbitration agreement that grounds the stay of proceedings. The Court of Appeal found that Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 supersedes the stay analysis articulated in Haas v. Gunasekaram, 2016 ONCA 744.

April 25, 2023April 21, 2023

B.C. – No power to stay arbitration under Model Law – #731

In Johnston v Octaform Inc., 2023 BCSC 311, Justice Giaschi refused to stay an arbitration, finding he had no authority to do so under the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 [ICAA]. In so doing, he distinguished case law in which courts exercised inherent jurisdiction to stay domestic arbitration proceedings in various circumstances.

April 10, 2023April 4, 2023

BC – Court determines arbitrator jurisdiction, exercising exception to competence-competence – #726

In Isagenix International LLC v. Harris, 2023 BCCA 96, Justice Griffin, for the British Columbia Court of Appeal, upheld an order dismissing the Appellant’s application made pursuant to section 8 of the International Commercial Arbitration Act, RSBC 1996, c 233 (the “ICCA”) for a stay of proceedings in favour of arbitration. In particular, she rejected the Appellant’s argument that the chambers justice had misapplied the principle of competence-competence by deciding the question about whether the underlying negligence claim fell within the scope of the arbitration clause, rather than referring the jurisdictional matter to the arbitrator. Justice Griffin found that the chambers justice did not err in law because he came within one of the well-established exceptions to the competence-competence rule.

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.

March 1, 2023February 23, 2023

Alberta – Claimants denied stay of own action in favour of arbitration – #716

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.

February 27, 2023February 23, 2023

B.C. – Recent shift towards competence-competence in arbitration clause interpretation? – #714

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.