Stay/Declinatory Exception Archives - Page 5 of 10

November 21, 2022November 22, 2022

Ontario – Defendant to stayed action may commence arbitration – #684

In Star Woodworking Ltd. v. Improve Inc., 2022 ONSC 5827, the defendant condominium corporation sought an order that the Court appoint an arbitrator to hear and resolve the plaintiffs’ claims against it. The plaintiffs had originally commenced actions in the Ontario Superior Court of Justice, and a number of claims were stayed as they were required to be brought in arbitration pursuant to the Condominium Act, 1998, SO 1998, c 19, and the Arbitration Act, 1991, SO 1991, c 17. Justice Myers rejected the plaintiffs’ argument that they could not be forced to be claimants in an arbitration if they did not wish to do so. Justice Myers held that the arbitration was properly commenced pursuant to section 23 of the Arbitration Act, 1991.

November 18, 2022November 23, 2022

Federal – Amazon purchasers’ class-action competition claims referred to arbitration – #683

In Difederico v. Amazon.com, Inc., 2022 FC 1256, Justice Furlanetto of the Federal Court granted Defendants’ motion to refer to arbitration claims asserted under section 45 of the Competition Act, RSC 1985, c C-34 (the “Competition Act”) by a proposed class representative plaintiff. Of interest to arbitration observers, the judgment considered the circumstances which qualify as “commercial legal relationships” within the meaning of the United Nations Foreign Arbitral Awards Convention Act, RSC 1985, c 16 (2nd sup) (“UNFAACA”), the statute which implements the New York Convention into the federal law of Canada. The New York Convention, Article II(3), requires a court of a contracting State, at the request of a party, to refer claims covered by an arbitration agreement to arbitration, unless the arbitration agreement is null and void, inoperative, or incapable of being performed. This case also features detailed analysis of the access-to-justice exception to the competence-competence principle recognized in Uber Technologies, Inc. v. Heller, 2020 SCC 16 (“Uber”).

November 17, 2022November 17, 2022

Supreme Court – Peace River v Petrowest Part 1: Separability Clarified? – #682

Most of the commentary about the Supreme Court of Canada’s decision of Peace River Hydro Partners v Petrowest, 2022 SCC 41, is about the interplay between arbitration law and bankruptcy/insolvency law – and my next Case Note will address that issue. However, perhaps a more important issue for arbitration law was the Court’s consideration of the doctrine of separability (although it was not relevant to the outcome). The scope of its application in Canada was uncertain following the 2020 decisions of the British Columbia Court of Appeal under appeal, Petrowest Corporation v Peace River Hydro Partners, 2020 BCCA 339, and the Supreme Court of Canada in Uber Technologies Inc. v Heller, 2020 SCC 16 (“Uber”).

November 7, 2022March 8, 2023

Québec – Fragmentation of shareholders dispute stayed pending appeal on jurisdiction – #678

In Istanboulian v Kalajian, 2022 QCCA 1259, Justice Cournoyer granted leave to appeal from a judgment of the Québec Superior Court, which had referred part of a claim to arbitration. He found that the judgment under appeal caused irremediable injury to the Applicants by possibly preventing them from being heard in the appropriate forum and that it was in the interest of justice to immediately get to the bottom of the jurisdictional issue.

November 3, 2022November 15, 2022

Québec – No clean hands, no security despite stay of homologation application – #677

In Specter Aviation v United Mining Supply, 2022 QCCS 3643, Justice Castonguay granted a stay of an application by the successful party in a foreign arbitration to homologate the award, but denied the applicants’ alternative request for security, pending the unsuccessful party’s annulment application to the Paris Court of Appeal. Despite recognizing that a court should be reluctant to interfere with a successful party’s enforcement efforts, Justice Castonguay found that the annulment application was, “neither futile nor frivolous” and that the successful party did not have clean hands and had resorted to a self-help remedy. He also ordered costs against the successful party.

October 13, 2022October 17, 2022

Québec – Solidary liability allegation no bar to referral to arbitration for one defendant – #671

In Nantel v Gonzalez (not reported), Justice Buchholz stayed an action as against one defendant of a group and referred its dispute with the Plaintiffs to arbitration, even though the Plaintiffs alleged solidary (joint) liability as against all Defendants.

October 11, 2022October 7, 2022

Manitoba – Arbitration Agreement Invalid due to Unconscionability and no Consideration – #669

In Pokornik v. SkipTheDishes Restaurant Services Inc., 2022 MBKB 178, Justice Chartier considered the principles arising from Uber Technologies Inc. v. Heller, 2020 SCC 16 (CanLII) (“Uber”) in a contract of adhesion between a restaurant delivery corporation, SkipTheDishes, and one of its individual couriers. Justice Chartier found that there was no arbitration agreement; SkipTheDishes asserted that the courier was bound to a new agreement with an arbitration agreement that only became effective after she sued. Had he found otherwise, Justice Chartier would have found the agreement to be invalid due to unconscionability and a lack of consideration. These findings were despite efforts by SkipTheDishes to address some of the concerns that animated the Supreme Court of Canada’s decision in Uber.

September 28, 2022April 20, 2023

Alberta – Master’s stay decision appealable despite no appeal under Arbitration Act – #665

In Agrium v Orbis Engineering Field Services, 2022 ABCA 266, the majority of a three-member panel of the Court of Appeal of Alberta (the “Court of Appeal”) dismissed an appeal to overturn a decision staying the action in favour of arbitration. The Appellant, Agrium, Inc. (“Agrium”), commenced an action against the Respondents, Orbis Engineering Field Services Ltd., Elliott Turbomachinery Canada Inc., and Elliott Company (together, the “Respondents”), in relation to a dispute arising out of the parties’ services contract that included a mandatory arbitration agreement. The Respondents defended the claim, including on the ground that the arbitration agreement barred the action pursuant to s 7 of Alberta’s Arbitration Act (the “Act”). The Respondents’ initial application to stay the action was dismissed by Master Prowse on the grounds of waiver and attornment. The Respondents then appealed to a Justice of Alberta’s Court of King’s Bench. Before Justice Dilts, Agrium relied upon s 7(6) of the Act, which states that “[t]here is no appeal from the court’s decision under this section”. Agrium argued that thisprohibited the appeal. Justice Dilts dismissed this argument and allowed the Respondents’ appeal on the grounds that: (1) an appeal was permitted notwithstanding s. 7(6); and (2) the Respondents’ conduct did not amount to a waiver of their right to arbitrate. The majority of the Court of Appeal upheld Justice Dilts’ decision based on a similar analysis. Of note, Justice Wakeling wrote a 44-page dissenting opinion, which includes 140 paragraphs and 152 footnotes, as compared with the 34- paragraph majority decision (!).

September 27, 2022September 26, 2022

Québec – Interests of justice require closely linked disputes to be arbitrated – #664

In Tessier v 2428-8516 Québec inc., 2002 QCCS 3159, Justice Dufresne granted an application for a declinatory exception in respect of an originating application, and referred two disputes involving ownership of two closely connected companies to arbitration where the shareholders of only one of the two companies involved in the disputes were subject to an arbitration agreement. Justice Dufresne found that the disputes were linked. He relied upon the interests of justice and the principle of proportionality and found that [informal translation]“rather than depriving the shareholders of the first [company] of the effects of the arbitration clause, the shareholders of the second [company] should be ordered to be subject to it.”

September 14, 2022September 9, 2022

Ontario – Court of Appeal upholds “single proceeding” insolvency model over recourse to arbitration – #660

In Mundo Media Ltd. (Re), 2022 ONCA 607, Court of Appeal for Ontario Justice Julie Thorburn dismissed a motion for leave to appeal a decision denying a motion to stay a receiver’s court proceeding. The Appellant/Moving Party sought the stay on the basis of an international arbitration agreement. Justice Thorburn found no reversible error in the motion judge’s choice to apply the “single proceeding model”, applicable in insolvency proceedings, with the effect that the Appellant/Moving Party, one of the insolvent company’s debtors, could not require the receiver to arbitrate its claim rather than litigate it. Together with the Superior Court’s decision below, this decision provides important guidance on the interplay between arbitration agreements and claims advanced in the bankruptcy and insolvency context.