The defendants brought a motion to stay the plaintiffs’ civil action on the basis of an arbitration clause contained in a shareholders agreement executed as part of a share purchase transaction.
The plaintiffs alleged misrepresentations inducing the share purchase and sought declarations regarding share value, rescission of the transaction, and damages including wrongful dismissal.
The court held that the dispute was not clearly outside the scope of the arbitration clause, which broadly applied to disputes relating to interpretation or implementation of the shareholders agreement.
Applying s. 7(1) of the Arbitration Act, 1991 and appellate guidance on deference to arbitration agreements, the court stayed the claims that arguably required interpretation of the shareholders agreement.
The wrongful dismissal claim arising from a separate employment agreement was not stayed.
