The defendants moved under Rule 21 of the Rules of Civil Procedure, s. 106 of the Courts of Justice Act, and s. 7(1) of the Arbitration Act, 1991 to stay an Ontario action arising from a commercial distribution agreement.
The agreement contained a clause selecting German law and requiring binding arbitration through the Frankfurt Chamber of Commerce for “any disputes.” The court held that such forum selection and arbitration clauses are presumptively enforceable and that the plaintiff bears the burden of demonstrating “strong cause” to avoid enforcement.
The plaintiff’s allegations of egregious contractual and tortious conduct did not constitute strong cause, as merits‑based arguments cannot defeat a forum selection clause.
The court further held that the clause applied to related tort claims and to individual defendants whose alleged conduct was intertwined with the contractual dispute.
