H. Dorsey

The applicant, operating a restolounge, sought an interim injunction to restrain its landlord from leasing space in the same building to a proposed Mediterranean restaurant, relying on an exclusionary clause in its lease.

The applicant argued the new restaurant would operate a similar business and serve alcohol, causing a loss of business.

Applying the RJR-MacDonald test, the court found there was a serious issue to be tried but dismissed the application because the applicant failed to establish irreparable harm that could not be compensated by damages.

The respondents to a court application brought a motion to stay the proceeding in favour of arbitration under the International Commercial Arbitration Act.

The underlying dispute arose from a sales agency agreement containing an arbitration clause and an earlier arbitration award requiring payment of distribution revenues.

The applicants sought declaratory relief, breach of fiduciary duty findings, and oppression remedies under the Ontario Business Corporations Act against related corporate entities and an individual.

The court held that the moving parties lacked standing to request a stay because they were not parties to the arbitration agreement and had attorned to the court’s jurisdiction by filing substantive materials addressing the merits before seeking a stay.

The requirements under Article 8(1) of the Model Law were therefore not satisfied.

The motion to stay was dismissed and the application was directed to proceed to hearing.