Court of Appeal for Ontario
Citation: 2015 ONCA 89 Date: 2015-02-09 Docket: C58685 and C58686
Before: MacFarland, Hourigan and Benotto JJ.A.
Between
Ciano Trading & Services C.T. & S.R.L.
Applicant (Appellant)
and
Skylink Aviation Inc.
Respondent (Respondent in Appeal)
Application Under Rule 14.05(2) and (3)(d), (g) and (h) of the Rules of Civil Procedure
And Between
Ciano Trading & Services C.T. & S.R.L.
Plaintiff (Appellant)
and
Skylink Aviation Inc., David Miller, Dewy (a.k.a. Kris) Bebbington, Eitan Dehtiar, Robert Waring, Dayle Waring, Tracy Munday, Harry Green, Andrew Hamlin, Philip Hamson, Rael Nurick and Jan Ottens
Defendants (Respondents in Appeal)
Counsel: Melvyn L. Solmon and Raffaele Sparano, for the appellant Ciano Trading & Services C.T. & S.R.L. Francy Kussner and Brad Halfin, for the respondent
Heard and released orally: January 26, 2015
On appeal from the order of Justice David M. Brown of the Superior Court of Justice, dated March 17, 2014.
Endorsement
[1] This is an appeal of the order of the motion judge granting a stay of proceedings pending arbitration.
[2] The parties entered into a Services Agreement that contained an arbitration clause and a survival clause, which provided a list of provisions that would survive termination of the agreement. The survival clause did not include a reference to the arbitration clause.
[3] The respondent terminated the Services Agreement. The appellant commenced an action against the respondent for numerous breaches of the Service Agreement as well as several torts. In addition, the appellant brought an application for declaration that the arbitration clause did not apply. The respondent brought a motion to stay the proceedings pending arbitration.
[4] The motion judge granted the respondent’s motion and dismissed the appellant’s application. He found that it was unclear whether the arbitration clause survived the termination of the Services Agreement and, pursuant to the competence-competence principle, referred the matter to an arbitrator to determine whether the arbitrator had jurisdiction.
[5] The appellant submits that the motion judge erred in his interpretation of the Services Agreement and that he should have found that the arbitration clause did not survive the termination of the agreement. We disagree.
[6] Under the International Commercial Arbritrator Act, R.S.O. 1990, c.I.9 and the UNCITRAL Model Law on International Commercial Arbitration, the motion judge was obliged to defer the issue of applicability of the arbitration clause to the arbitrator unless the agreement is null and void, inoperative or incapable of being performed.
[7] The court has the discretion to determine a challenge to an arbitrator’s jurisdiction on a pure question of law or a question of mixed fact and law that requires for its disposition only superficial consideration of the documentary evidence. However, the case law recognizes that where it is unclear if the arbitrator has jurisdiction, it is preferable to leave the issue to the arbitrator pursuant to the competence-competence principle.
[8] In the present case, the motion judge held that the positions advanced by both parties as to whether the arbitration clause survived termination were arguable. We see no error in his analysis and his decision, in light of that finding, to refer the issue of jurisdiction to the arbitrator.
[9] In these circumstances, the motion judge was under no obligation to make a determinative finding regarding the operability of the arbitration clause.
[10] We also see no error in the motion judge’s articulation of the exceptions to the competence-competence principle.
[11] Finally, we are not persuaded that the stay ordered was contrary to the principles articulated in the Supreme Court of Canada’s decision in Hyrniak v. Maudlin, 2014 SCC 7.
[12] The appeal is dismissed, the matter is referred to arbitration.
[13] The respondent is entitled to its costs, which we fix at $20,000, inclusive of disbursements and HST.
“J. MacFarland J.A.”
“C.W. Hourigan J.A.”
“M.L. Benotto J.A.”