The appellant, SimEx Inc., acquired rights to certain films from IMAX Corporation under a Transfer Agreement.
A dispute arose when a third party, Robots of Mars, Inc., commenced arbitration in California claiming unpaid royalties under a prior Production Agreement with IMAX.
IMAX cross-claimed against SimEx, arguing SimEx assumed all liabilities under the Production Agreement.
SimEx applied for a declaration in Ontario that it was not bound by the Production Agreement's arbitration and royalty clauses.
The application judge dismissed the application, finding the assignment conveyed both benefits and burdens.
The Court of Appeal allowed the appeal, holding that the unambiguous terms of the Transfer Agreement only transferred ownership rights to the films, not the contractual obligations of the Production Agreement.
