ADR/Mediation Services - SCC

The appellants sought a stay of proceedings in favour of arbitration under s. 15 of the Arbitration Act, R.S.B.C. 1996, c. 55, after the court-appointed receiver commenced a civil claim to collect amounts allegedly owed under contracts containing mandatory arbitration clauses.

The Supreme Court of Canada dismissed the appeal, holding that a court-appointed receiver may be a party to a debtor's pre-receivership arbitration agreement, but that an arbitration agreement may be found inoperative under s. 15(2) where enforcing it would compromise the orderly and efficient resolution of a court-ordered receivership under the Bankruptcy and Insolvency Act.

The majority applied a two-part framework: the technical prerequisites for a mandatory stay were met, but the arbitration agreements were inoperative because the multiple overlapping arbitral proceedings contemplated would compromise the objectives of the BIA.

The concurring judges agreed on the result but reasoned that the Receivership Order itself authorized the receiver to sue in court and thereby disclaim the arbitration agreements.

The appellants sought to enforce a mandatory arbitration clause in their standard form services agreement, requiring the respondent to resolve any dispute through mediation and then arbitration in the Netherlands under ICC Rules at an up-front cost of approximately US$14,500.

The majority held that the arbitration clause was unconscionable, as there was a clear inequality of bargaining power between a large multinational corporation and a low-income delivery driver, and the resulting arbitration agreement was improvident in that the prohibitive fees effectively denied the respondent any meaningful access to dispute resolution.

The Court also clarified the framework for determining when a court, rather than an arbitrator, should resolve challenges to arbitral jurisdiction, holding that a court may depart from the general rule of arbitral referral where there is a real prospect that the challenge would never be resolved if referred to arbitration.

A concurring judgment by Brown J. agreed with dismissal but preferred to ground the result in public policy rather than unconscionability, finding that the arbitration clause imposed undue hardship by barring access to a legally determined dispute resolution.

Côté J. dissented, reasoning that the arbitration clause was valid, that the Court of Appeal erred in applying the Arbitration Act rather than the International Commercial Arbitration Act, and that the appropriate remedy, if any, was a conditional stay requiring Uber to advance the initiation fees.

A class action was brought against a telecommunications provider on behalf of approximately two million Ontario residents who alleged they were overcharged through an undisclosed call-rounding practice.

The class consisted of both consumers (protected from arbitration by the Consumer Protection Act, 2002) and non-consumer business customers bound by a mandatory arbitration clause in standard form contracts.

The majority held that s. 7(5) of the Arbitration Act, 1991 does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement, and that the first precondition under s. 7(5)(a) was not met because the sole matter in dispute — alleged overbilling — was dealt with in the arbitration agreements.

The business customer claims were therefore stayed, as only the consumers benefited from the Consumer Protection Act's override of the arbitration clause.

Four judges dissented, holding that s. 7(5) confers a discretion to allow the entire proceeding including arbitrable claims to continue in court where it would be unreasonable to separate them.

The appellant challenged a provincial appellate ruling that reversed leave to appeal an arbitral award under s. 31 of the Arbitration Act.

The dispute concerned whether an option to renew was validly exercised by letter under a commercial agreement.

The appellate court held no pure question of law arose from the arbitrator’s interpretation, so the statutory leave threshold was not met.

The Court dismissed the appeal substantially for the reasons of the Court of Appeal of British Columbia.