As promised, I will provide a snapshot of some of the more interesting components of arbitration practices and processes that I am learning in my TCAS Arbitration Course. As part of the materials, I am reviewing case law addressing some issues that can come before our courts for resolution, yet arising out of private arbitration, arbitration clauses within contracts to arbitrate, and arbitration agreements. Throughout the next several months of my course, I will provide comments on some of the cases which give guidance to arbitrators, to parties participating in arbitrations, and those drafting and negotiating arbitration clauses, with some tools to consider in negotiating their terms, processes and procedures. Some of the salient points gleaned from 3 notable cases are provided below.

Uber Technologies Inc. v. Heller, 2020 SCC 16,concerned the validity of the arbitration clause and arbitration agreement.

Brief Facts: To become a driver for the defendant, the plaintiff had to accept the terms of the defendant’s standard form services agreement which required the plaintiff to resolve any dispute with the defendant through mediation and arbitration in the Netherlands — The plaintiff started class proceedings against the defendant for violation of  the Employment Standards Act, 2000 — The defendant brought a successful motion to stay proceedings in favor of arbitration — The Court of Appeal reversed the order, determining that the arbitration agreement was unconscionable — The defendant appealed and the appeal was dismissed.

Court Outcome: In this instance, the court found that the employment disputes were covered by the Arbitration Act, 1991, and not  the International Commercial Arbitration Act, 2017 — The Court found it appropriate to resolve the arguments raised by the plaintiff since the plaintiff had made a genuine challenge to the validity of the arbitration agreement and there was a real prospect that if stay was granted, then the plaintiff’s genuine challenge may never be resolved — The fees imposed a brick wall between the plaintiff and resolution of any claims levelled against the defendant — The Arbitration clause was found to be unconscionable and therefore invalid.

Maisonneuve v. Clark, 2022 ONCA 113, concerned limitation periods for arbitration.

Brief Facts: This case concerns a business dispute between two cousins who were shareholders in various companies, including Eastern Ontario Real Estate Investors Inc. (“EOREI”). Their relationship deteriorated, and in 2016, they referred their disputes to arbitration. A settlement was reached in September 2016, except for one issue regarding the payment of EOREI-related expenses. The settlement agreement stipulated that this unresolved issue would be referred to arbitration if negotiations failed.

The Arguments:

• • Appellants: Argued that the arbitration was time-barred under the two-year limitation period in the Limitations Act, 2002, which they claimed began in September 2016 when the settlement agreement was signed. They also contended that the application judge erred in distinguishing the case from precedent and in interpreting the arbitration clause.
  • Respondents: Maintained that the limitation period began on January 31, 2018, when the appellants’ lawyer indicated that no further negotiations would occur. They argued that arbitration was not “appropriate” under the Limitations Act, 2002, until negotiations had failed.

Court Outcome: On Interpretation of the Arbitration Clause: The application judge correctly distinguished the case from Markel Insurance Company of Canada v. ING Insurance Company of Canada since the arbitration clause in this case was part of a negotiated agreement rather than a statutory provision. The clause’s wording, including the use of “then,” introduced a temporal and conditional element, making informal resolution a prerequisite to arbitration. The application judge’s interpretation was entitled to deference.

• • On the Commencement of the Limitation Period: The application judge found that the limitation period began on January 31, 2018, when the appellants’ lawyer indicated that no further negotiations would occur. This finding was based on the specific wording of the arbitration clause and the context of the parties’ negotiations. The Court of Appeal found no palpable and overriding error in this conclusion.
  • On Precedent and Uncertainty: The appellants’ argument that the decision created uncertainty regarding limitation periods for arbitration clauses was rejected. The Court emphasized that the parties are free to draft arbitration clauses with clear preconditions or timelines. The decision was based on the specific facts and wording of the clause in this case.

Magna International Inc. v. Granite Real Estate Inc., 2022 ONSC 2200, concerned competence and autonomy of the parties.

Court Outcome: The court reaffirmed the central arbitration principles of competence-competence and party autonomy under the Arbitration Act, 1991, SO 1991, c 17. Myers J., held that, consistent with Trade Finance Solutions Inc. v. Equinox Global Ltd., 2018 ONCA 12, courts must defer to the arbitrator’s jurisdictional determination unless the invalidity or inapplicability of the arbitration agreement is “clear”. Where an arbitration clause is arguably valid, the court’s proper course is to appoint an arbitrator and allow them to determine their own jurisdiction, thereby giving full effect to the competence-competence principle and the parties’ choice to resolve disputes through arbitration rather than litigation.

Interpretation of Permissive Arbitration Clause:

• • The Court also addressed arguments concerning the validity and enforceability of the arbitration clause itself. The respondent had argued that the clause was invalid because it was permissive rather than mandatory, and because it failed to specify a seat or applicable procedural rules. Myers J., rejected these objections, observing that modern Canadian law favours an interpretation that gives efficacy to the parties’ evident intention to arbitrate rather than one that frustrates it. The Court found that the phrase, “may be referred to arbitration” could reasonably be construed as making arbitration mandatory once either party issued a notice to arbitrate, thereby aligning with the commercial objective of ensuring an efficient and final determination.

Absence of Procedural Details:

• • Finally, the Court clarified that the absence of express procedural details (designated seat or reference to specific arbitration rules) does not render an arbitration clause invalid. Such procedural determinations fall within the arbitrator’s jurisdiction and can be resolved in consultation with the parties. Myers J. underscored that arbitration is founded on contractual autonomy, and courts should be slow to interfere where the parties have agreed to a process for resolving their disputes. In appointing the arbitrator, the Court reinforced the pro-arbitration stance of Ontario law—emphasizing deference to arbitral competence, pragmatic construction of arbitration agreements, and respect for the efficiency and finality that arbitration is intended to achieve.