Superior Court reaffirms the broad interpretation to be given to arbitration clauses

by Karim Renno
Osler, Hoskin & Harcourt LLP

A judgment rendered last week by the Honorable Justice Daniel H. Tingley reinforces the principle that Courts will give arbitration clauses a broad scope to ensure the fulfillment of the intent of the parties.

 

In Canadian Ground Water Association v. Canadian Geoexchange Coalition (2010 QCCS 2597), Justice Tingley dismissed the application for review of a decision of an arbitrator who had ruled that he was competent to hear an application. The Petitioner, basing itself on the wording of the arbitration clause, was arguing that arbitration proceedings had to be filed within 21 days of the failure to resolve the dispute amicably in mediation. The Petitioner argued that the Respondent had not respected those delays in filing for arbitration.

Justice Tingley dismissed the application for review on the basis of the fact that there were reasonable interpretations of the arbitration clause that allowed for the filing of the claim outside the 21-day time limit:

[12] The Association asserts that the Coalition failed to give notice of its intention to refer its dispute to arbitration within the appropriate delays. This ground is discussed by the Arbitrator at paragraphs 72 to 78 of his Award. While the Arbitrator’s interpretation of Article 10 appears perfectly rational and consistent with the intentions of the parties that resort to the Courts to resolve disputes should only occur after mediation and arbitration efforts have been “exhausted”, there is at least one other interpretation that is equally consistent with the parties’ intentions.

[13] If Article 10.4 of the Agreement is read without reference to failed efforts to resolve the dispute by mediation, as the punctuation suggests, then there is no delay within which a party must notify the other of a reference to arbitration where there has been no mediation. Only in the event that efforts to resolve the dispute by mediation have failed (terminated) is there any requirement to apply for arbitration within 21 days of such failure (termination).

[14] Thus, where there has been no mediation, arbitration may be resorted to any time before prescription of the disputed claim. This interpretation is consistent with the intention of the parties to apply to the Courts only as a last resort and does no violence to the wording of Article 10.4 of the Agreement.

 

In doing so, Justice Tingley reinforced the inclination of the Courts to interpret arbitration clauses broadly in order to respect the intent of the parties to submit disputes to that forum.

Neutral citation : [2010] ABD 18